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Wednesday, April 18, 2012
The Coming Death of Best Buy
"MINNEAPOLIS — Faced with a stubborn slide in sales at its U.S. stores, Best Buy on Thursday announced its steepest round of cuts: closing 50 big-box stores and eliminating 400 positions at its corporate headquarters in Richfield, Minn. Officials did not reveal which stores are on the chopping block.
The company also didn't disclose how many store employees would lose their jobs, but the number probably will be in the thousands because each store employs roughly 100 workers.
Best Buy, once known as the undisputed discount king of consumer electronics, has been struggling to find its place in a world dominated by flashy high-end brand temples like Apple Stores and low-cost Internet retailers like Amazon. Customers have been increasingly migrating online where they often find better deals, forcing Best Buy to figure out a reason shoppers would need to visit an actual store.
Last year, Best Buy lost a staggering $1.2 billion as it deeply discounted merchandise to keep pace with rivals Amazon and Wal-Mart."
Don't underestimate my knowledge of retail (say it in a Darth Vader voice please); I saw this coming and I posted it back when Circuit City shut it's doors, and I even predicted that.
Wake up retailers-- you need to train your staff to understand one important component above all others (and this used to be posted in my office when I would run a store):
A CUSTOMER IS NOT AN INTERRUPTION OF YOUR WORK, THEY ARE THE REASON FOR IT.
There is far too much competition and if you can't offer the best price then you better sure as hell offer the best service.
Whole Foods is a terrific example of this, they create a fun and exciting atmosphere to shop in, they have started to offer a line of store brand generics for cost-concious shoppers but they drop the ball with their cashiers-- some of them are outstanding-- and even the worst cashier at Whole Foods crushes the best cashier at Wal*Mart or Price Chopper where employees there seem to have the sentiment that they are serving out some kind of court-ordered service-- on more than one occasion I've had a weak interaction with a cashier, or the cashier is chatting with the bagger and ignoring me (a fire-able offense in my store).
But BEST BUY pulls off an Amazing Trick-- they are a store FULL of what I like to buy and I don't like going there. How do they manage that?
Like the signs of terminal disease they have all the symptoms.
1. Never enough registers open. A 3 minute wait in line is not acceptable when I'm going to get to the checkout and the cashier struggles with her machine and then tries to sell me a warranty, and then I have to swipe my card and wait for it to get approved. What's an acceptable wait in line? Zero minutes.
You heard me, and I used to drive my front end managers crazy-- I want the customer in front of you to be wrapping up as you walk up to the register. I want the cashier to greet you with eye contact and ask you how your shopping trip was and MOST importantly if there was a problem they are to page a manager immediately and that manager had better respond. The cashiers are the front line and can change the whole shopping experience from bad to good-- and yes they can do the opposite as well.
2. Cashiers not trained for problems. I LOVE the new Wal*Mart commercial where they show a happy middle aged woman as a cashier who tells the shopper she can correct any problem right at her register-- I'd love to see the Wal*Mart where they have these cashiers. The ones I deal with seem unable to master English or the numerical system never mind be able to help me with a problem. A recent trip (my fault for going in the first place) I asked if she knew if they carried carpet cleaners to rent and she looked at me and shrugged. Now that should be the commercial with a voice over saying GOOD LUCK.
3. Music too loud. I don't care how high those car stereos can blast-- music needs to be a background component in any retail store it should never be offensive or unpleasant (Carly Simon will drive me out of a store just as fast as Kid Rock will), and as a matter of fact it should be barely noticeable. Don't give your customers a reason to leave.
4. Product out of stock, or Product that requires a clerk to check it's status for you which means now you have to wait to find a clerk who can check that status and then after you've waited 15 minutes you find out they don't even have it. The only acceptable response to an item being out of stock is "We can offer you a substitution" otherwise don't be out of stock. As my mom once said, "You can't wash your clothes with a raincheck!" Rain-check's put Caldor out of business.
There's more, but I've gone on long enough. Best Buy may not be closing tomorrow (unless you're one of the fifty) but if I were working there I'd have my resume updated.
Read more here: http://www.kentucky.com/2012/04/02/2135926/best-buy-to-close-50-stores-as.html#storylink=cpy