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Best Buy closing stores

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Old 03-29-2012, 09:38 AM   #1
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Default Best Buy closing stores

I knew this was coming...

http://news.cnet.com/8301-1001_3-574...ncol;cnetRiver
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* It will cut $800 million in costs by fiscal 2015.
* Close 50 big-box stores this fiscal year.
* Open 100 Best Buy Mobile and small stores this year.
* Boost online revenue by 15 percent.
* And Best Buy will change its employee compensation model to revolve around customer service and business goals.
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Old 03-29-2012, 10:26 AM   #2
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Originally Posted by Cygnus View Post
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And Best Buy will change its employee compensation model to revolve around customer service and business goals.
I think that is probably a smart move. But I still think it is too little too late for Best Buy in many ways. Their website still sucks and I still don't really see them competing with Amazon, Costco, Sams Club, for my larger ticket items.
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Old 03-29-2012, 10:30 AM   #3
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But Blu-ray was up 20% YoY?!?
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Old 03-29-2012, 10:42 AM   #4
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U.S. Flat Panel TV Shipments To Fall, First Time Ever

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Old 03-29-2012, 10:51 AM   #5
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When you build your business model around commission-based sales drones pimping expensive cables and misleading people into thinking LED is fundamentally different from LCD ("The "E" is two more than the "C!"), you kind of have to expect word will get around and that smaller players like Monoprice might offer cables that perform every bit as well.
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Old 03-29-2012, 11:04 AM   #6
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It is a long read, but a very good one:
http://money.msn.com/investing/why-b...il-forbes.aspx
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Old 03-29-2012, 11:46 AM   #7
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Unfortunately, more and more consumers have been going to Best Buy to view the product, and then ultimately making their purchases online.

I've always tried to make my purchases at a B&M store if they are priced close enough to online retailers, since they do provide the ability to actually view/touch the product to see how it performs, and their overhead expense has to account for something.

Sadly, once they close, there will be one less venue to actually see what you buy before buying the product.
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Old 03-29-2012, 11:49 AM   #8
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Originally Posted by teddymines View Post
When you build your business model around commission-based sales drones pimping expensive cables and misleading people into thinking LED is fundamentally different from LCD ("The "E" is two more than the "C!"), you kind of have to expect word will get around and that smaller players like Monoprice might offer cables that perform every bit as well.
If I remember correctly, Best Buy isn't commission based, unless that changed.
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Old 03-29-2012, 11:53 AM   #9
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Unfortunately, more and more consumers have been going to Best Buy to view the product, and then ultimately making their purchases online.

I've always tried to make my purchases at a B&M store if they are priced close enugh to online retailers, since they provide an avenue to actual view/touch the product to see how it performs, and their overhead expense has to account for something.

Sadly, once they close, there will be one less venue to actually see what you buy before buying the product.
That is the point of the article above and I tend to agree with it. Best Buy needs to meet or beat Amazon at their own game. It is not enough to have a physical store, you have to offer a good shopping experience with great customer service, and a no-nonsense return policy. You also need to have seamless functionality between your online store and your physical store. The prices should be the same, it should be easy to see what is and is not in stock in the store online, and it needs to be accurate.

Best Buy, to be frank, is nowhere close to offering the experience I get when shopping at Amazon. Their stores are poorly configured. Their staff is annoying more than helpful 80% of the time. Their online prices are often cheaper than their in store prices and you have to spend the 5-10 minutes it takes to get a price adjustment.

It is not close. If it was close to Amazon, I would shop there more.

From the article:
Quote:
Amazon lives and breathes the customer's point-of-view. It completely engineers its business practices, its systems and its people to support it. When the folks at Amazon make a mistake, they admit it and they fix it. Immediately. Once, when I had a problem with a new TV that turned out to be a manufacturing flaw, the company begged me to let them pick up the unit, send something else and install it for me. That was more solution than I needed, let alone asked for.

It's not just Amazon's prices that are better, in other words. Its customer service is superior in every way. And unlike traditional retailers, it recognizes its own potential disadvantages and innovates ways to overcome them. The company has no retail locations to pick up merchandise, but it ships instantly, often for free. It has no on-site sales experts to answer questions, but the pages of its products are filled with videos, FAQs, and customer reviews and answers.

The company keeps track of all previous orders, and uses its database to make helpful recommendations of other purchases. Phone support is instant, responsive and knowledgeable. Returns are simple and unburdened by restocking fees and other gotchas. Inventory is precisely managed in a single system that spans all distribution points and third-party partners.

Best Buy could have done all of this years ago -- and done it better. It had decades of experience in retail, in customer service, in distribution, in forecasting, in marketing and in sales. It had, one presumes, computer systems that could have been upgraded to integrate with a new online front end. It had expertise in the electronic products it sells and potent leverage over key manufacturers to ensure favorable terms and access.

(Years ago, the CEO of a leading appliance manufacturer told me he felt obliged to keep a low profile on the Web or face the wrath of his main retail partner. Not many years later, the partner, Circuit City, was out of business. Oops.)

But Best Buy squandered all of those assets. And now, along with many of its big-box peers, the company is caught in a death spiral. Not because of new competitors who, fairly or unfairly, are eating its lunch. These wounds are self-inflicted.
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Old 03-29-2012, 11:55 AM   #10
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This is hardly a surprise. I told everyone Best Buy's days are numbered. Looks just like Circuit City 2.0

Everyone already uprgaded to surround sound and hdtvs durring DVD's heyday.

Last edited by chipvideo; 03-29-2012 at 01:49 PM. Reason: replaced FS with CC
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Old 03-29-2012, 12:02 PM   #11
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50 larger stores out of 1000. That's 5%. That's leaving 95%.

Most of those will probably be older under performing stores that were duplicate stores in the same urban or suburban markets.



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The Minneapolis-based consumer electronics retailer said it would shutter 50 big box stores in the current (2013) fiscal year as it plans to cut $800 million in costs through 2015, including $250 million this year. It plans to open 100 smaller footprint Best Buy Mobile stand alone stores during the same period.

Best Buy ended 2011 operating more than 1,000 stores in the United States. It plans to operate 600 to 800 Mobile stores in the coming years, up from 305 stores today.
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Old 03-29-2012, 12:09 PM   #12
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Originally Posted by GizmoDVD View Post
But Blu-ray was up 20% YoY?!?
Yes Blu is up but Best Buy is down. People are buying their films, music, TVs, computers and various items from other retailers. They are, after all Amazons showroom. I have said this before but many of the employees I run into at Best Buy are unhelpful and seem to spend more time talking with other employees about last weekends date or being more concerned with their newly forming pimple than to help the customer. Best Buy customer service sucks!

Also I read elsewhere about the Best Buy issue that some are saying the demise of Best Buy may bring us back to smaller and locally owned electronics stores where inventory is properly managed and the customer is top priority.
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Old 03-29-2012, 12:14 PM   #13
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Originally Posted by chipvideo View Post
This is hardly a surprise. I told everyone Best Buy's days are numbered. Looks just like Futureshop 2.0

Everyone already uprgaded to surround sound and hdtvs durring DVD's heyday.
Not just that but the market I live is when it comes to items like mobile phones is saturated. Companies like US Cellular are merging districts or getting out of the market completely. When I went to look at the new Samsung Note Phone the other day at Best Buy no one was in the mobile section. Matter of fact very few in the store period.
Best Buy is running itself into the ground and I feel bad for the few good employees that wil lose their jobs.

Last edited by TowerGrove; 03-29-2012 at 12:28 PM.
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Old 03-29-2012, 12:27 PM   #14
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It will be Circuit City all over again and we definitely saw this coming.
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Old 03-29-2012, 12:35 PM   #15
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It will be Circuit City all over again and we definitely saw this coming.
It is amazing isn't it? That Best Buy makes the same mistakes CC did?
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