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What is the future for Best Buy?

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January 10, 2012 by Benji


What is the future for Best Buy? There has been lot of buzz on this subject recently.  Do they have a customer service issue or do they have a P&L issue? In the last 6 months Best Buy made three large announcements.

1)      They are reducing their store size from 46,000 square feet to 35,000
2)      They are closing their 11 UK stores
3)      Oops, we messed up and are not fulfilling a large number of Christmas orders

Larry Downs recently wrote a scathing article in Forbes; in a nutshell:  Best Buy was its own worst enemy & Amazon has it right because they don’t make mistakes. He also cited an awful customer service situation with an obviously new sales rep at a BB store. Larry is not alone. I commented on a friend’s facebook status when he posted a link to the article saying that BB is planning to reduce their store size by roughly 10,000 sf & tighten their belts to become more profitable.  This was a response from another friend: “It’s not 10,000 square feet they need to get rid of, it’s their culture of horrid service & archaic policies. But bean counters & those focused only on next quarter rarely understand such things.”

Guys, I’m sorry you had a bad experience at BB. I’ve never had a negative experience there. They have a good return policy, their employees know their technology or know which direction to point me in. Yes, they try to cross sell me products, but I’m a consumer, they are a retailer ITS THEIR JOB. Amazon suggests other products. Larry, your email seems more like a personal distaste for Best Buy than a Forbes worthy article.  I now realize your complaints about Best Buy are all human factor issues. A person didn’t treat you right or speak to you nicely.

Amazon.com doesn’t have human interactions. They are a well-built website that operates with no personality. But I’m a fan of brick & mortar stores. I like being able to see and feel something before I buy it. I like talking to people, getting opinions and sometimes even talking to other shoppers in the store (yes, I’m that annoying guy). This may cost me a “noob sales guy interaction”… I’m ok with that. I actually thought there was a little “yuck factor” with Amazon.com recent marketing move to get people to go into retail stores, scan the bar code with their app, to get a $5 discount when ordering it online.

But we are getting pretty far off topic. The question is will Best Buy survive. Here is what I do know; Customer Service is a Major factor in a corporation being able to survive. Whether or not BB has a customer service problem, if they have a perceived problem, then they need to work on it!

It is difficult for some companies to tighten their belts, trim the fat and cut what needs to be cut. If done properly, it can be a game saver for a company. The Big Three did it in Detroit recently, and after years of losing money, all three car companies in Detroit published profitability in 2011. Best Buy is trying at the very least.

Will they be successful? Will their customer service issues (or perceived issues) be fixed? Will they fix the Christmas debacle? Will they trim down enough? Sell enough? Net enough? I don’t have the answers to that. But I do hope they work this out. I would love to hear your thoughts.

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