Uh-oh, this seems to be the beginning of the end for BB: once you get into this looking for a good CEO candidate thing, things generally do not go back up, e.g. Yahoo, Motorola.
BB's problems are myriad, but to me a single problem stands out clearly, and it's not Amazon's competition: It's the hapless nature of their store associates:
i) In BB stores, when you walk in it's always hard to find an associate.
ii) When you do find them, they tend to be starry-eyed young guys who know next to nothing about the products and usually resort to random searching of the aisles, which of course you could have done yourself.
iii) When they need to check for product info, e.g. "Do you have it in stock"", "Does this work with that?" They have to walk back to a computer screen on their desk and check using the browser, which of course you could have done much faster on your phone.
It's hard to create a low-paid task force that's also knowledgeable about the intricacies of tons of electronic products. So the solution is to use in-store tablets with a helper app running on them. In other words, go to an Apple store, observe for 15 minutes, come back and replicate. BB already has great inventory APIs, coming up with a very useful v1.0 shouldn't be hard.
That isn't a problem at all for me. In fact I prefer to be left alone by sales people. I always know more about what I'm getting than they do, and like to take time weighing the options.
My problem with them is that they have phased out a lot of non-store brand hardware (Dynex and Rocketfish are their store-brands) and put ridiculous markup on everything. Then they essentially scam you with marked up store brand crap or Monster Cable/Monster Power, then push silly Service Plans on you, and in some cases try and charge you for "calibration" or "optimization".
Apple Stores' POS/Associate system + automated B&H style purchase delivery + the removal of most packaged goods and leaving only display models = less shrinkage + more helpful associates + shorter lines = profit.
> “I have enjoyed every one of my 28 years with this company, and I leave it today in position for a strong future. I am proud of my fellow employees and I wish them the best,” Dunn said, double-checking his parachute as he prepared to leap from the burning airplane.
I wonder if Ron Johnson (the guy behind the Apple retail concept) could have turned around Best Buy, had BBY picked him up instead of JC Penney.
The Apple store philosophy seems to be "We think most people will be delighted with our products. But if we can't make you a happier person for buying this product, we're just wasting your time trying to sell it to you, and making it less likely you'll want to come back when we do offer a product you might enjoy."
Meanwhile every shopping experience I've had at Best Buy tells me their philosophy is "You need x, but we'll convince you to buy y, and we'll try our hardest to pack in a high margin accessory bundle too. So buy it and get out, so I can move on to the next sucker. Oh, and you had better be buying a service plan on that."
Then again, if you can't turn the place around by making it a place where people actually want to shop and reflect favorably upon their experiences, then maybe the big box electronics concept is just falling out of favor altogether.
All my Apple products have been purchased from Best Buy (except iPad 3 which I had engraved), why? Because of the Reward Visa that I have with BB. But I dread buying Apple products everytime I go to BB – you never find someone that's free, I'd have to hunt down employees or stand next to one as they helped other customers (which took up to 30 minutes once) and wait for my turn. And after telling them what I exactly want, they'd disappear for 15 minutes in the backroom, only to come out with the wrong model, another 15 minutes before they tell me they don't have it in stock.
It's a horrible buying experience but I endure it for points (especially when one spends thousands of dollars, it can really rack up). It's the only reason why Best Buy still gets my money.
(If Apple had their own Loyalty/Reward kind of program on top of their customer service, it'd be so full of win.)
I've purchased two MacBook Airs from Best Buy and had the exact same experience. Walk in knowing exactly what I want and ready to buy, wait ~30 minutes for an associate to free up only to be told that he/she doesn't manage that area, and then wait some more for someone that does.
The reason I bought from Best Buy rather than the Apple store is the discounted price. Best Buy sells the Air for something around $50 cheaper than Apple. I haven't made use of it yet, but their Black Tie warranty seems pretty good. You're covered for everything from hardware malfunction (out of your control) to accidental coffee spills (in your control).
This is my rant about Best Buy:
Coming from a technical family (my dad being an IT director) at a small age I was dissecting computers and fixing them back. I love computers and that's what lead me into web dev. I'm still very technical in this area and I'd say I'm a pretty good hardware and software fixer.
That being said, when I go into BB it saddens me to see how they up-sell ignorant people. It bothers me so much. I'll be inline behind someone and they'll offer an initial setup and cleaning of your new PC for $75+ and I'm thinking to myself I could do this in 20 minutes and I'd do it for a lot less. Installing memory is way more than it should be. Backing up and restoring, etc, all relatively simple things they charge so much for.
And without the "geek squad" prices, their hardware prices are just high. Best Buy is for ignorant consumers who don't know about computers or geeks that need something asap and cave to pay the difference.
There needs to be a chain like this that doesn't screw people over, that has excellent customer service and doesn't continue to BS people about things that they really don't need. There's a business model to be had with treating people right.
Retail computers are a tough business because of the need to stock rapidly depreciating inventory. There was a big market for doing it better and cheaper (chiefly through having less retail inventory, forgoing some of the instant gratification); see Dell and Gateway and the web. There is a market for doing it better and more expensive; see Apple. There is a market for overpaying for instant gratification and somebody to provide you marginal advice; see Best Buy.
If your fundamental disagreement is against the concept of overpaying for instant gratification and a bit of hand holding, there are many better targets that meet your complaint. I'd probably start with restaurants, for you can cook at home for a lot less in 20 minutes and it's a relatively simple thing that restaurants charge so much for. Yet people seem pretty ok with the opportunity to sometimes trade their hard earned cash for somebody else to do it for them.
That being said, when I go into BB it saddens me to see how they up-sell ignorant people. It bothers me so much. I'll be inline behind someone and they'll offer an initial setup and cleaning of your new PC for $75+ and I'm thinking to myself I could do this in 20 minutes and I'd do it for a lot less. Installing memory is way more than it should be. Backing up and restoring, etc, all relatively simple things they charge so much for.
You're right, and there's a big potential for disruption here. But it isn't easy- once you have a service that relies on physical presence somewhere things get expensive quickly. But I can see it- a sort of AirBnB for tech support. Or something.
Outside of the geek squad prices, their price on hardware/software is pretty cheap, and they and their sister company in Canada: Future Shop have single handedly changed the pricing of electronic goods in Canada to much cheaper prices, and have subsequently put some Canadian/provincial chains out of business.
Granted they are not cheaper then online retail but I for one thank them for the price change they have brought
Right. I hate their "bait and switch" tactics with the low tagged price on a given machine acting as a trojan horse for their ridiculously expensive warranties. They must place a ton of pressure on their salespeople to push them; I refused one a few years back and the customer service guy put me through a gauntlet of managers drilling me on why I needed it before they all finally fell back. The average non-tech savvy customer is just going to cave in.
> I refused one a few years back and the customer service guy put me through a gauntlet of managers drilling me on why I needed it before they all finally fell back.
You must have really, really needed that machine. I think I would have been escorted off the premises somewhere between the introduction of Manager #1 and the attempted introduction of Manager #2.
It wasn't so much the machine, just the fact that I had to confront the arrogance. I knew what I wanted. I also knew that if the sale was lost (me walking out), it would not have shown up in said managers performance metrics. I purposely bought it without the warranty, knowing that they would have to account for why I wasn't an "upsell".
I worked at BB for a year back in the day. I can say that the blue shirt employees were only good for 2 things: attaching overpriced high-margin peripherals/cables to sales, and pushing the extended warranties. Those who were not good at either did not last long there.
This is what bugs me. I used to want to work at best buy being a geek, but instead they hire people with selling knowledge rather than technical skill.
B&H is like this, but their only retail location I know of is in Manhattan. Their selection of high-end consumer / pro-grade electronics can't be beat for a walk-in store.
Apple retail stores do a great job in this area of customer service and really trying to help the customer. Too bad their product selection is limited.
> That being said, when I go into BB it saddens me to see how they up-sell ignorant people. It bothers me so much. I'll be inline behind someone and they'll offer an initial setup and cleaning of your new PC for $75+ and I'm thinking to myself I could do this in 20 minutes and I'd do it for a lot less. Installing memory is way more than it should be. Backing up and restoring, etc, all relatively simple things they charge so much for.
The same argument can be made for cars(oh boy, a car analogy!). It's much cheaper to change your own oil yet people still go to oil change shops and pay a ton of money for it.
The reasons are ignorance(not knowing how to do it yourself) and convenience.
I'd be hard pressed to blame the CEO for the all of the ills that plague Best Buy, though I have to give the man credit for knowing when to step aside. After 28 years with the company I'd say he deserves a rest.
The problems that exist with the company, I think, mostly stem from the pool from which they have to select their work force. It's hard to keep up any sort of reputable service when you get so big. Saying that, Apple seems to be doing okay..
>"I'd be hard pressed to blame the CEO for the all of the ills that plague"...
That's exactly what the CEO's job is and that's why they get paid so much money. It's their responsibility to look out for everything that happens in their company. As other comments have stated, change happens from the top down. Now, I don't know the specifics around Best Buys problems or how the CEO could have fixed it, but that doesn't mean that its not his job to figure it out.
I recently purchased some things at an Apple store and it couldn't have been easier. I never saw a cash register, in fact never moved from where I was. I said that I would like to buy a MacBook Pro and they brought one out to me, I swiped my card, signed my name (on an iPhone), and walked out of the store. The last time I purchased something at Best Buy it was much more complex, took longer, and I had to run all over the store. I think there is some innovation left in the brick and mortar model but it's not going to be easy and they are running out of time. Most of my purchases are completed on the Internet now and I don't see Best Buy (or any other retailer) giving me any reason to change that.
The problems start at corporate HQ. I worked there as a contractor for a few years. Getting anything done there is a huge political struggle. When I was there, at least, B&M and dotcom were two separate concerns, often with conflicting goals. Product was off doing its own thing. Everybody there seemed to forget they were all playing for the same team.
I routinely worked with MBA's from supposedly reputable schools who could put excel spreadsheets together, but couldn't interpret the results. Most full-timers spend their days in meetings while contractors do the real work. When I finally left, they offered me a few plush full time positions, in which I would have vague responsibilities and ill-defined deliverables. No thanks, I told them.
Everybody there felt pretty smug when they were kicking Circuit City's ass. Now the shoe's on the other foot.
I can back you up on this. I also worked at corporate as a contracter on the dotcom team and it was a total circus. After outsourcing the work for their website for so many years, the entire site was a disaster. Not to mention the "business" side was running on waterfall while our team was trying to do agile. Worse? Mangers on both sides knew it and did nothing about it - this was just considered "normal" there.
I pulled the plug after only 8 months - it was crazy what was going on there. Afterwards, a few of my friends who also did short stints there were amazed I lasted that long.
I purchase from Best Buy because of the no-interest deals they have with their credit cards. It's convenient when I want something now, and know that I'll have an extra few injections of extra cash coming in the next couple of months to support it.
Regarding customer service, I had a great experience at a Chicago store. I just bought the 11" Air and decided it was too small for me, so I took it back with the intention of upgrading to the 13". I was waiting in line to exchange, when they noticed I was exchanging a MacBook and they whisked me off to a separate area to complete the exchange, saving me about 15 minutes of waiting time.
With regards to pushing their warranty's, I think they asked me once and then let it go.
I agree that some of their stuff is overpriced, and they could improve their sales workflow with tablets or whatever, but my experiences don't reflect the negative ones I'm reading about here.
This type of business is bound to change as technology evolves. It used to be people would get the good information from Circuit City and then go across the street to Best Buy for better prices. And now Circuit City is gone.
Somewhere down the line Best Buy started over charging for services that aren't necessary. My primary example of this is that they offer to come calibrate your new HDTV for $500 upon purchase. You can order the same software they are using off of amazon for $12. Another thing is their price on cables. They just rip you off and smile in your face. Its annoying. Geeks like to shop at tech stores, you know? These sorts of practices force us to purchase things online.
I just think somewhere down the line Best Buy quit putting the customer first and just like the rest of the comments, this seems like the beginning of the end.
This seems to be very dependent on the people and store locations. We just bought a $2k HDTV, and weren't pressured in to warranty, weren't upsold on any services like that, and they delivered, installed and configured it for free.
re: cables - every retail store rips you off. go to target, walmart, radio shack - they all have $20 cables that you can get online for $5. I've had other geeks laugh at me when I complain about cable pricing. "Dude, just get it online!". Well... when I need a cable, I need a cable. I don't want to preemptively buy 5-6 cheap ones online (however cheap they are) on the offchance that I'll need one of them later.
maybe, and maybe, because we bought a more expensive one, there was no call/pressure to upsell? they'd already hit a profit min for that sale? still, I'm not even sure we were offered an extended warranty. Well... maybe. been a few months now - can't remember.
Maybe it's just me, but I think a lot of the things that drew people to Best Buy at one point - powerful computers, big TVs, customized theater setups, rows of DVDs - have gradually gone from sexy to culturally irrelevant (still a profitable niche, quite possibly) in the last 15 years. They've become the workmanlike, unsexy appliance showfloors they put out of business by the early 00's.
Speaking as a Minnesota native, this is just all kinds of sad. Believe it or not, Best Buy used to be a more or less local chain that was known for their customer service and that inspired all kinds of customer loyalty. They were like the Fry's of the Midwest, except that it was usually possible to get useful technical information out of the employees.
Is INNEAPOLIS a place or did they really misspell the companies head quarters location.
A quick search shows their head quarters are in Minnesota so it looks like they did. Or possibly it's shoddy reporting by the website who cut and pasted the press release?
It's going to be harder and harder to operate businesses that rely on the ignorance of their customers to achieve their margin goals. The last time I was in BB, I was trying to pick up a Roku box. After upselling me by being out of stock on the heavily advertised cheaper model, the sales person tried to sell me a connector cable that cost more than the box itself. Nice!
There is no real news about BB's business model in this announcement. A more interesting question is what remaining verticals are relatively untouched by transparency and fact-based marketing?
BB isn't going away, it'll just be forced to change. Change it's atrocious cust. service, adopt some technology and probably close a ton of stores. Not to mention have more competitive pricing. Now I'm not at all a fan of BB. But I think BB will survive in some form because there are still many people who still like to have things instantly and see/try physically. There's still a segment out there, like the older generation that still need to go somewhere for 'advice' and get hands on goods.
I know you picked 'the older generation' as an example, but I think it's worth pointing out that I see far too many people under the age of 30 who are clueless, or worse, they feel they have a grasp of tech but can barely figure out anything other than Facebook.
Many people 60+ are feeling left out and jumping on the bandwagon. All ages who exhibit the Dunning-Kruger effect in this manner will likely never know they are clueless.
I'm 27, and the number of people I know around school (TAs included) is astounding, even in CS.
In my local (Fort Lauderdale, FL) best buy and apple store, there are plenty of these types of people too.
I think at BB when they figure out how to sell themselves they end up at the geek squad.
The same could be said about buying books and renting videos, but Borders and Blockbusters are both on their way out. I agree with the other comments that this is the beginning of the end for BB.
We are in an era where online businesses are starting to have a real impact on brick and mortar stores.
The same could be said about buying books and renting videos, but Borders and Blockbusters are both on their way out.
Until someone figures out a way to stream me a SATA cable that I'm missing for a new computer build I'm putting together on a Saturday, I think that Best Buy will be able to hang on for quite a while.
Dunn has been there for 28 years. He started as a sales associate an become CEO in 2009--truly a remarkable career progression. Dunn may not have caused Best Buy's mess, but he was promoted by the same people that oversaw it.
I parted ways with Best Buy last month and the writing has been on the wall about Brian for months. Lackluster vision, missed opportunities to capitalize on growth combined with soft performance meant this was all but certain.
BB's problems are myriad, but to me a single problem stands out clearly, and it's not Amazon's competition: It's the hapless nature of their store associates:
i) In BB stores, when you walk in it's always hard to find an associate.
ii) When you do find them, they tend to be starry-eyed young guys who know next to nothing about the products and usually resort to random searching of the aisles, which of course you could have done yourself.
iii) When they need to check for product info, e.g. "Do you have it in stock"", "Does this work with that?" They have to walk back to a computer screen on their desk and check using the browser, which of course you could have done much faster on your phone.
It's hard to create a low-paid task force that's also knowledgeable about the intricacies of tons of electronic products. So the solution is to use in-store tablets with a helper app running on them. In other words, go to an Apple store, observe for 15 minutes, come back and replicate. BB already has great inventory APIs, coming up with a very useful v1.0 shouldn't be hard.