Best Buy Closing 50 Stores

An anonymous reader tips news that electronics retailer Best Buy will be closing 50 of its big-box stores across the U.S. this year, and laying off hundreds of corporate workers besides. The company plans to start testing new types of outlets as it tries to adapt to the changing face of retail sales. From the article: "Best Buy shares were off 7.7% at $24.56 on Thursday afternoon on the New York Stock Exchange. Also Thursday, Best Buy reported a $1.7 billion loss for its fourth quarter ended March 3. ... Consumers armed with mobile phones are increasingly using stores as showrooms to check out merchandise they later purchase for less online, a trend greatly benefiting Internet retailers such as Amazon.com Inc. that aren't encumbered by the costs of running physical locations and in many cases don't have to collect sales tax. Meanwhile Apple Inc.'s phones and tablets, showcased in its own namesake stores, have eroded the status of specialty chains as the one-stop shop for the latest in gadgetry. In response, Best Buy said it will launch large-scale tests of what it calls new 'connected store' formats in the Twin Cities of Minneapolis and St. Paul, Minn., as well as San Antonio. The stores, which will emphasize services such as technology support and wireless connections, will feature large new hubs at their center to assist shoppers, as well as reconfigured checkout lanes and new areas to accelerate the pickup of items purchased earlier online."

Re:Good

[Anonymous Coward]

For what it is worth, Best Buy does have a high value for me as a showroom. And for when I absolutely have to have something that day.

Re:One of the first times on /.

[tooyoung]

I assume this is your first visit.

Re:Good

[suso]

For what it is worth, Best Buy does have a high value for me as a showroom.

Which no doubt is one of the reasons it is failing. People going to the store to look, then going online to buy. Of course, in the 80s, this is how big box stores got their business. People would go to the small locally owned TV/electronics retailers to get the spiel, but then go for the lower prices at the big box stores. It sucks to be on the other end doesn't it Best Buy?

Re:Good

[Korin43]

And for when I absolutely have to have something that day.

I used to feel that way.. until the day they tried to sell me a discount video card for $120, and then I went home and got it online, with overnight shipping for about $30. Similar story for hard drives or any kind of cable (they tried to sell me a SATA cable for $30 -- they're literally $1 online). Having things today is nice, but I can wait 24 hours for that kind of discount.

Last Mile Problem

[Tassach]

This is how Sleep Number stores operate. They have no inventory in the showroom besides the samples. They take your order and your merchandise gets shipped to you.

This is efficient, but still has room for improvement - the big cost is last-mile delivery. It's relatively inexpensive to ship a tractor-trailer full of goods from a regional depot to a store. Doing door-to-door delivery is substantially more expensive. Best Buy already has the pieces in place to solve this -- a fleet of trucks, depots, and local distribution points, as well as the web infrastructure to order online and pick your purchase up at the store. Going to smaller, showroom-and-pickup stores would save them a fortune.

Re:Good

[houstonbofh]

It couldn't be how every time I go into a Best Buy it is a horrible experience. It couldn't be how any time you ask one of the minimum wage sales people a question about a product, the answer is, "I don't know, but would you like an extended warranty?" It couldn't be that to make up for the loss leaders they price other things through the roof. Just Google "Why best buy deserves to fail" and you will see I am not alone. My two favourites are http://www.forbes.com/sites/larrydownes/2012/01/02/why-best-buy-is-going-out-of-business-gradually/ [forbes.com] and http://www.jrdeputyaccountant.com/2012/02/why-best-buy-deserves-to-die-horrible.html [jrdeputyaccountant.com] personally.

Re:Good

[Anonymous Coward]

CompUSA didn't fail, Carlos Slim (the then private owner [tmcnet.com]) wanted to liquidate because it wasn't improving as fast as he would have liked. In retrospect, it may have been a good choice since he's now the richest guy in the world [therichest.org].

Re:Good

[gumbi west]

For me it was the time I went there to buy a monitor and walked out when someone wasn't at the front checking receipts, so a guy comes tearing down hallway outside the store (in a mall), yelling at me to stop, grabs the monitor and holds on, demanding to see a receipt. I told him to get his hands of my stuff. He threatened to call the cops. I told him that I would like that so he would get his hands off my stuff. He then took said he would let go if I showed him my receipt. I agreed, but will never go back.

Re:Good

[robot256]

More times than not in recent memory whenever I go to a physical store to get something besides routine groceries, I come away empty-handed. Why? Either they don't stock what I want, or it's too expensive, or I just couldn't find it in the damn mess. My time is worth more than that, so online shopping wins hands-down. MicroCenter because a whole lot more attractive when they added "order online, pick up in store" because you could get it the same day but let their staff do the work of digging out from behind whatever shelf it fell last week.

Showrooming has a cure: Service and Expertise

[wanderfowl]

I recently found myself in the market for a digital piano. I went to my local (actually local) piano store and checked what they had (wanting to feel the keys more than anything else), and fell in love with a particular model. They had it for $699. I went online and found an online retailer who had it for $499 ($20 shipping) in a special sale. As this is an actual local store, with actual local owners, I called the owner up and explained the price I had found (with a printout ready, which he didn't even demand).

Although he said he couldn't match that price without taking a loss, he immediately offered to knock $100 off his price, and to take my old model on consignment. In addition, he offered some great advice about stands, offered to deliver it for free. He also explained that he wanted me to be happy with it, so I shouldn't hesitate to return it if I had any problems with it. So, I went with the local guys, and picked it up (and the owner even stayed around 15 minutes after closing to seal the deal that very day).

All told, I probably ended up paying around $100 extra to stay local. But with the return policy being humane, the service incredible, and with actual expertise on the accessories needed, I still feel good about it, and feel it was money well spent. Had I demoed the unit at Best Buy and they'd had such a high price, I likely would've ordered online without a second thought, as I know they have a crappy return policy, no expertise, and no service to speak of.

Retailers need to know that price is not the sole factor that drives people towards (or away from) online retailers. Showrooming isn't all about price. With the piano, I paid the extra money for service and expertise (and to support that service and expertise being available in the future), online didn't just win instantly because of price. Lower prices aren't the reason I use Best Buy (and their ilk) as a showroom. Crappy service, pushy sales, and bad policies are the reason I showroom. Prices are just the excuse.