BestBuy going out of business.... Gradually and then all at once says Forbes. (1 Viewer)

Heh, man I wish I could share the notes of my 2 hour customer feedback meeting I had with BestBuy last year....
But.... This comes close.

Amazon neither invented nor appropriated its basic strategies from Best Buy or anyone else. It simply does what consumers want. Best Buy does what would be most convenient for the company for consumers to want but don’t, then crosses its fingers and prays. That’s not a strategy–or not a winning strategy, in any case, now that retail consumers aren’t stuck with the store closest to home.

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Terrific take-down of all that is wrong with these Bozos when they could be amazing instead of just the only survivor in retail land...
http://www.forbes.com/sites/larrydownes/2012/01/02/why-best-buy-is-going-out-of-business-gradually/

I remember back in 2000 Toys R Us had a similar problem fulfilling orders around Christmas. I don't think they ever fully recovered.
It looks like Frys is also having trouble. They used to have multiple full-page adds in the paper everyday. Now it's 2 or 3 days a week. And the stores have fewercustomers walking around in comparison to a year or two ago. They also made a BIG thing about matching on-line retailers prices, even mentioned Amazon by name.
But this is bigger than a couple of electronics retailer having problems. It also makes me wonder where so many people are going to be working in a few years. Retail is a huge part of our emplyment. Best Buy, Frys, Sears...who's next? And as on-line retailing grabs more of the market, sales tax revenue will drop even more. No one wants to pay taxes but we all want the services they provide. Is a national sales tax on the horizon?
But getting back to BB, they, like so many companies, are more concerned with meeting CNN forecasts and Fund Managers push for higher sales and profits on almost a daily basis that the customer comes in fourth or fifth. As I recall, in the second quarter of last year Cisco Systems had sales of about 11 Billion dollars and profits of 1.2 Billion but that represented a decline in profits from the previous year and missed forecasters estimates so CEO John Chambers went into self-protect mode and announced a "work force reduction of 6,500 employees". How much profit is enough? Apparently $1,000,000,000 every three months isn't. Me thinks they're occupying the wrong places.
I used to go into Bb a couple times a month but I rarely go anymore. I might wander into Magnolia because I know I'll be left in peace. Buying electronics is more like buying a new car now. You're excited about the purchase but "why do I have to buy it here?" Thanks to the internet, now you don't.

Brilliant article, thanks. I'm passing it along.

Agreed: this article is pretty spot-on. At my local Best Buys, I can always count on being approached by at least one Direct TV representative. Fortunately for me, I live in a place that can't have Direct TV, so I can brush them off pretty quickly and efficiently. Try to find someone who actually knows something about the in-store merchandise, however...
Another annoyance I've encountered on more than one occasion is sale prices posted for merchandise that is either out-of-stock , located nowhere near the sale-price sticker or a sale price is posted in front of a similar item that has a different SKU (it's apparently the customer's job, rather than the display manager's job, to make sure the SKU of the actual merchandise matches the SKU printed on the advertised price posted directly in front of it).
Recently I was in a BB and found the Blu Ray of Scream 4 advertised on the shelf for $12.99. Not a great movie, by any stretch, but for the price, I decided to pick it up and complete my collection. The copies located behind the $12.99 advertised price were the DVD+BluRay Combo packs. This advertised price was posted in front of the DVD+BR combos in at least 3 places throughout the store and there was no other version on the shelf so I, not unreasonably IMHO, assumed it was on sale for $12.99. I picked up a copy and took it to the check-out where it rang up at $29.99. As I had about 10 other items in my purchase that day, I didn't notice the pricing snafu until after the transaction was complete. I pointed the price error out to the cashier, he called over his manager, I showed her where I had picked up the disc and also the other places in the store where the disc appeared behind that advertised price. She examined the merchandise and told me the SKU didn't match. Fair enough, I said, find me the disc with the corresponding SKU and I'll take that at the advertised price. Well, after about 1/2 hour of searching, they discovered they had displayed an advertised price for the BluRay-only version that wasn't scheduled to street until the next day. They had copies in the back but weren't allowed to violate the street date by selling them. So, rather than just admit they were at fault and do the good customer service thing of honoring the price they had posted for the merchandise they posted the price in front of, they refunded me outright for the BR+DVD I had purchased and invited me to come back the next day to pick up the correct item. I told them if they wanted to sell it to me right then and there for the price they had posted, I would buy it, but I would not be coming back the next day.
I feel compelled to mention that I was not trying to sneakily obtain the combo pack for the single price: I truly did not realize when I picked it up that there was another version. I should also note that the staff did not make any effort to correct the display in order to prevent other customers from having the same experience.

I agree the writing is on the wall for Best Buy.
Not exactly related, but, I think OfficeMax is doomed too. Office Depot too.
Then Staples will change to online/delivery only, because there will no longer be a need to rent immense storefronts.
Ultimately the only storefronts that need to exist locally are food-based, and only because of spoilage.

gene c said:

But this is bigger than a couple of electronics retailer having problems. It also makes me wonder where so many people are going to be working in a few years. Retail is a huge part of our emplyment. Best Buy, Frys, Sears...who's next?

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I wonder the same thing. Computers and all this information access is going to render more people obsolete than we have jobs for them to do. Not just in retail but in just about every single industry, as customers just turn to their tablet / phone / computer to find the cheapest price for just about anything, and then be done with it.
But back to BB, I enjoy their store, but I agree w/ a lot of things the article points out. I've been approached every time I go there by the Direct TV sales people. When that happens, it is poor sales, simple as that. Here's why:
You have a customer looking and touching products on a shelf. A sales opportunity. So do they try to help close the sale on what they are obviously interested in buying right then & there? No, they take the customer out of that process and de-rail them into something unrelated.
When that happens to me, I'm always pleasant and respectfully decline. No harm to me in asking. But I suspect they occasionally, inadvertently lose sales as the person leaves w/ out both Direct TV and the other item they may have bought.
I hope they can find better solutions. I enjoy going there. They aren't going to be the only big box facing this problem in the coming years. Off topic a bit, but an unintended consequence from the demise of big box retail: the empty carcasses they leave behind. Commercial real estate is having a difficult time filling these things and they can't be easily retrofitted.

"Off topic a bit, but an unintended consequence from the demise of big box retail: the empty carcasses they leave behind. Commercial real estate is having a difficult time filling these things and they can't be easily retrofitted."
I think many, if not most, of the Circuit City stores are still empty in and around the S.F. Bay Area. The one near me was used as a Halloween Store.

The one near me sat empty for a couple of years before PC Richards moved in. (Yuck.) One block up the road, a large two-story Linens & Things that also closed in 2008 still sits empty. A little further along is another building that housed two large stores, one of which was used as a Halloween Store, and both still sit empty now.

If this keeps up...it's gonna be kind of pointless to put together a Weekly RoundUp.

An HTF member complained on another thread about Best Buy failing to honor a Black Friday deal. I said that you wouldn't catch me dead in a big box store, Costco excepted, after suffering rude staff once too many times.
In the early nineties, I was the only customer in a Tower records book store in Sherman Oaks. There were three 'employees' behind the counter in deep conversation and I'll never forget the look I got from the female for daring to interrupt with a question, followed by an irritable tone that set me on my heels. Not long after that I visited their classical store across the street. Again I was the only one there, apart from the 'employee' who had his head buried in a book and never looked up until 10 minutes later when I approached him with a question. Again the irritable response that didn't even answer my question. At the time, I put the attitudes down to employees who either didn't want to be there, or felt they weren't getting paid enough to warrant any effort beyond ringing up an item that was carrried to them at the cash register. To be fair, not all were like that every time, but I lost the will to experiment. I turned to catalogs for my books and movies until the miracle of Amazon happened.
My response also mentioned my experience trying buy the Ben-Hur Blu from a Walmart I had driven miles out of my way to get to. She wasn't rude, but the girl in charge not only didn't have the disc in stock, she'd never heard of the movie! As I said, I could have bought the collector's box set from Amazon for less than it cost me in gas and wear and tear on my car, not to mention the biggest waste of all--my precious time.
I ended the post by mentioning the recent online reviews I read for my local Best Buy that reminded me all too well of Tower -- who are probably still wondering what hit them! As for Fry's and Circuit City............the less said the better.

Enjoy your big box retail stores sitting empty for years to come. Enjoy your locality losing out on sales tax revenue and cutting back in services like police and fire. Watch the locality turning off highway lights, like they did here in Tulsa with lights and police.
Now that doesn't mean you should have businesses that leave a bad taste in your mouth but having empty buildings hurts your local economy and increases the unemployment rate, especially the among the teens to early 20s. Think that is one problem with the retail today is lack of maturity with sales help. Don't think they can appreciate the need to learn good sales communications or help a dissatisfied customer. Just too many big box retailers using low wage young workers that think it is just a part time job and having to learn the products that are difficult to use or take lots of time.
Also know that 10-20 percent of the customers that come into retail need to learn how to be a customer, they are rude, no manners, like to steal, which effects fulfilling online orders, think they can complain about policies that are posted and they know what they are in advance.
Least in Tulsa i see all kinds of great feedback from customers, some not so good but ALL large companies have this even Amazon.
Also keep hearing about people on this site complaining that BBY's prices are always higher but then you hear that people complain about China making our products and taking jobs away from us. Can't have your expected low price and expect to have it made here with very low margins. True, i won't pay $24.00-29.99 for a marginal blu-ray and might even not pay for $14.99-19.99 but $9.99 or under can make the deal except the retailer will not make any money on that price.

Since my last post was pretty down on Best Buy, I feel compelled to mention I recently purchased a PS3 and have now ventured into the video game section of the store where I have found the staff to be very knowledgeable, helpful and eager to be helpful. I've also found their staff to be quite helpful in other areas, so maybe it's just the loss-leading DVD/BluRay/CD area that's to be avoided.

It is SD_Brian!
I do work there as my post would give that out.
BBY outsourced all of physical media, except video games, to a company called Anderson. They also do some other retailers like Walmart and they don't wear blue shirts but white. They also have no media knowledge or do much for customer help as i can see and i hear this from other stores in the company. True some of us didn't know much about movie or cd knowledge as time went on but it was better than what we have now.

irishsooner said:

Enjoy your big box retail stores sitting empty for years to come. Enjoy your locality losing out on sales tax revenue and cutting back in services like police and fire. Watch the locality turning off highway lights, like they did here in Tulsa with lights and police.
Now that doesn't mean you should have businesses that leave a bad taste in your mouth but having empty buildings hurts your local economy and increases the unemployment rate, especially the among the teens to early 20s. Think that is one problem with the retail today is lack of maturity with sales help. Don't think they can appreciate the need to learn good sales communications or help a dissatisfied customer. Just too many big box retailers using low wage young workers that think it is just a part time job and having to learn the products that are difficult to use or take lots of time.
Also know that 10-20 percent of the customers that come into retail need to learn how to be a customer, they are rude, no manners, like to steal, which effects fulfilling online orders, think they can complain about policies that are posted and they know what they are in advance.

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Local taxes used to be earned from the little stores that usually provided polite and knowledgeable service but were bulldozed out of existence by the big box jobs, who presumably thought they were 'too big to fail', no matter what quality of service they provided. The knowledge that they pay minimum wages to untrained staff doesn't make visiting them any more enticing or compelling to me.
Detroit tried the 'Buy American' tack to make people feel it was unpatriotic not to purchase their inferior, over-priced product. Why should others spend their hard-earned, limited resources on a lemon that would become a continual drain on those resources (not to mention precious time lost, or even jobs put in jeopardy due to breakdowns), just so over-paid and incompetent managers and workers might contnue to be over-paid while remaining incompetent? They learned a hard lesson at great cost (though, unfortunately, many of those responsible for the devastation are enjoying rich pensions) to those who came behind and, of course, to the taxpayer.
The only way to win in today's ruthless global market is to provide a superior product or service. Germany has proved that knowlegeable companies and consumers in other countries are willing to pay a premium for quality, a word that was once synonymous with 'American'.

I've known people that have left greatly ripped-off from their "Geek Squad" over the years. They've all agreed that they take complete advantage of the fact that the customer lacks knowledge of PC maintenance and overcharge for simple services like virus scans, which can easily and efficiently be done at home using freeware. The "experts" at the local store also have surprisingly limited skills in computer repair beyond beginner level methods like virus checking or system restore. Wouldn't surprise me if they're pushing the consumer to buy new Best Buy hardware.
After reading the article, it does surprise me how disconnected these retail chains are in regards to online symmetry. In cases like Wal-Mart and Best Buy, it sometimes seems like the online site and physical retail stores are completely separate in terms of service.

marsnkc said:

Detroit tried the 'Buy American' tack to make people feel it was unpatriotic not to purchase their inferior, over-priced product.

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Whenever a company appeals to patriotism instead of extolling the virtue of its products, it's a SURE sign they're not competitive.

I think the idea is that, all things being equal or nearly so, support the option in your community. If the price is the same at Best Buy and Amazon, buy at Best Buy because: a) they pay into your community in the form of rent and taxes, and b) once all of the Best Buys of the world are out of business, you're not going to be getting the same deals from the Amazons of the world. They won't have to be competitive any more.
I use Amazon just like most people, but I strongly prefer brick and mortar stores. I like holding a product in my hand, and examining it to ensure that there is no damage. When Borders was still open, I was an incredibly loyal customer who benefited extremely well from their rewards program. Now that they've gone under, I divide my book business fairly evenly between Barnes & Noble, the small local booksellers and Amazon. I try to buy books new when the author is still living, even if I pay several dollars more, because I see that as an investment in getting more new material from a creative talent I admire.
There's no right or wrong answers in any of this, except to say that the online retailers we're so fond of are only as good as they are because of their brick and mortar competitors.

Quote:Local taxes used to be earned from the little stores that usually provided polite and knowledgeable service but were bulldozed out of existence by the big box jobs, who presumably thought they were 'too big to fail', no matter what quality of service they provided. The knowledge that they pay minimum wages to untrained staff doesn't make visiting them any more enticing or compelling to me.
Detroit tried the 'Buy American' tack to make people feel it was unpatriotic not to purchase their inferior, over-priced product. Why should others spend their hard-earned, limited resources on a lemon that would become a continual drain on those resources (not to mention precious time lost, or even jobs put in jeopardy due to breakdowns), just so over-paid and incompetent managers and workers might contnue to be over-paid while remaining incompetent? They learned a hard lesson at great cost (though, unfortunately, many of those responsible for the devastation are enjoying rich pensions) to those who came behind and, of course, to the taxpayer.
The only way to win in today's ruthless global market is to provide a superior product or service. Germany has proved that knowlegeable companies and consumers in other countries are willing to pay a premium for quality, a word that was once synonymous with 'American'.
Pretty much true but would add little stores couldn't offer give away financing terms, selection, pricing, which at the time was a big deal when big box retailers came to town but not so much more, return policies were harsh back then compared to today. Still return things if you know what you are doing.
Those geek squad experts, at least in my store can run circles around so-called customer experts. I have used them for some things that i couldn't get my ass out of.
Like when you go to buy a car they don't teach you how to drive, so when you buy a pc learn how to use one! lol!
Give you this, my father would rather deal with someone who can provide service and will pay more for it. He's had some bad experiences with BBY and felt helpless!

Well, I will tell you Blockbuster going under has been great for me.. I spent the weekend and stocked up on Blurays at $3.. and snagged some good ones.. and nothing like grabbing flicks like Cars2 full unopened retail for $8, and so on. I wish I had taken in more money earlier, because while they had a lot of total crap, some of it was still worth snagging. Hell, I grabbed Green Lantern, because while not a great film, at $4.50, it was good enough.

I've likewise been making a pretty good killing at the local FYE that's closing.