Print 88 comment(s) - last by namechamps.. on Apr 26 at 9:20 PM

Changes will come in next 3 to 5 years

The world of retail electronics has changed drastically over the years. It used to be that most people were going to retail stores to make a purchase. Today, many people go into a retail store to see how a device works and research an item, then go home to purchase it online. The reasons for this are many, but much lies with the lower price that many gadgets can be found for online.

The largest consumer electronics retailer left in the U.S. is Best Buy. Best Buy is still facing stiff competition on the market with Wal-Mart, Target and other discount chains selling more electronics than they did in years past. Best Buy currently operates a number of large stores that its calls “big boxes”. These stores range anywhere from 20,000 square feet to 58,000 square feet.

According to Best Buy, these stores have huge overhead and are "white elephants" in the industry. The retail chain is looking to cut the amount of space and overhead these stores have by about 10% over the next several years. This comes after three straight quarters of same-store sales decline and a forecast for more declines in sales. The blame is placed on the Best Buy’s ailing TV business.

Analyst Scot Ciccarelli said, "I do believe that a lot of their bigger box stores have to be downsized. If there was a disappointment, I was kind of hoping they would be even a little bit more aggressive than what they outlined." He continued saying, "It's [the size reduction] not that big for this company. What I think you really need to do is maybe downsize a little bit quicker."

Analyst David Strasser from Janney echoed Ciccarelli saying, "We believe the Street wants more. We look at this as a first step that shows us the company is looking at reductions."

While Best Buy is seeing same-store sales decline, it is trying to grow it online business significantly. Best Buy wants to double its online sales from the current $2 billion over the next three to five years. Best Buy CEO Brian Dunn said, "The online channel is our greatest growth opportunity."

Dunn did note that retail was a part of Best Buy and defended its retail brick and mortar presence. He said that stores augment online. While Best Buy is looking to shrink its big box stores, it plans to increase the number of small stand-alone stores like Best Buy Mobile offerings to between 600 and 800 within the next five years.

Best Buy also has plans to grow operations in China and is pressuring U.S. lawmakers to force the collection of sales tax to help "level the market".

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RE: Wow.
By vazili on 4/15/2011 1:18:16 PM , Rating: 0
I hear you. I work at a Best Buy in Virginia and an hour south of here is one of the worst Best Buys I've ever been to. I hope all of you who come into Best Buy to do your research and then shop online know that you're killing possibly thousands of jobs.

I sell Home Theater. You wanna know how much we make on a TV? Next to nothing and people still act like we make upwards of 100 dollars/sale. And my installers are some of the best in the area.

I'd love to see any one of you mount a 55" plasma TV or LED TV while hiding all of the wires, programming the remote, and teaching other people how to do it in 90 minutes. That's all our installers get 90 minutes.

And for Geek Squad? All of them in my store are Computer Science Majors or work for the University in networking.

RE: Wow.
By cjohnson2136 on 4/15/2011 1:30:24 PM , Rating: 2
And for Geek Squad? All of them in my store are Computer Science Majors or work for the University in networking.

This is true of the Best Buy near my school 90% of the technicians are college students the other 10% are morons though. But that is just one store. I have always been happy with the service when I go there. Some departments are better then others. But again that's one store. When I was working as an intern I was actually looking at getting a job for Geek Squad cause I needed more money luckily I got a programming job with Bally Total Fitness

RE: Wow.
By Black1969ta on 4/15/2011 2:37:26 PM , Rating: 2
Sure the Margins on TV's are low, that is because consumers will shop around for a TV, but then they purchase the accessories where ever the TV sale was.

I am sure that when I can find an identical HDMI cable online for $5 but BestBuy charges $30. Heck, i found a clearance 6ft HDMI 1.3a cable a Walmart for $10, that was normally priced at $50, since they don't take a loss on clearance items, that pretty much tells me what their mark-up is.

RE: Wow.
By Jalek on 4/15/2011 2:56:33 PM , Rating: 2
Those cables have been an annoyance for customers for years, you'd think they would have stopped by now. Before HDMI, it was the parallel cable for your new inkjet printer that was $40, bi-directional you know.

When the gouging's that apparent, even a dullard will wonder where else they're getting screwed in the deal and probably shop around more next time.

RE: Wow.
By MrTeal on 4/15/2011 2:42:28 PM , Rating: 2
I know a lot of CS majors that wouldn't know how to install a HDD unless a TA held their hand while they turned the screwdriver. Not to say yours aren't capable, but being enrolled in a program really doesn't mean a whole lot.

RE: Wow.
By cjohnson2136 on 4/15/2011 5:23:58 PM , Rating: 2
I think his point is that just cause you had one moron Geek Squad person you can't discredit all of them. It is just like any other job you have some really bad ones, some really good ones, and a lot of mediocre ones. Just like any field.

RE: Wow.
By ihateu3 on 4/15/2011 9:51:43 PM , Rating: 2
Why would we feel bad if Best Buy went under? Sure I would feel bad about the unemployed, but I am not going to help a company that in the past has redirected its own customers to a different best buy website that has higher prices!

Basically the customer would check a price at home on best buys website, then go to the store and find a higher price, which best buy conveniently offers the customer use of their wifi. To the customers suprise, this redirected best buy website has marked up prices from what they viewed at home.

I will not support this kind of fraud!

RE: Wow.
By cmdrdredd on 4/17/2011 9:26:00 PM , Rating: 2
I'd love to see any one of you mount a 55" plasma TV or LED TV while hiding all of the wires, programming the remote, and teaching other people how to do it in 90 minutes. That's all our installers get 90 minutes. And for Geek Squad? All of them in my store are Computer Science Majors or work for the University in networking.

I mounted my own TVs, multiple. Did all wiring through the walls/attic, hid everything, programmed my harmony remote in 5 minutes, calibrated the set, hooked up my home theater systems, calibrated the receiver for the room and speaker distances and set proper levels etc. Renamed the inputs, and programmed my OVA channels. Took less than an hour each time from start to finish once I had everything planned out. Total cost? ZERO out of pocket labor, $15 for a case of beer.

Your geek squad is a joke. You think because someone is a major in some university they know anything? That's a laugh...nobody who is straight out of school knows much about real world networking and computer technology. They're usually like "um...that's not in my book and we never studied that so I cannot help you." Pitiful...

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