Best Buy watched its greatest competitor Circuit City fall to online retailer Amazon five years ago. Now weak sales and increased shopping online may send the electronics retailer to its own grave.
Best Buy's net income dropped 41 percent in the past year from $248 million to $146 million, the company announced Tuesday. Total revenue fell 3.2 percent from $9.2 billion to $8.9 billion, and in-store sales dropped 2.7 percent.
"We continued to see a shift in consumer behavior: consumers are increasingly researching and buying online," Best Buy CEO Hubert Joly said in a statement.
Customer research is part of a phenomenon called "showrooming," according to CNN Money. Consumers go to Best Buy and other retailers to physically examine TVs, smartphones or tablets and then purchase them for a cheaper price at Amazon or other online outlets.
Best Buy did post a boost in earnings of 44 cents per share, up from 32 cents a year ago.
The number of people physically coming to Best Buy's brick-and-mortar stores may have fallen, but those who did visit were likely to make a purchase in-store, according to Joly. The CEO cited the company's "Renew Blue strategy" for the minor success, which promotes its online business and a better in-store experience for the customer.
Best Buy's ability to ship products directly from its store to online shoppers accounted for a 22-percent increase in U.S. online sales. Increased sales of appliances, due to the housing recovery, and big screen televisions may have also attributed to the company's positive quarter earnings, according to TheStreet.
In May, Joly pointed to a lack of new, must-have electronics as a reason for the business' "ongoing softness" according to CNN Money. The next anticipated gadget is the iPhone 6, rumored to be available on Sept. 9.
