Best Buy is in trouble you know. It’s in the news all the time. I wrote a big column about it myself last year. Same store sales have suffered, corporate employees are being laid off, the big U.S. electronics retailer is pulling out of Europe. Best Buy management is in turmoil. The founder leaves in a huff, then tries and fails to take the company private, and is now making nice-nice with the same management he previously reviled. There’s a new head of stores (I wish him well) who thinks the answer is price matching, better sales training and paying workers to sell more stuff, which sounds like commissions to me (Best Buy was always anti-commission). And all this drama is generally lain at the feet of Amazon.com on the Internet and Walmart down the street, both of which have reportedly been cleaning Best Buy’s clock. Only they haven’t. Best Buy has been killing itself with bad Information Technology.
It’s been a long, long time since I introduced a new Cringely Law, but here comes one (I’m not sure what number this is), courtesy of Best Buy: compartmentalized IT can kill companies that are understaffed and overstressed.
Compartmentalized IT is where you have firm A running your Intel servers, firm B running your Unix servers, firm C running your mainframes, firm D managing your users and desktops, firm E running your network, firm F managing your firewalls and security, etc. Companies believe they can get better service and lower prices doing this. The problem with this model is it introduces huge risks.
The vendors don’t talk or cooperate with each other. When there is a problem their first inclination is to blame each other. When a problem is isolated to a single system or platform, the vendor can usually fix it. But when the cause of a problem is not obvious or it spans multiple platforms, then you are in trouble. The teamwork you need to diagnose and fix the problem is weak with that crowd of vendors often refusing to work together at all
That’s how IT works today at Best Buy. Best Buy needs better inventory management, better customer sales experience (both in stores and on the Internet), a much better web site, better product information and support, better product management, better purchasing, etc. In a modern global retailer most of these functions are IT’s responsibility. If you have a highly fragmented IT organization that is not cooperating internally and not contributing to the development of your business, then management will never know what IT improvements and investments they need.
It’s noteworthy that in all the press releases from Best Buy about this turnaround program or that, IT is never mentioned. That’s because they don’t even know it’s a problem.
I have visited Best Buy intergalactic HQ in Minnesota and was totally unimpressed. The IT people I met were incurious. That’s a bad sign. They were complacent. That’s a worse sign. Their web site wasn’t very good but you know they didn’t care because making the online experience better might keep customers shopping at home and not coming to the stores. Honest to God, they think that way.
I am not making this up.
Companies like Best Buy purchase products in huge volumes then resell them. That is most of what they do. There’s no genius in purchasing at Best Buy. They have no reverse auctions I know of to get wholesale prices down to rock bottom. Even worse is their poor inventory management — an area of expertise where Walmart is king and Best Buy isn’t.
Visit a Best Buy and you’ll see a lot of product that doesn’t move and collects dust. You don’t want to be in the technology sales business and have inventory that doesn’t move. Those TV’s that sold for $1000 at Christmas are now priced at $800. The slower Best Buy moves its inventory, the more of it they will have to write off or sell at a loss.
It is clear what Best Buy needs to do and it starts with IT providing the systems they need to better run their business. With over 1000 contract and outsourced IT workers and only a handful of direct Best Buy IT employees, that’s not going to happen easily. Most of the stuff they need already exists, but instead of just laying-off corporate IT employees, Best Buy should be hiring better ones — lots of better ones.
If it takes Best Buy 2-3 years to fix their inventory management, that’s a lot of product they may sell at a loss. It’s also a lot of stores that will be closed.
There are ways Best Buy could use technology to run a smarter business. Why does Best Buy have such large CD & DVD departments? I am amazed by stagnant inventory and high prices. Best Buy would be much smarter to stock only the new and fast-moving CD’s and DVD’s. Put in a system in each store where you can (legally) burn on demand any CD or DVD in existence. Put in some really nice kiosks that can quickly and easily find any song, any group, any scene, any movie, any TV show. Just swipe your credit card and you can walk out the store with anything you want.
But Best Buy, which still has the clout to do something like that fairly easily, probably couldn’t figure out how. It would required too many different vendors.
Instead they rely on a new price matching policy, but those don’t work well unless the store does the price matching instead of waiting for customers to request a lower price. But you know Best Buy isn’t up for a data-intensive task like that. Who would manage it? So it won’t happen.
I’ve asked Best Buy to match competitor prices. The onus is on the customer and the company looks for every chance it can to deny the match, which means losing the sale.
So it’s not that Amazon and Walmart are stealing the business from Best Buy. As far as I can see they are earning the business. And unless there’s a complete corporate change of thinking soon, Best Buy is doomed.
For all Walmart’s vaunted inventory management, I see lots of dusty old tech merchandise on shelves and occasional “sales” of very obsolete items at below-cost to clear inventory. Walmart’s standard prices are very competitive on some tech items, but very noncompetitive on others.Target doesn’t seem to have this problem.
Walmart’s local store managers have more control over what they stock than might generally be assumed. If you’re seeing that same item in all the stores, then someone in Bentonville probably messed up. But if it’s just one store, that’s quite possibly on the store manager. It should also be noted that some parts of a SuperCenter are actually stocked and ‘managed’ by other than Walmart so it’s possible it’s not on them at all.
You are correct!
If you shop at a Wal-Mart in Reno just before Burning Man, they stock up on $88 bikes, PBR and post a sign stating there are no returns on camping gear or bikes purchased a few weeks before and a few weeks after the event.
One of the employees called me out and said he knew I was going to Burning Man because I had a lot of PBR in my shopping cart. He was correct and he gave me his insight on Wal-Mart and Burning Man. The store was really catering to Back to School and a party in the desert.
Ah, but you missed an important Walmart innovation. It is common for the SUPPLIERS to own the inventory in WalMart’s stores. If WalMart owns it, they make sure it moves fast. If the VENDOR owns it, it could be allowed to sit around a bit longer. But if WalMart thinks they can make more money on their shelf space, that vendor could be asked to take back their stuff.
Think about this innovation. The VENDORS own the inventory in WalMart’s stores. There are many obvious advantages to this arrangement. For one, they didn’t pay someone $800 for a $1000 TV whose price may now be $750. This arrangement gives them and their vendors a lot more pricing flexibility. This innovation also means WalMart’s inventory management is VERY GOOD. It has to be good if their vendors are trusting WalMart to manage THEIR assets.
this actually started at the cosmetic counters in department stores. it spread to some upscale brands in the corners. then the glasses and hair stylists came in, owned by chains like Cole Optical and Regis. latest is the in-store clinics, which are two or three chains.
Here’s a thing; 35 years ago I worked in my school holidays at Harrods, the famous London department store. In those days all the departments, sales staff, buyers, inventory, stock control and in-store logistics was owned and controlled by Harrods. Everything was in-house. There was a huge warehouse, half the size of the store itself, connected by a tunnel under the Brompton road. Electric trolleys moved the stock to and fro.
Then Mohammed al Fayed (whose son died in that car with the Princess of Wales) bought it. In a few short years the whole place was turned over to concessions staffed by outside employees. The only part of the store which is now truly “Harrods” is the food hall. The big warehouse has been turned into luxury apartments and sold for millions and Harrods has become a sort of indoor market. Luxury brands in effect rent space in the store and jostle for position on the shop floor with ugly corporate logos. It’s all horrible but I bet it’s four times as profitable as it was in my day.
John, the other side of the story is not so much different. For the factories that sell to Walmart, Walmart doesn’t pay until 3 months after the goods are shipped. If goods aren’t selling well, they’ll return it to the factory for a refund or tell the factory to give a discount. They can do that. It’s in the Walmart contract. What, don’t like it? Good luck finding another customer who will place an order for 10,000,000 units at a time!
IT is definitely not Best Buy’s only problem. You only need to read the stories about them on consumerist.com to see a rather poisonous attitude towards their customers.
The problems at Walmart (and what I have experienced myself) are the standard death spiral. Store sales rate is used to set staffing levels. Manager’s have an incentive to keep it as low as possible. That results in fewer staff to stock the shelves, put things back etc. That leads to lower sales, which further reduces staffing.
The general issue at both BB and Walmart is the management belief that you can cut your way to prosperity, or at least management incentives are aligned that way. The moment that results in discouraged customers, it starts the negative feedback spiral and is incredibly hard to fix by yet more cuts. It is far easier to blame Amazon, the customers, taxes etc.
It’s not just Best Buy that creates the silos within their own corporate structure. I’ve seen other companies internally do the same thing, silo off every part of the company in the same way. Each silo lowers collaboration and communication across the company, so the politics, infighting, and finger pointing start; then product quality degrades and then the whole company starts to suffer (expenses rise, revenue falls). It’s a vicious spiral and can (IMHO) only be broken by managers who are leaders (risk takers) not managers who are promoted by the peter principle or political means. It’s time for new management, but what does it take to get the people who can turn it around in?
Yes! And the “silo” or compartmentalization approach could be at the heart of the recent problems at American Airlines. Even in the publicly announced information there were statements like ‘it was OUR fault.’
Whenever I see a story like this, behind the scenes there is probably a lot of finger pointing and very poor teamwork.
Price Matching policy: “those don’t work well unless the store does the price matching instead of waiting for customers to request a lower price”
Actually, those don’t work at all except somehow make people believe they already have low prices. There are few so loyal who would travel to Best Buy just for the possibility of getting the same price as where they currently are.
Which brings me to my beef with Best Buy: I belong to their Rewards program and even buy things from them when I want them “now” instead of “tomorrow.” The other day, I logged on to the site and discovered I have a ZERO balance. If the points expire so quickly, it makes me much less likely to be loyal.
By the way, our local Best Buy designated some parking spaces as “green” for electric or hybrid cars. I told them that those spaces make me much more likely to call Amazon and have what I want delivered directly to my house in a big ‘ol FedEx truck. I’m not taking the credit, but the spaces were gone within a few months.
I would rather shop at Office Depot for my tech needs than Best Buy – and I do. OK so there’s some stuff that Office Depot don’t carry but in fact I’d rather shop ANYWHERE than Best Buy because the stores are noisy, the tech staff are uninformed and the place is just horrible to visit.
My guess is that Best Buy is hanging on in the hope that the Out-of-State sales tax bill will pass and improve their edge … bad move, it will not help them as far as I’m concerned.
I refuse to shop at Best Buy for two reasons, terrible customer service and terrible prices.
A few years ago, I walked into a Best Buy to buy a 15″ MacBook Pro and noticed that it was priced $10.00 more than at the Apple store a few blocks away. I asked if they would price match and the manager refused. I’m not a cheapskate. If I wanted a super cheap deal, I know there’s vendors selling for less than Apple’s price on the market, but Best Buy was the only one I can think of that sells for more than Apple does for the same product.
Best Buy used to match competitor prices. If you printed out an ad or a Web page from Amazon or a similar retailer, Best Buy would match the price. Not anymore. Instead, they actually complain that customers treat their stores as Amazon showrooms and check out the products at Best Buy, then buy them at Amazon. The irony is that The Good Guys and other competitors complained that Best Buy was doing that to them and it’s one of the reasons Best Buy competitors went out of business.
Since Amazon and Best Buy purchase products from the same suppliers, their prices should be about the same at the wholesale level. The problem is terrible customer service, lack of product knowledge from sales people and higher prices. It should be a no-brainer to capture the customer in-store, match prices, sell them add-ons and warranties at higher prices and profit.
Even if Best Buy matched prices again, their customer service is so bad that I am not sure that would help them gain customers.
One big reason I shop anywhere else is that I am disgusted by the arrogance and self-entitled attitude I have seen over the years at their Emeryville location and I found I could shop elsewhere and not have that problem.
The biggest reason I quit shopping at Best Buy and when I can help it, Frys is one reason, their return policy. They make returns so painful that I always ask myself if I could buy the product elsewhere just in case I need to return the product.
In the case of Frys, they sell products I cannot easily find elsewhere, like wire or mounting brackets for high gain antennas. In the case of Best Buy, I can buy almost everything they sell from Amazon or Costco and both have reasonable return policies.
Odd…my local Best Buy prices their Macs around $100 less than the Apple Store. And they’ll even price match Amazon. And I’ve had that price matching suggested to me by an employee. I guess it depends on the store.
I neither doubt that IT is an issue for Best Buy nor that IT can provide some competitive edge…however, I seriously doubt that’s the core of their turnaround or mess.
Best Buy is simply a poor sales organization in the most basic ways. One doesn’t even get to the inefficient processes or inventory issues before encountering poorly trained sales staff, inadequate customer service (very simple “on the floor” stuff), and non-competitive pricing. The retailer is quite unfocused in terms of product selection, which is far beyond any IT problem (I’m eternally baffled at what buyer there thinks they have a place in the prosumer music market, for example, and product lines in general, beyond their staples, seem to wax and wane with no apparent logic). Service provided by Best Buy also seem both to have varied over time (“GeekSquad will fix any computer/GeekSquad doesn’t fix any non-Best Buy computer”) and in general to have been an after-thought, providing less value add and less trust in the retailer for anything one does not already know about. The primary reason – as far as I can see – to visit Best Buy is purely convenience, if located appropriately to a consumer, for some commodity items one is sure will be stocked.
Best Buy has to first figure out exactly where is it going to play – is it going to be a Frye’s, is it going to be a Big Lots of electronics, or is it going to be a Nordstrom of electronics? Is their mobile business really important to them or not? And so forth. Until then, IT is going to be useless for them. Once they decide, then IT enablers can be discussed.
I certainly don’t know this, but I tend to imagine IT is neither curious nor aggressive because the business strategy is non-existent. That usually kills IT morale and responsiveness, especially as very often in those situations IT gets dumped on as it’s an easy target, as an IT shop in a compass-less organization will often be where the most evidence of drift manifests.
I recently made a few visits to my local BB to check out replacement laptops. I knew in advance that any feature comparison i’d have to do on my own online, and already knew that there was NO WAY I was going to engage a sales rep—about anything. On two such visits the whole store smelled like my old high school gymnasium after they had conducted a wrestling match. Wanting a no-hassle return policy if I needed it (take note, Fry’s) and not wanting to wait two days on Amazon Prime, I eventually made my purchase online for BB store pickup so I could just get in and out ASAP.
On an earlier visit to a Watertown (!) BB to pickup a spare power pack for my now-dead former laptop, my son and I were (mis)informed that “We don’t carry those.” Already knowing the drill by way of previous encounters with such nincompoops, my son led me over to a wall where we quickly identified the required power pack, purchased it and got out ASAP.
Note the use of ASAP twice in this story. The moral is, if you already know what you want from having done your own homework, BB can work for consumers in a pinch. But would I want to structure my business model on carrying all of that inventory for those customers who might be in a “just in case” scenario? I think not!
Price Matching relies on another premise that Best Buy fail to understand. In order for price matching you need to have a reason to prefer that store in the first place. So while every part of the buying process sucks at Best Buy why on earth would I walk in there and ask them to price match anything when I can simply get it somewhere else that I am virtually guaranteed to have a better buying experience.
Do they ever shop at their own stores?!? It is an often slow and frustrating experience with the added headache of fending off the extended warranty hard sell. When I order from newegg.com I am sure I am getting a very low if not the lowest price so there is no need to price match! A few dollars either way does not matter, it’s the ease and speed that are important. I get wider selection with no upsell.
What Best Buy needs to do is build a great website with more selection and then mark which items are available in store. Walmart does this now. When I am browsing if I need something right away I know which items I can go pick up today and which must be shipped, but the odds of them closing a sale with me are high in either case as long as the options are there. Without the options… Well I no longer even THINK of Best Buy and I can’t image a reason I ever would again.
Two points — first, I’m a bit surprised no one has mentioned in the comments the fake website legal trouble BB got in not so many years ago; just search ‘best buy fake website’ and you’ll get plenty of hits. The concept was if you came in, looked at a product and said something like, “hey, that’s $40 cheaper at ” they’d pull up their fake website and point to the fake price, mysteriously higher than BB’s, and rip you off. A second point — what Bob says about the attitudes in their IT shop is spot on. I called on them in the mid-90s and observed even then exactly the incurious and complacent attitude Bob mentioned. I was asked to make some recommendations about the situation in their inventory DBs where they had >100k dead part numbers. What still amazes me to this day is when I’d spent a week analyzing what they had and how they could straighten it out, I couldn’t get anyone to even listen to the diagnosis, never mind take action.
Yes, I’ve not stepped into a BB since the fake website scam, which was utterly outrageous and underscored their complete contempt for customers! Furthermore, whenever anybody I know mentions going to BB, I remind THEM about the fake website scam and that BB thinks so little of their customers they have been proven willing to cheat them. This is far more serious than just corporate incompetence. How many ex-customers are like me who will NEVER shop there and do all that we can to help prevent anyone else from shopping there? I suspect their current woes are more a result of lack of a continuous supply of suckers (otherwise known as previous customers), mountains of word-of-mouth negative advertising against them and less a result of incompetence on their part, although that certainly makes things worse. Heck, look at these comments, nobody has anything good to say about them. I would totally stand up for Fry’s or even Walmart, but BB? No way. The sooner they go out of business the better off their remaining customers will be!
Here is an interesting article about Best Buy’s IT outsourcing:
https://www.weblog.keepthejointrunning.com/?p=4750
Symantec found a Blackhole drive-by on this site for me.
Stay patched and stay away from Java: https://www.sophos.com/en-us/security-news-trends/reports/security-threat-report/html-09.aspx
“However, many computers will continue to be infected by older Java vulnerabilities because they aren’t up to date with the latest patches. The system for patching plugins and third party applications like Java is not nearly as mature as that of Microsoft’s monthly Patch Tuesday process.”
Maybe, but I doubt it. It’s my site. It’s hosted by 1and1, and is plain-vanilla WordPress. I checked the page source and it doesn’t contain the telltales for this exploit.
I’m pretty sure it’s safe. If someone can provide information to the contrary I’d sure appreciate it.
Just used Symantec’s website scanner to verify: It rates http://www.weblog.keepthejointrunning.com as safe.
are the ad services being checked also, Bob? last sneak attack that got by the company’s armies and forcing a reimaging of my PC appeared to be from display advertising on a local (major) newspaper website. I get a lot of trap-and-dump on my screen every day from ad placements.
I live in Best Buy land, too. Why don’t we shop there? Let me count the ways. 1) Selling overpriced warranties with false promises that they will pay when your kid drops the remote for the umpteenth time and then refusing to honor said warranty. 2) Shopping for a tablet pc or iPad one eve blocks from headquarter. The WiFi doesn’t work in the store claims the bored sales guy. 3) Old and dusty inventory at antiquated prices. 4) Stores in Scottsdale which smell like mildew (hard to do in the desert). 5) Final blow- looking up the price on a router and checking to see if it was in inventory at local store. Router in stock at $129 or so. Go to store. Router costs $149 and no one at the store can match their own price. The suggestion is to come back in 45 minutes when they can pull the product from the shelves ala Modern Merchandise in the 1980s and I come back to pickup per internet price. 5) The only reason to go back is if you find gift cards in your sofa and want to use them up. I bought a cord for an iPhone 5 and mistakenly thought I had a $25 credit instead of $20. I brought some candy to use up the remainder. When I found out I didn’t need to buy candy in the store, it took 4 employees, including the manager to get the gift card to accept the new total. They deserve to go out of business.
I thought it was just me. Many years ago we bought a VCR with an extended warranty. Six months before the warranty expired it broke. I took it for service. They kept it three months. (We didn’t watch many movies or maybe we had a backup, I forget.) Finally I went back and asked for it. They gave it to me. It still didn’t work. I took it back. They kept it a long time again. Finally I just gave up. I wish I had read the warranty more carefully because it said if they tried to fix it three times and failed they would give me a new one. I missed it by one time.
Best Buy used to have rack jobbers dealing with their vinyl, cassette, and CD departments. A Major Rackjobber here in the twin cities owned the inventory, rolled the inventory, and pulled the inventory if it didn’t sell. when BB took it over, the timeliness, the turnover, and then the space started to fall away.
they have basically outsourced their Samsung and Apple ministores inside their facilities the same way. eventually BB will become a chipped Macy’s, with everything except one little forlorn corner of mystery stuff being subleased to Sales Associates of whatever brand is hanging from the ceiling over the fixture.
and then at that point, there is no turning back. they are a landlord only. and if the Sales Associates of Coty and Martha… oops… Sansui and Audiosonic don’t get their rate of return, they will move fully online and leave BB in the dust.
Everyone has an LCD tv now.
The BB focus in store has always CLEARLY been on their interests over those of the customer. That should not be so clear to the customer, in a retail setting. The customer should always at least have the illusion that the store is interested in a balanced proposition. When Macs where hard to find and BB sold them, I remember often going into the BB and being steered toward the PC products that the staff preferred, even when I explicitly said I wanted to see the Apple stuff. CompUSA had that same illness, and suffered the same fate BB is seeing on their horizon. Apple stores seem to just flat not care if they make a sale or not, as long as the customer gets their needs met. And somehow, this leads to the highest dollar per square foot success in the land.
To fix the compartmentalization, they should throw out all the individual IT vendors and bring in IBM.
Oh, wait.
if you’re going to level silos, you need hard-asses and bulldozers. for Best Buy, that means hiring some truly competent and flinty-eyed IT guys who will run things, instead of letting things run them. they then lay donw the law, and start taking some key functions back in-house so they can actually define and measure metrics of performance. this will inevitably lead to flattening the landscape by exercising performance clauses to dump contracts of outfits sleepwalking through their paces.
they can’t do it all at once. IMPHO, and I am not an MBA, you start with inventory and your predictive systems. part of that is verification of the inventory, walk the stacks and racks. that is your new database, and then you do a stare and compare to see how hosed up the existing system is.
I’d also get radical in the stores. if it rises like a warehouse, and echoes like a warehouse, then dammit, it’s a warehouse. clear enough space for the forklifts to move, and rack the stuff where everybody can see it. if the suits can’t stand that, drop the ceilings 12 feet and change the feel of the place to higher-end. push all the boxes in back. if they don’t fit, well, you just made a showroom, move the back wall in as well, just like a real store. cart everything except accessories and media up to the registers.
what I’m getting at… they got no clue what they are. decide one way or the other, and hammer on through.
I saw the title of the post and thought that it meant
Amazon isn’t putting Best Buy out of business with its low prices and home delivery, and the reason is Best Buy’s superior IT department keeping the store competitive.
BB does’t even match their own online prices. My son recently purchased a laptop from them after doing a lot of research. We went to the local store that had the unit he wanted and found that the price was $25 more than the online price. When we asked about it, we we told “buy it online then”, which we did.
(as an aside, the RSS feed is working!!!! Did Bob hire new IT staff???)
Price matching never works for *any* business, but especially one with no loyal customers and especially one where the customer has to find the low price. Why would I find a lower price, then spend time dealing with Best Buy just to get the same price? I would buy from the business that offered me the low price to begin with. And likely become a loyal customer eventually, if they made a habit of having the lowest (or nearly lowest) price. Such as Amazon.
Best Buy’s problem is simple. For years they lied to their customers (example, web site prices that magically were higher when you visited the store), failed to carry what the customers wanted, treated customers like $#*^& while in store, employed people who knew absolutely nothing about what they were selling, charged incredibly high prices for “service” to inexperienced customers (a $100 to install an antivirus program???). In other words, they lost the TRUST of their customers. Once lost, trust is nearly impossible to regain. It will take a lot more than just price matching.
“…habit of having the lowest (or nearly lowest) price. Such as Amazon.” Of course you’re correct except for the “Amazon” part. First google for the product you want and check out the price, including shipping and tax, for the hits at the top (excluding the ads, of course). Amazon is often on the list but has the lowest total cost only some of the time. I’ll never forget the time I was looking for “Maxwell House International Coffee” and found the best deal at Drugstore.com of all places.
I think for a lot of people, a few dollars difference doesn’t matter much.
I know that with Amazon I can return my goods easily. They have my credit card information and address etc. If I want to buy something, it takes a few seconds to buy. It’s just not worth my time to hunt around on other websites, and enter in all those details, find out the shipping cost, etc, for the sake of a few dollars.
Yes. Each person has to make a judgment call as to what activities are worth their time. But once we learn how to do something, we are more likely to find it worth the trouble to do.
It is amazing to read all of the negative comments about BestBuy here, as a Canadian our BestBuy stores seem to be rather well run compared to the impression I’m getting in the comments here about the American stores. I’d say that they aren’t perfect (who is?) but they generally have a good selection of what I’m shopping for at a price that is competitive or better than a competitor’s when matched and beat by 10%.
BestBuy bought the Canadian tech retailer Future Shop a few years ago and they still run both – perhaps they are using Future Shop’s IT systems and people to run the Canadian operation, which may be the reason behind the profoundly different experience I see between the Canadian and American BestBuy experience.
I used to be a reasonable Best Buy customer – I’d always at least visit one before purchasing a new piece of kit, from a TV to a hard drive. I spent around $3-5k a year there easy.
However, in the last 3 years, I buy 95% of everything from Amazon. The other 5% we buy from Frye’s which for us is a 30 minute drive away. There are 3 best Buys between us and that store.
The reasons are simple:
1: Amazon have gotten a lot better at stocking things I’m likely to buy. I need camera equipment, editing kit, hard drives, monitors etc? Amazon are VERY likely now to have it in stock. It arrives within a day or two, and in my time-precious work environment, I just saved about 2 hours of real time.
2: Best Buy don’t really seem interested in me, a person who spends around $20k a year on electronics and cameras. One of the biggest retail booms of the last 5 years has been in DSLRs for example. Even grandmas buy them now. Best Buy have shallow stock in that area, zero knowledgeable staff, and stocks almost no decent accessories. This extends to almost every area of stock. Shallow selection, ZERO knowledge.
3. We bought ourselves a 55″ state of the art connected TV as a family Xmas present. We went to Frye’s. HUGE selection, salespeople who actually knew the difference between LCD and OLED. Cheapest price. Who has time for price matching? You seriously want me to bring in evidence so we can argue about it? This is a $1500 TV, not a $30k car. I’ve already done my research. I want to walk in, check that it looks nice, and buy. I know haggling and coupon cutting turns some people on. Not me.
Best Buy obviously needs better systems. It also needs better staff. Neither are happening in my lifetime.
It also needs a point.
My ten cents: dump everything but phones and transportable electronics (tablets,etc). Look for smaller, mall based locations, dump the superstores. Shrink from a bloated almost dead whale to a smaller, nimble, sharper company. RadioShack already saw the writing on that wall (i’m always amused that the RS in Malibu survives).
In the UK, there are many third-party phone chains that do well. Best Buy could be a successful brand in that space.
This is one of several very important comments on this column. I sincerely hope someone in BestBuy’s executive team is reading these. Over the last several years I have had similar experiences. So have many others. About 10 years ago 80% of our Christmas shopping was done at BestBuy. For the last 3 years it has been ZERO. There are reasons for this — product selection, price, service, … I still try to shop there. I don’t find what I wanted, or its too expensive, or…. As I am walking out of the store empty handed I ask myself “why did I even bother?”
There is a bigger problem though. I have had these discussions with store managers, with district managers, and I’ve even written a few of BestBuy’s execs. I’ve tried to offer suggestions and constructive feedback. Truthfully it has been like talking to a wall. Each time I ask myself “why did I even bother?”
The most important source of information for any business comes from its customers. How they spend their money is a clear and powerful form of feedback. When you’ve clearly ignored your customers and they have voted by taking their business elsewhere — should that not be enough to wake up the company?
Anyone can cut costs. However when you lose your customers and your revenue, no amount of cost cutting will save you. Your first priority must always be your customer. Without their business you have nothing.
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this. i’ll be subscribing your rss feed so i don’t miss the good things!
again, terrific blog remember to keep this up! Please excuse me if my english is not good.
Once upon a time I liked Best Buy and came the day I tried to return a printer that did not work with my machine. The original packaging clearly stated it was PC and Mac compatible. Except it wasn’t.
The tech took it and printed a sheet to show me how well it printed on PC. I asked him if he tested on a Mac. I pointed out the package statement and said I use Mac. He was furious, but when he threatened me I talked to the manager.who was none too happy. I upgraded the printer to a different model and never went back. That was probably 10 years ago.
Best Buy suffers from arrogance, poorly trained employees, and poorly manufactured products. BB managed to dig a deep hole that will take a long time to climb out of, and even longer to repair customer relations. I wish BB well, but I don’t really hold any high expectations for change.
This article’s closing paragraphs about price matching perfectly describe my negative experience with Best Buy. I once called them up on the phone asking them to price match an item. I very clearly gave them the specific name of the item. They kept transferring me to this and that person only to finally matched the price…..on the WRONG ITEM. I found this out when I showed up at the store and saw that the specs weren’t even the same. What a waste of time! BB has poor inventory management for sure.
Best Buy owns and runs mindShift, a data center outsourcing firm with over $100M of revenues. So if it is outsourcing servers to a different firm, it’s probably outsourcing much of that stuff to mindShift.
Best Buy owns and runs mindShift, a data center outsourcing firm (called an msp, managed service provider) with over $100M of revenues. So if it is outsourcing servers to a different firm, it’s probably outsourcing much of that stuff to mindShift.
A couple of years ago, I attempted to purchase a GPS as a Christmas present via the on-line store. The item was on back order — weeks went by, I called them
(bestbuy.com) they keep saying it was due in buy the following week, after a while it degraded into ……. had the item been discontinued, would they ever get it in? — NO CLUE. Tried to sell me another one. “Don’t you know if an item on backorder had just been taken off inventory, or the status would change?” NO CLUE. Tried to sell me another one.
I went into the store in about a week where they (the bricks and mortar store) acted like bestbuy.com was not even in the same company. In the end I had to go back home, get on line to cancel the order, then go back to the store and spend an added $40 to get an item off the floor. Yep the will have earned their extinction.
I once purchased a dryer from best buy. Although the store was only a few miles from my apartment in Houston, the dryer had to be shipped from Dallas. I went round and round and round with the shipping company for weeks expecting delivery, several phone calls. I only got the dryer when I threatened to go back to Best Buy and complain vociferously, or cancel the delivery out right. Before that it just seemed to be a game.
I was greatly disappointed that the company had chosen such a poor delivery service, and didn’t even manage the delivery process. But from reading this article it seems I should not have been.
Any company that sells $2 cables for $20 does not deserve to be in business…
I think there is a trend in a few of these columns…
In Bob’s book he says: “There is a business axiom that management gurus spout and that bigshot industrialists repeat to themselves as a mantra if they want to sleep well at night. The axiom says that when a business grows past $1 billion in annual sales, it becomes too large for any one individual to have a significant impact. Alas, this is not true when it’s a $1 billion high-tech business, where too often the critical path goes right through the head of one particular programmer or engineer or even through the head of a well-meaning clerk down in the shipping department. Remember that Intel was already a $1 billion company when it was brought to its knees by desk dust.”
American Airlines and BestBuy have been brought to their knees by IT. In many companies IT has become as valued as a receiving clerk in a warehouse, maybe less. Firms have found the cheapest possible workers for IT jobs and constrained them to a very narrow set of job responsibilities. Their input is neither wanted or welcome by the company.
The great companies are the ones on top of their game. They have a robust management system that is constantly improving efficiency and effectiveness. They manage their money well. They are constantly developing new products and services, and are expanding their markets. They have access to the information needed to run their business well and they use it. When you go cheap on IT you endanger one of the important things you need to run your business well — information.
I was working at Blockbuster Corporate when they filed for bankruptcy back in 2010. Our CEO at the time when he first came on board had what I thought was a pretty good idea. Install media kiosks in the stores so people could download movies onto their device for rent or purchase for a fee. However, executing that idea was impossible when even if the content owners (movie studios for film, record labels for music) would allow a license, either their content was priced so high as to make it uneconomical or the cost of making sure their content and the machines themselves were safe from piracy killed your margins. Content owners kill the on demand purchase of media outside of your home network and that makes the Best Buys of the world less competitive.
Best Buy recently changed their return policy to only 15 days. I recently bought a product that died after about 20 days, the store won’t accept a return, the manufacturer tells me I have to return it to the store because its less than 30 days.
I can’t find another retailer that has such a bad return policy. When their customer find this out, I expect that they will lose more customers than they will save in returns.
Microsoft has this problem too. They’ve outsourced two-thirds of their IT department to the lowest cost vendor companies they can find. Which means that the vendor employees’ pay and benefits are crap, which means that there’s high turnover, especially for the best employees who know they’re worth more than what they’re getting paid. The vendor contract, and the vendor and FTE managers enforcing said contract, impose all kinds of rules and metrics that end up impeding the vendor employees’ productivity with no measureable benefit to clients requesting support, and in some cases to the direct detriment of clients. The core of the problem is with senior management, though – they’ve defined IT as a “cost center”, and so they refuse to invest in IT. I don’t blame the CIO, who I’ve heard is fighting for more investment. The problem is higher up the chain from him.
I know when something like BB is at death’s door. When an article on its subject no longer interests. I wondr how many skipped this article or started to read then asked themselves, “Why bother?”
This. The exact phenomenon that happens at any sufficiently large IT shop is exacerbated at BBY due to the number of fiefdoms they’ve created… had some major flashbacks reading this article…
Background: I was on an upgrade project for over a year there as a subject matter expert for a major vendor for bby.com (guess which?) whose only real job was to be present to explain how the software was supposed to work (whether or not they wanted to run it that way, which they usually didn’t). We had a development shop we were working with, which became one of maybe 10 teams involved in a $15M project, and of course once we got in there we became just yet another fiefdom.
We were going along just fine with our development, when the first code drop ran smack into a wall in the form of the outsourced team that held the keys to the release process — an incredibly antiquated source control system with a bunch of hand-drawn scripts, no branching or merge tracking, no outside access for non-captive vendors… etc. And they’re not letting our guys in because they don’t trust them not to do the jobs they’ve been hired to do. Go figure, “not invented here”…
We take this up with the senior project manager and present a few other options — Git, Mercurial, freaking SVN…all with traceability back to the original developer and support for multiple branching, cross-functional merging, bug tracking, all very clean. Spent about 2 weeks on it. So he calls a meeting to discuss, invites the entire other team and… calls a fucking vote. (Had I but known, I’d have had everyone on site that week…) So now we are stuck with a terrible 15-year-old SCM, I have 20 developers idling, and we are behind by the 2 weeks we tried to fix the source control.
Fuck it, I say, I can translate their local SVN repository history into the format that evil SI’s crappy tool requires. Check out SVN-diff’s from start to finish, trim out non-material changes, create a ZIP and send it over to the old beast of a commit server. Works great. Except suddenly I become responsible for ALL cross-team development coordination and that means I have to triage every single defect, take calls with offshore at 6AM, etc etc… FML. It was about this time I wrote a 10-paragraph missive back to my boss about how fucked up the whole vendor ecosystem was at Best Buy Tech Group.
Eventually… Well, it was painful, but we got our upgrade done. My refusal to play politics actually helped my career somewhat, because I was just focused on getting a solution everyone could work with. But I can say with 100% confidence that the culture created by their practice of shucking responsibility for their own IT has played a major role in their downfall.
Getting rid of more CD’s and DVD’s, and adding a kiosk to burn crap copies (probably without special features and packaging) would drive me further away from Best Buy.
Another issue I’ve been having with my local Best Buy – when I go in to buy something, the last thing I need is to be hassled by an outside vendor. Best Buy (and other stores) have started to allow Dish Network to set up shop in the store, and their salesman will target anyone that even looks sideways at a DVD. Now if this meant I got lower prices for allowing this third-party to disrupt my shopping experience, maybe I wouldn’t be so openly hostile towards them… but we all know that will never happen. I actually stopped shopping at Best Buy for about 8 months after a particularly pushy Dish rep wouldn’t take no for an answer.
I’ll bet people born and raised in New York City would have no problem ignoring pushy vendors.
Best Buy was great but the future is for the oters.
Your comment “Their web site wasn’t very good but you know they didn’t care because making the online experience better might keep customers shopping at home”
– particularly the not caring part is completely bogus. I worked at corporate until a little over a year ago and while upper management was unimpressive, and *IT* (hardward, laptops, networking) wasn’t good at all..
The developers, designers and people working on the BBY site were very engaged, even passionate about improving the site. Some of them were ‘milk toast’ to use a friends term, but others were actually excellent in their respective areas, and pushing the envelope and their superiors has hard as possible for the improvements that were needed.
I’ve also seen marked improvement in the site over the last year. Not nearly as much as I’d hoped for, but the change that’s happened has been good, (and given what I know of their systems, impressive).
Your cat-calling about this was relevant a year ago, but it’s getting tiresome. Your ‘in’ has expired.
You cant even purchase anything from BB, you order then you get an email saying your order was cancelled because we can not verify your information. I’ve tried 9 times this week to order something. Customer service has no clue why the orders are canceling… but I’ve learned its just not my order but many many more people also. I received my monthly statement in my email and replied, sorry I can not verify your information
[…] is killing retail in general. Amazon’s kicking around Barnes & Noble. Amazon is killing Best Buy, though one could reasonably argue that Best Buy is so poorly managed the chain is already a dead […]