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The electronics retail industry is in flux (AMZN, BBY)
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Amazon is dominating in the consumer electronics segment to the point that its competitors are adjusting their strategies.
This is a necessary step for them to succeed in a market valued at approximately $25 billion per year in online and offline sales.
Amazon is the fastest-growing major retailer of consumer electronics in the US, as sales in this segment on the e-commerce giant grew 28% in 2015. As points of comparison, Apple's sales grew 4.3% and Best Buy's sales grew 3.8% last year.
Furthermore, Amazon will overtake Best Buy sooner rather than later as the largest U.S. seller of consumer electronics. The online retailer represented 17% of all U.S. electronics sales in 2015, up from 12% in 2013. Best Buy's share was 22.7% last year, down a bit from 22.7% in 2013.
The fast and flexible delivery options Amazon offers have been a major selling point for consumers. In fact, one-third of U.S. consumers said they would pay more to have their electronics delivered quickly or at their convenience, according to a survey by retail solutions provider JDA. This likely stems from the expensive price tags on products such as televisions and computers.
As a result, some competitors are considering partnering with Amazon by using the company's third-party marketplace as a sales channel. Circuit City, which filed for bankruptcy in 2008, is relaunching with a new multichannel approach that includes brick-and-mortar showrooms, an online site, and a listing on Amazon.
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