Best Buy is closing fifty stores to try to stay in business. But even a few years ago, I could see they were in trouble. Want to hear why, Best Buy?
Just this week, I stopped in one of your stores to check out your Blu-ray sales. I wasn’t even into the second aisle before a non-Best-Buy-employee stopped me to ask me how I was doing, and what was I doing for cable?
Step one right there. Get rid of the salesmen. Seriously, they’re selling overpriced services to YOUR customers, and giving you a small kickback. No one shopping at any place should ever be bothered by other people’s salesmen, especially when they’re there to spend money on YOUR products. Sure, you may get $50 if I were to sign up for satellite TV, but if that means $50 per month that I spend elsewhere instead of at your store, then you’re really losing money, aren’t you?
Step two, stock what I want. I really only shop at Best Buy for Blu-rays anymore. Selections for music and video games have become very similar to stores like Wal-mart and Target. Selections for everything else (electronics, computers, accessories) is handily beat by the Frys Electronics in my area. Even then, I can generally find things cheaper with stores like Amazon.
Step three, realize your remaining strength. Amazon can beat you in inventory, selection and price. But there’s one area that they can’t beat you in: impulse. If I order something off Amazon, or have it shipped to store with you or Wal-mart or anyone else, that’s two days where I will be waiting for my product. If it costs only about 5% more to pick it up right in the store, I’ll go for the store option. But walking around your store, there’s so little there for me to want to buy.
Invest in your stores. You have so much wasted space that isn’t filled by product. Stop giving it to the pushy satellite guys and cell phone people, and put in stuff that is money in the pocket for Best Buy. If you’re not winning in a particular range of products, learn from Borders and get rid of it. You have an online site that can just as easily sell these items at a reduced rate, if possible, or just give up on them entirely.
Add to this the fact that you need to start offering reduced rates on products more often than an occasional sale. I’ve picked up quite a few discs while at your store, but knew that I could get them $10-$15 cheaper at Amazon every day. Again, impulse, I’m looking just at the products on sale. If they’re in that range, I’ll buy them while in store. If there’s only one or two discs out of nearly one thousand titles you stock each week, then you’re getting such a small amount of my spending money each week. Have more permanent sales, persistent discounts, even “buy two, get one free” ongoing sales. That’ll make shopping with you much more attractive.
But to stay afloat, you have to realize that these problems exist, and move to correct them. If you continue to shrink while still pushing the same business model, then you’ll be a forgotten piece of commercial history, just like Borders.