Bose Corporation, one of the best known manufacturers of audio systems and speakers, noise-cancelling headphones, professional audio products and automobile sound systems, established by Amar Bose in 1964 and based in Framingham, Massachusetts, communicated in a note that it will close all 119 stores it owns in Europe, North America, Australia and Japan. The company motivated the decision with the fact that its products “are increasingly purchased through e-commerce”. The number of layoffs is still unknown, but “Bose will be offering outplacement assistance and severance to affected employees”. According to the company annual report in the 2019 financial year, Bose Corporation received revenue of US$4.0 billion and employed more than 9,000 people.
The other 130 stores will remain open in Greater China and the United Arab Emirates, in addition to those in India, Southeast Asia and South Korea. “Given the dramatic shift to online shopping in specific markets – the note reads – Bose plans to close its remaining 119 retail stores across North America, Europe, Japan and Australia over the next several months.”
Are physical stores as a whole disappering? Not really.
The news of Bose left some a little bit sceptical. Purchase dynamics have obviously changed with the advent of e-commerce, and there is certainly a push for the formation of digital monopolies in practice, but in the distribution of products the long tail continues to exist. Physical stores are needed at least as much as the virtual counterparts. Physical assets are not being dematerialized. Apple wouldn’t exist without its stores. Amazon is opening new physical stores. There is a space where the product must be explained, described and touched. Customers must familiarize with the product before buying. The physical location is essential and lends itself to a shopping experience different from that on smartphones. It’s not just the presence of a human being that makes a difference. Music, for example, is listened to, not only with headphones, but also in suitable environments where sound can have superior performance. Bose knows this better than others. Maybe they didn’t believe it enough or there are other factors taken into account that are not given to know at the moment.
The Note From BOSE
Given the dramatic shift to online shopping in specific markets, Bose plans to close its remaining 119 retail stores across North America, Europe, Japan and Australia over the next several months. In other parts of the world, Bose stores will remain open, including approximately 130 stores located in Greater China and the United Arab Emirates; and additional stores in India, Southeast Asia, and South Korea.
In 1993, Bose opened its first store in the United States to provide personal, private demonstrations for Wave music systems and Lifestyle home theater systems. As smartphones changed the industry, the company’s focus turned to mobile, Bluetooth, and Wi-Fi solutions. Today, Bose noise-cancelling headphones, truly wireless sport earbuds, portable speakers, and smart speakers are increasingly purchased through e-commerce, including Bose.com; and Bose is a larger multi-national company, with a localized mix of channels tailored for a country or region.
“Originally, our retail stores gave people a way to experience, test, and talk to us about multi-component, CD and DVD-based home entertainment systems,” said Colette Burke, vice president of Global Sales, Bose Corporation. “At the time, it was a radical idea, but we focused on what our customers needed, and where they needed it – and we’re doing the same thing now. It’s still difficult, because the decision impacts some of our amazing store teams who make us proud every day. They take care of every person who walks through our doors – whether that’s helping with a problem, giving expert advice, or just letting someone take a break and listen to great music. Over the years, they’ve set the standard for customer service. And everyone at Bose is grateful.”
Bose will be offering outplacement assistance and severance to affected employees. Additional details, including the number of employees affected, will remain private.