Fry’s Electronics contends that it’s still in business, but months of nearly nonexistent inventory levels have convinced customers otherwise. In an effort to address rumors that Fry’s is circling the drain, the company stated that it’s changing its main business model. Rather than buying stock and selling it on shelves, the regional retailer is in the process of shifting to a consignment model that doesn’t require it to pay manufacturers for products until those products sell. While this may help with inventory management and returns, the choppy transition has already made its mark, creating a major dent in the customer experience.

gap intelligence retail collector photo Fry's Electronics empty shelves

Ah, The Good Ol’ Days.

In its heyday, a trip to Fry’s Electronics was like taking a kid to the candy store (but with computing professionals/enthusiasts looking for computers, components, and accessories). Store visitors were immersed in the in-store experience of each location’s theme (Burbank has a retro-space theme from Hollywood, Houston showcases Texas’s oil history, Sunnyvale pays homage to the history of Silicon Valley). They had the opportunity to build custom PCs, and could peruse endless aisles of unique product assortments. The company also led with a generous return policy unmatched by competitors at the time. Fast forward to today, and it’s hard to compete on product selection and price alone, especially without products on shelves.

gap intelligence data Fry's Electronics printer assortment

gap intelligence data Fry's Electronics TV assortment

A Day Late, Tons of Inventory Short.

With Fry’s Electronics operating as a privately held company, it’s hard to take a close peek under the hood to get a detailed look at what’s going on. And while financial statements aren’t readily available, one thing likely holds true – Fry’s Electronics lost its edge in the wake of e-commerce and evolving consumer purchasing habits.

According to the U.S. Department of Commerce, 2019 e-commerce sales increased by 14.9% to $601.7 billion (compared to 2018), representing 11.0% of total sales including those made through retailers. E-commerce sales accounted for 9.9% of total sales in 2018. With the growth of online shopping and a range of ways to target customers, an omnichannel marketing strategy (or lack thereof) can make or break a company.


US retail e-commerce sales as percent of total sales

Viewing the battle as e-commerce vs. brick-and-mortar is no longer accurrate because shoppers have evolved beyond this. Customers want to shop quickly and easily while enjoying a positive experience throughout the shopping process. Seamless shopping is key, and many customers no longer have the patience for companies that do not align systems. Sure, Fry’s offers a great price matching policy and BOPIS (buy online, pick-up in-store), but many customers faced issues of incorrect in-store availability and poor customer service for years.

At a time when customers can purchase virtually anything from anywhere in the world, merchants that choose to operate stores need to focus on the customer experience – a feat that will break Fry’s Electronics if it’s unable to build back trust with customers that now view the retailer as a barren wasteland.

gap intelligence retail collector photo Fry's Electronics in rain

An Uphill Battle.

Fry’s Electronics has a lot of work to do if it wants to turnaround its business and win back customers. The company is now engaging on social media (and finally publicly addressing inventory issues) to convince its customers that stock levels are coming back. On February 19, 2020 the company published a Facebook post stating the following:

“With over 300 vendors transitioned to our new consignment model, we continue to make progress every week increasing our store stock levels – including in our City of Industry, Roseville, Sunnyvale, and San Jose stores pictured here! We appreciate your patience and support as we still have a lot of work to do to complete this transition and get our stores fully stocked.”

Fry's Electronics Facebook Post of Stocked Shelves

But some were quick to fire back. One Facebook user stated “Too Little. Too Late. What’s Fry’s?” and another said “I’ve been extremely disappointed with the lack of product at the Fry’s… It honestly looks like that place is going under. It’s a real shame.” One commenter even accused the photos as being “staged” in a “super desperate PR move” because “local shoppers know what the stores should look like.”

Others remained hopeful. One Facebook user said “Best of luck. I hope it works out.” Another rooted for the retailer and shared, “I love walking into a big electronics store and being able to get exactly what I need, but also being able to browse a wide selection of stuff… All the best – I love your stores! Make the comeback!”

Regardless of customer sentiment, time will tell. Unsatisfied customers have been disappointed by barren shelves and realistically have a plethora of shopping options. The future of Fry’s Electronics sure looks bleak, and the regional retailer will need to move quickly to smooth out its business model transition and offer a range of incentives to get customers back into its stores.

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