Technologizer

Big Surprise: The World Has More Best Buy Stores than It Needs

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Consumers peruse the offerings at a Best Buy store in Emeryville, California.

Best Buy, the company that dominates consumer-electronics retailing in the U.S., isn’t doing so well at the moment. As CNET’s Larry Dignan writes, it reported a $1.7 billion loss for its fourth quarter, and is responding with a bunch of changes in its business model:

  • It’s shuttering 50 of its big-box stores — the cavernous locations you think of when you think of Best Buy.
  • It’s opening 100 new Best Buy Mobile stores — the small shops inside malls that focus on phones and related products.
  • It’s going to compensate staffers based on the quality of their customer service — which makes me wonder what they’ve been judged on up until now.
  • It’s going to try to boost online revenue by 15%.

Reading Best Buy’s bad news made me think back to a January blog post at Forbes.com, by Larry Downes. It had the provocative title “Why Best Buy is Going Out of Business … Gradually” and made the case that the shopping experience at Best Buy stores was so crummy that it could kill the company.

At the time, I thought that was an alarmist stance. But with the company thinning its herd of big-box locations, it’s not unthinkable that it’s begun a Circuit City–like decline and fall. (In 2001, Circuit City was doing so well that it was one of the role models featured in James Collins’ business best seller Good to Great; in 2009, it died.)

Being better than Circuit City, which is what Best Buy was during its boom years, wasn’t all that tough. Today, however, Best Buy’s principal rival is surely Amazon.com. That company doesn’t have to pay rent on hundreds of massive stores and staff them with salespeople, so its prices are low, low, low. It’s become so hyperefficient that it can have the goods on your doorstep less than 24 hours after you ordered them. And it even has an app that helps you do your product research in person at a retailer and then buy from Amazon, which doesn’t seem very sporting to me.

Then there’s the Apple Store, a chain of brick-and-mortar stores that are pretty much the precise opposite of Best Buy: very few products and lots of advice provided by staffers who actually know what they’re talking about.

Apple has all sorts of advantages when it comes to making shopping more pleasant, of course — it’s certainly easier to do it when you make most of the products you sell. But the Microsoft Store shows that it’s possible to sell Best Buy–type products in an environment that has at least some of the Apple Store’s humane feel.

Me, I’m not a Best Buy hater. As big-box merchants go, it’s tolerable. Usually. But my experiences at its stores lately have been getting worse, not better. I recently tried to buy a set of headphones and went through such an excruciating, demeaning hard sell for an extended warranty at checkout that I complained to the manager — and then put the headphones back on the shelf, went home and ordered them from Amazon.

I also used BestBuy.com to order a product for in-store purchase — and then went to the store and waited for 20 minutes, only to be told, offhandedly, that it wasn’t really in stock after all. That was a while ago, but the experience was so dismal that I haven’t tried my luck again.

Is Best Buy fixable? Maybe. It’s not impossible to inject new life into a tired old retail giant. (That’s what former Apple Store boss Ron Johnson is trying to do with JCPenney.)

Wouldn’t America’s largest electronics merchant be far more appealing if it did the following?

  • Matched Amazon’s prices, or came close enough that it doesn’t matter.
  • In particular, avoided gouging customers when it comes to cables, power adapters and other accessories.
  • Focused on selling good, solid electronics products in the most important categories (I don’t understand why waiting in line at a Best Buy checkout requires you to snake through a mini-mall of Snuggies, Hello Kitty–related gizmos and snack foods).
  • Made it possible to get hands-on experience with every product in the store — which is hard to do if an item is turned off or busted.
  • Made sure that sales people knew their stuff and that they were helping customers rather than hanging out with one another.
  • Asked about an extended warranty once. Then stopped.
  • Did everything possible to let shoppers zip in and out of the store as quickly as possible. (Is it completely unthinkable that Best Buy could offer an Apple Store–like self-checkout app?)
  • Revamped its website so it felt less like a virtual Best Buy big box and more like Amazon.com, except focused on electronics.

A Best Buy that did all that would live up to its name. Its future could be bright. I’d shop there. Wouldn’t you?

MORE: I Visited My Local Microsoft Store Recently — and Liked It.

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