Best Buy is Gradually Going out of Business: Forbes

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A Forbes story Monday gives Best Buy a few more years before it goes out of business.

Best Buy logoCompetition with Amazon and also Apple Stores and the failure of 3D to take off is only part of the reason.  For the most part, Best Buy’s demise is its own fault, claims Forbes contributor Larry Downes.

Despite the exit of Circuit City as a competitor, Best Buy is losing marketing share.  Its stock has lost 40 percent of its worth.  Analysts give it a rating of B-.

Forbes’ biggest complaint is with the shopping experience at Best Buy.  Clerks are unhelpful. Returns are limited. The in-store pick up of merchandise ordered over the web doesn’t always work smoothly.

Contrast this to the Amazon experience:

“Amazon lives and breathes the customer’s point-of-view. It completely engineers its business practices, its systems, and its people to support it. When they make a mistake, they admit it and they fix it. Immediately…It’s not just Amazon’s prices that are better, in other words.  Its customer service is superior in every way… Phone support is instant, responsive, and knowledgeable.  Returns are simple…”

The article is an excellent cautionary tale for every retailer.  In a nutshell, the blog states that consumers want to shop on the web, so brick and mortar stores must find a way to include the web in the service they offer, and design their services around it.

Easier said than done…

Source: Forbes

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9 Comments

  1. The brick and mortar retailer started to sell the steak in stead of the sizzle when online retailer’s started to get strong. Peaple will alway buy from the best experience. Right now that is with Amazon or the best price place. Starbucks sell the sizzle everyday in the same parking lot as McDonald’s.

  2. Whether people want to admit it or not this is the future of retail. Less brick and mortar means less rent for the retailer, less employees, just all around cheaper.first the products will be cheaper for on line sellers and then the quality of the product will eventually suffer. then and only then will you start to see a turn around back to the brick and mortar( a lot of years down the road.) Everything in retail life is a cycle. This one is a new type.The tax base will have to be figured out but i am sure they will find a way once all the states start complaining. Keep the lamp sucking. If you know the expression then you know what will happen with the tax base.

  3. So lets start with the sales tax leveling the playing field idea. Be careful what you wish for is what i think. There are a number of states that the online guys stay out of because of the tax liability (so instead of having warehouses where the customers are, they have them where they are not to minimize the tax liability). Now imagine if the larger guys started getting taxed in every state, why not put a warehouse next to every big city you have (think Amazon Fresh but with all the CE stuff currently sold). So I place an order today, and I have have my milk, eggs, cheese and CE delivered the next day (and instead of using UPS they could have an Amazon truck driving around making those deliveries as well; cutting out some additional cost in the process). That could kill one of the advantages the normal brick and mortar guys have for some items.

    As for Amazon using individual dealer\’s info; why do they need it? They have a ton of publicly available data (NPD, CEA, Google search terms) as well as their own data by categories (terms searched for, traffic, etc.). I don\’t think it takes a rocket scientist to figure out that Kenwood Car Audio would be something they want to carry (for example). I would be very surprised if it wasn\’t business analysts/merchandisers/buyers who were the ones doing the research into who and what to carry and not some number cruncher looking at their vendors\’ data.

    And as far as MAP, they don\’t seem to have a problem selling Bose at MAP (or unilateral pricing if that is the way I suspect Bose is set up). Because Amazon will abide by MAP if MAP is enforced (and Bose enforces MAP). And frankly most suppliers (even those that are very big) would not want to have their dirty laundry aired in court when it comes to how they distribute product and who they would sell sideways to if it meant hitting a sales goal.

  4. Another huge reason to have a 10% national sales tax on online sales. Might help balance our budget as well.

  5. ray windsor where are you??? cruthfield where are you? amazon has actually made me into a sharper reatailer. kits, plugs, interfaces, installation expertise. good luck amazon. try and get my brain cells.

  6. I agree with everyone. Thanks Bob for your input. Amazon needs to be stopped. The world will end up with one mass merchant and a world full of unemployment. Greedy EVIL bums that steal info when you list products.

  7. John is right. Amazon is the Darth Vader of online shopping. I own a very large online eCommerce business. We also sell through Amazon and have for many years, millions a year. In the fine print of the agreements, Amazon reserves the right to use all your product information. So the process is like this. Amazon sees you are selling a vendor that starts selling like crazy. They contact that vendor and start selling it direct, cutting you out of the process by selling at a lower price and most of the time violating MAP. PLUS all the heavy lifting of producing the product information is done for them FOR FREE by the seller. They even use our product videos and exclusive photos.

    Because of the volume they provide, they get away with it and we can just be defensive to protect what we can and not give them all the information and products.

    We warn vendors that sell them direct to Amazon or are considering it, they usually do not know what they are getting into. Once they are in Amazon direct, the nightmares begin for the vendor. Amazon starts selling under MAP and Amazon kindly reminds the vendor their legal stance on MAP and question the legality. Amazon has a billion attorneys and resources. This scares vendors and they keep selling and look the other way about the MAP policies. Thereby screwing their entire online selling distribution they have built over the years causing relationship problems with these vendors that have been supported for a long time by their established online selling base.

    This is precisely why many big online stores that can afford to pull out of Amazon or avoid it. Unfortunately we cannot afford do this, so we posture around the situation knowing the “real deal”.

    There are other online market places like Buy.com that have as a selling point they WILL NOT steal your product information or stab you in the back by selling direct. For people who have experienced Amazon nightmares, I suggest you check out other marketplaces that behave in a more civil ethical manner.

  8. in case youre wondering why 3 duplicate posts, their software kept telling me I made an error in the validation code, so i resubmitted a few times. oops they put all of them up, so apparently I did type in the correct codes eh?

  9. Amazon is turning out to be the evil empire. They offer the umbrella name of Amazon but have 1000’s of sub-sellers that whore out brand name products in clear violation of MAP agreements. Manufacturer’s just throw up their hands when complained to, –there is nothing we can do– they say, they say it’s NOT Amazon they can punish, but mystery sub sellers. Nobody takes responsibility, yet ever item in my store can be found in this network of sub-sellers at about my wholesale cost. Customers trust the umbrella name of Amazon and buy with confidence. Heck they even let them store their Visa number for quicker transactions. I’m complaining yes…but I’m also envious of their situation. They don’t have to lift a finger and make millions, while innocent of violating MAP agreements apparently. If I sell one stereo on Ebay I lose my dealer status for most brands, but not these guys. Amazon should have stuck to books as far as I’m concerned.

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