# Doing business today.



## KmH (Jan 11, 2012)

What works, and what doesn't work.

Bye, bye, Best Buy!

Why Best Buy is destined to fail - 1 - Online retailers - MSN Money


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## Derrel (Jan 11, 2012)

I read that article, and there was a single ,critical statement the author made that is either disingenuous,or just plain stupid. He said, "Most of what Amazon does right has nothing at all to do with technology or the Internet."

Uh, after he has spent four and a half of five pages running down Best Buy, he states that he is "not shilling for Amazon", and then drops that load of bull$h!= on us. Let's parse that sentence: "Most of what Amazon does right has nothing at all to do with technology or the Internet."

WRONG. Almost ALL of what Amazon does right, it can do because it is an internet retailer. Amazon came into existence because OF THE WEB. Amazon is an internet-based retailer. Amazon maintains no physical brick and mortar stores. Oh, sure they have some offices and server farms, but those are peanuts. Best Buy has to maintain thousands of retail outlets across the entire UNited States, and has apparently entered Europe and China. Building, equipping then maintaining large buildings costs from thousands to up to tens of thousands of dollars every season on lighting, heating, or air-conditioning---per building! According to BestBuy's corporate FAQ located at Frequently Asked Questions - Investor Relations - Best Buy Co., Inc., BestBuy operates and maintains over 4,100 stores. Not to mention staffing costs, janitorial,etc. Property tax,you get the idea.

Amazon on the other hand, does not maintain actual stores; contrary to author numbnuts's contention, almost EVERYTHING Amazon does well, it does because of the internet. Early on, in 1999, Amazon bought the Internet Movie Database (IMDb).They bought dPreview for Chrissakes--the world's leader in digital camera and digital photography discussion and review--bought in 2007 by Amazon. In 2008, they swallowed up Audible.com. The worlds BEST on-line shoe company, Zappos, was swallowed up by Amazon in 2009; Amazon can easily morp into whatever it wishes to be by buying new, internet-based sources of propaganda,advertising,and retailing. Buy the sources of information, and use them to funnel people to your wares. Amazon.

As was stated in the story, Best Buy (and Ritz Camera, Kits Camera, etc.,etc) serve as the "showroom" where unscrupulous customers go to get hands-on feel for products, then spin on their heels, walk out, head home, and order on-line not really "FROM" Amazon, but through the internet-connected network that "is" Amazon. Amazon is kind of like a sea louse or a leech,one might say. A blood-sucker, as it were. Amazon's no-hassle returns and no-fee restocking are made possible by their exceedingly low fixed costs; they are like a big,giant drop-shipping importer. Instead of sales people who they need to train and pay, they just make available on-line information and reviews; they allow customers to post on-line testimonials and reviews, which is a great way to convince people to buy complex products--by making available 10,15,20,or even 100 "reviews" made by "Customers". What Amazon does right is made possible entirely by their unusual status as a huge,huge "Clearinghouse" for orders and information. Amazon will become partners with almost any company that will shill for them, and which will put a link on their blog or web site, to refer potential internet-based viewers to another internet-based "portal".

The article is interesting in how the article under discussion demeans and runs down Best Buy. But the idea that Amazon's best practices are not due to the internet is a stupid comment; their ENTIRE business model is predicated on using the internet to funnel customers to a "portal". Not 4,100 stores with real merchandise, but a list of trusted associated brick and mortar retailers who have the items in-stock.As well as "some" directly-controlled Amazon stuff. Their ownership of dPreview is a pretty good example of a way to funnel customers to the mothership.

I do not work for BestBuy, and never have. That the store is in trouble in the face of Amazon becoming the biggest retailer in the USA is not surprising. The days of buying consumer electronics and such from a big box store are probably numbered. Amazon will take back previously viewed DVD's because they have established themselves as a place to go and BUY USED DVD's. Amazon is both a new-merchandise AND a used-merchandise vendor, which is something the author of the article failed to mention. The author's statement that customers would expect that the in-store and on-line experiences and stock and coupon promotion offers would be "identical" between brick and mortar and internet stores is also another bit of loony logic, but that's another story. Still, it was fun to read a story where a guy who was not shilling for Amazon completely ragged on a brick and mortar company for not being just like Amazon. It was a nice hatchet piece on Best Buy, but the Amazon stuff was based upon several really dubious assumptions. I think I can recognize a hatchet job when I see one.


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## bentcountershaft (Jan 11, 2012)

Derrel, you really should stop holding back and just tell us how you feel.


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## Bitter Jeweler (Jan 11, 2012)

Amazon is killing watch sales in retail stores offering to beat any sale price by 5%. 


Hostess is filing bankruptcy, again.


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## rexbobcat (Jan 11, 2012)

Hostess, the...uh....pastry company.....Hostess?


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## Bitter Jeweler (Jan 11, 2012)

Yup.

The Twinkie makers.


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## bentcountershaft (Jan 11, 2012)

I can only eat so many Zingers the rest of you are going to have to step up and do your part.


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## Bitter Jeweler (Jan 11, 2012)

I don't eat any Hostess products. The only thing that I am a sucker for comes from Little Debbie...the Nutty Bar!


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## Josh66 (Jan 11, 2012)

Bitter Jeweler said:


> Hostess is filing bankruptcy, again.


That was on the news tonight...  (They're based in Irving, TX)

They said there wouldn't be any layoffs or anything - just reorganizing...



Bitter Jeweler said:


> The only  thing that I am a sucker for comes from Little Debbie...the Nutty  Bar!


I pack at least 2 of those in my lunch every day.


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## Derrel (Jan 12, 2012)

Bitter Jeweler said:


> I don't eat any Hostess products. The only thing that I am a sucker for comes from Little Debbie...the Nutty Bar!



How appropriate!!

Sad to hear that Hostess is gone. I recall the sadness and sorrow when my favorite snack maker's brand, BlueBell, just sold out. One day, the world's best corn curls (the hard,irregular-shaped "Korn-Kurl") were suddenly gone. Gone for good.

As to the article bashing Best Buy, I loved the way it was so complete and realistic, with the tale of an unnamed sales associate and an angry customer who was too angry and upset to realize he was buying a duplicate DVD of a TV show he already owned (because he was so frickin' agitated at some young sales guy's tactics...gotta love it...middle-age rage and the inability to keep it together in a retail sales environment!!!).  The author alleging that Amazon's success has nothing to do with it being a web-based company (hilarious!) was an amusing premise. I LOVED the way he told us,point blank, that he was not shilling for Amazon. I have seen similar love-fest pieces before, like the ones talking about how fantastic B&H Photo is--the kind of pieces that just "pop up" now and again in prominent places.

A smart reader would also want to see an examination of the factors in consumer behavior that are affecting Best Buy,as well as other retailers. He brought up the fact that the company's main competition went bankrupt. Yeah...they did...once Amazon started offering on-line electronics purchases with no sales tax. People love beating the sales tax!!! People like shopping anywhere, any time. People want the lowest,lowest price, and the cheapest delivery. The guy's entire dressing down of one particular retail chain in a business that has very few members is highly suspect as to its motivation. Looks almost like an effort to stimulate stock sales for Amazon.com...

Still, an interesting article, a nice hatchet piece. Not sure if the author has ever studied business enough to see that once an entirely new social norm is created that the other one it replaced simply vanishes...we no longer buy flour by the barrel...or crackers by the individual piece from a mercantile store. Nor do we buy buggy whips for our horse teams. We shave with safety razors. Bamboo is no longer the fishing rod material. We do not travel trans-globally by ship when we can fly on a jet and make a business meeting in 8 hours' time. We no longer accept ice block deliveries for the ice box only after 10:00 AM!! Women no longer have dresses made by a seamstress, and wait 3 weeks for them to be sewn.


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## usayit (Jan 12, 2012)

I think Derrel may be missing part of the author's point....   quote

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 the folks at Amazon make a mistake, they admit it and they fix it.

end quote

Meaning if Amazon were not an online company and performed the same quality of service as a brick and motor store, it would still be sucessful.  Unlike best buy, who has both an online presence as well as a store front doing it all wrong by the lack of service.   In other words, simply being online is not the core of their success....  simply good ol business practices.  Lets not forget of the dot com bubble when many online retailers also fail...


I happen to agree with most of the article (the whole mention of Amazon was kind of a side bar in what I read).   I recently tried to buy something a bestbuy.  I checked their site for inventory and went out of my way to the store only to find that it was out of stock.  The kid said that there must be a delay in the update of the online inventory.   I showed the current status on my phone and left.. without any apologies nor management engagement.  I see problems with the store each and everytime I walk in.... really basic stupid stuff.   Its also not good to staff customer facing positions with high school kids who are most likely not going to offer the customer anything but a sense of cheap service.   Afterall its one of the main things they can offer above the service of an online retailer.

Another great comparison would have also been B and H.  Most  have only experienced them as an online retailer but they do a lot of right things  in their retail store as well.

My local PC richardson (terrible web site though) has done a few things right as well.....  for those local to NJ. .. or maybe its just the one I go to.    They staff people who obviously have that salesman attitude, work on commission (incentive to be involved), do come off as genuinely interested in selling something and have some leeway for bargaining.  Heck they even are required to dress business casual to further emphasise the part.   Now some of them do come off as used car salesmen at times... but at least you feel like you are engaged as a customer rather than a side bar of some hourly part time employee.   Granted, I have only made appliance purchases and always go in with the intention of buy two large purchase.   I make it well known that I have cash and I am interested ina packaged deal.  It gives them an incentive to budge on Price or risk loosing a big sale.   This past time, it was a dishwasher and TV at the same time.... and the sales guy stayed with me on both.  Best buy TV person would have said that is the price take it or leave it AND hand me off to some other sales guy when it came time to look at dishwashers.



PS technically there is a federal sales tax to be levied on online purchases.   I doubt its a red flag to the IRS though.   I personally have a problem with this but I jnow my opinion on this is very unpopular because most are too self interested to see the wider impacts.   In essense, we complain of store closures and layoffs at the local level yet back a taxation practice that specifically places a particicular player at a distinct disadvantage.   I use the term player specifically to point out that business and free market is a game with winners and loosers; only fair if all parties are playing by the same rules.


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## Canuk (Jan 12, 2012)

usayit said:


> I recently tried to buy something a bestbuy.  I checked their site for inventory and went out of my way to the store only to find that it was out of stock.  The kid said that there must be a delay in the update of the online inventory.   I showed the current status on my phone and left.. without any apologies nor management engagement.  I see problems with the store each and everytime I walk in.... really basic stupid stuff.   Its also not good to staff customer facing positions with high school kids who are most likely not going to offer the customer anything but a sense of cheap service.   Afterall its one of the main things they can offer above the service of an online retailer.



It is easy to bash on the big box stores for customer service. They typically are staffed w/ under qualified people that only have a very basic understanding of the products they are selling. The problem is caused by many factors, part of which is offering products w/ little or no mark up. That forces the company to cut cost as much as possible and usually that mean offering very little in wages. 

I understand the economic situation is much different in the other parts of the world than it is here. I live in Alberta and our oilpatch is running at full steam. Who wants to work in a retail store for $12/hr when you can drive a delivery truck for over $20/hr or work the rigs for $30/hr +? 

Personally I only go to the big box stores to take advantage of sales on products I know about, other than that I will gladly pay an extra % to buy from my brick and mortar camera shop, and support my local businesses. The advice and help I get from them is well worth the price of admission, IMHO.


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## KmH (Jan 12, 2012)

The point is, the internet and mobil connectivity is rapidly changing the retail environment.


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## sm4him (Jan 12, 2012)

Bitter Jeweler said:


> I don't eat any Hostess products. The only thing that I am a sucker for comes from Little Debbie...the Nutty Bar!



Aw man...now I can't work for thinking about how very much I want a Nutty Bar! I used to keep a stash of them in one of my cabinets, but evidently I haven't replenished the supply.
Now I gotta go by the grocery store on the way home.


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## Bitter Jeweler (Jan 12, 2012)

Yeah, I am going to have to go downstairs and get some now too!


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## Omofo (Jan 12, 2012)

I buy handheld electronics for their accidental damage warranty. Money well spent.


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## usayit (Jan 12, 2012)

Canuk said:
			
		

> It is easy to bash on the big box stores for customer service.
> 
> .



Just to be clear... I wasn't bashing big box stores in general, just best buy specifically.   I gave praise to of pc Richards and Bh for example.   In fact, ninety  percent of my purchases are from local vendors.  Of that photo stuff new are from the local mom and pop shops...  My Leica dealer is Bergen county camera.

PS none of the reasons are any excuse for low quality service.  Service and retail in general have gone down hill over the past three decades.   I have theories but that's a different topic.


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## usayit (Jan 12, 2012)

Omofo said:
			
		

> I buy handheld electronics for their accidental damage warranty. Money well spent.



Just curious...  Have you actually made a claim on the warranty?


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