Good Bye Best Buy
Best Buy has been dead to me for years, and I feel really bad about it.
I bought a new TV on this last Black Friday from Best Buy. It was an exceptional deal. They had advertised it in advance so I had time to plot my strategy. I hit a few other online sites and Costco and none could come close to matching the deal. I went to Best Buy on Wednesday night (before Thanksgiving) to see the unit in question… it wasn’t on display and no one there new anything about it.
Outside the store, people were already lining up to camp-out. The store would be closing soon, and be closed all day on Thanksgiving, opening at Midnight Friday morning. The campers had about 32 hours to go. I didn’t need to camp. The TV I wanted would be available online during Thanksgiving day. No camping, no crowds, and a great deal. I bought the TV in a few clicks, got free delivery, and went back to my feast wondering how Best Buy could stay in business.
Evidently, I wasn’t alone. This month, Forbes ran a feature called Why Best Buy is Going out of Business… Gradually by Larry Downess. The article talks about the pressure from online retailers, but puts the majority of the blame on management. I’d say its more 50-50. Retailers have it tough – limited floor space, expensive locations, expensive labor, and a tax disadvantage are pretty tough obstacles. They are expected to provide a great local experience, yet it isn’t uncommon for customers to evaluate in-store products only to buy items online elsewhere.
It puts the retailers in a very difficult position as they have to compete as a local retailer and an online retailer. My TV experience above was effectively an online sale. I bought it sight unseen at a low price – no sales assistance. But had I bought it at Amazon, it would have had reviews, shipment tracking, and a better return policy. Also, more incentive to buy other items since I was getting free shipping already. Best Buy had hoped I would by a mounting kit and/or installation assistance, but I didn’t.
The Forbes article hits the issue that Best Buy failed to deliver product in time for Christmas as promised and offered a weak aplology – unacceptable behavior.
But Best Buy is not alone in its stuggle to survive- CompUSA, Circuit City, and local retailer Ultimate Electronics are also all gone – was it all because of bad service and management? I don’t think so – we are moving to an online econony and the retailers are struggling – outside of consumer electronics there’s Sears, Borders, and many more.
The fact is we do need local retail and we will lament the day Best Buy is gone – if nothing else it keeps Amazon honest.
I’ve noticed Costco does a good job of skirting the issue – Costco somehow gets exclusive model numbers with minor nuances that make comparison shopping harder. Costco also offers a better warranty and return policy as well as rebates to their AMEX customers.
I was an early adopter of Internet sales. I remember telling people about buying books on Amazon was preferable to … oh Borders. When I remodeled my house I bought the vast majority of the building supplies online – rock siding, bathroom fans, appliances, even closets. I saved a fortune in product and tax.
But today I am more concerned about retail. I see the empty malls, the sales tax shortfall damages, the higher unemployment, and the loss of competition. I cancelled my Amazon Prime, but it won’t be enough to save Best Buy or retail. In fact, I think I will go take a photo of the local mall for my grandchildren – I’ll tell them it was a Kodak Moment.