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Fry’s Electronics: How this tech retailer has survived the fall of brick-and-mortar

JP Mangalindan
Chief Tech Correspondent
The Fry’s Electronics location in San Jose, California, is loosely modeled after a Mayan temple. Source: Paul Sullivan/Flickr

Before Amazon.com (AMZN), there was Fry’s Electronics.

The 32-year-old retailer, which peddles electronics at 34 stores in the US, remains a quaint holdout in an era when e-commerce rules and orders can arrive in hours by drone.

Fry’s locations, mostly in California, lack the gorgeous austerity of an Apple (AAPL) store. Its website is a straightforward grid of product ads filled with what appears to be old-school Microsoft Word clip art.

Yet Fry’s has succeeded where now-defunct competitors like Circuit City and CompUSA have failed. Just this week, electronics retailer hhgregg filed for bankruptcy amid declining sales.

But, unlike hhgregg, Fry’s serves up a deep inventory of tech products that goes beyond mass-market items. Sure, Fry’s sells HDTVs and digital cameras, but it also caters to the hardcore tech hobbyist who wants to pick and choose the parts to build an entire personal computer down to that seventh-generation Intel Core i5-7500 processor.

Fry’s has what Best Buy doesn’t

“Best Buy only sells a small selection of expensive goods that are mostly low-grade,” says TJ Pallas, a 30-year-old hardware developer and tech producer who splits his time between Chicago and Dallas and often travels for work. “Fry’s is real electronics. I can build new things from parts from Fry’s. If I’m working on site, I usually need something way sooner than a truck can get it.”

The Fry’s Electronics location in San Marcos, California. (Flickr / Joe Wolf)

Sure, Pallas could shop on Amazon. But for the specialized hardware he’s looking for, he’s skeptical about shopping online.

“There’s also something to be said for holding and looking at a thing before it gets integrated into a system. If we order the wrong thing off Amazon, we could be hosed. ‘Go to Fry’s and get exactly this and get back here,’ is pretty bulletproof,” he said.

Yahoo Finance spoke to several shoppers in the San Francisco Bay Area who were drawn to the chain’s quirky store designs, each of which sports a different theme. The San Jose location, for example, is loosely modeled after a Mayan temple, replete with corridors and arches inside. The Palo Alto store channels the Wild Wild West with spoked wagon wheels, faux railroad tracks and a restaurant inside called the Iron Tail Café.  

“It’s more playful,” explained Patrick Chung, a Palo Alto–based venture capitalist who loves the “cowboy” vibe of his local Fry’s. “It feels like a mom-and-pop, not a corporate conglomerate.”

Lauren Hockenson, a social media manager at a San Francisco LGBTQ bar, shops at Fry’s not only for that playful vibe, but also for its deep-pocket discounts. “It’s an experience, and they actually do a really good job honoring discounts,” she said. “That’s how I saved so much money buying headphones: Amazon had a daily deal, and I got my headphones for $60 off the price at Fry’s. Pretty awesome.”

Hockenson and her boyfriend Jordan, a writer for the tech site VentureBeat, also purchased all the parts they needed last year to build a custom personal computer swift enough to work with the Oculus Rift virtual reality headset.

A survivor in the age of Amazon

Surprisingly, Fry’s Electronics continues to perform well in the age of Amazon. The brick-and-mortar chain, which did not respond to Yahoo Finance’s request for comment, reported $2.15 billion for its fiscal 2015 revenues.

The Fry’s Electronics in Burbank, California. (Flickr/Klaus Nahr)

“They’ve been able to weather the ‘Amazon storm’ better than most, but if you look closely, you’ll certainly see a certain amount of store erosion,” said Rob Enderle, who runs his own tech consulting firm in Bend, Oregon.

Indeed, explore some areas of a Fry’s store in Silicon Valley, and you’ll notice some items collecting dust on shelves and other products picked over in a heap you’d likely never see at a more tightly run Best Buy (BBY).

How Fry’s Electronics fares in the medium to long term, as Amazon and other e-commerce sites siphon sales away from longstanding retail stores, is difficult to say. It’s a Silicon Valley relic, proudly stuck in the past, buoyed by loyal shoppers like Pallas, Chung and Hockenson, who still crave the instant, tangible satisfaction of handling and buying tech on the spot.

But maybe for Fry’s Electronics, that’s enough.  

JP Mangalindan is a senior correspondent for Yahoo Finance covering the intersection of tech and business. Follow him on Twitter or Facebook.  

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