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Best Buy prepares to close many of its big box stores

Last Wednesday, Brian Dunn stepped down from his position as CEO of Best Buy. Initially, most speculated that Dunn was forced out due to the poor performance of the company under his tenure. Later in the day, however, we learned that Dunn only stepped down after an internal investigation found out that he "misused company assets" while having an improper relationship with a female employee.
 
This latest drama surrounding Best Buy came shortly after the company announced that it was closing 50 stores in an effort to save $800 million dollars. The company has already closed two of the 50 stores, and notified six others that they would be closing.
 
Yesterday, the company revealed the list of the remaining 42 stores that will be closed. Best Buy expects that most of the stores will permanently shut their doors to customers by May 2.
 
The company issued the following statement:
 
This was not an easy decision to make. We chose these stores carefully, and are working to ensure the impact to our employees will be as minimal as possible, while serving all customers in a convenient and satisfying way. But we also recognize the impact this news has on the people who deserve respect for the contributions they have made to our business.
 
We will be working to help these employees find other positions inside Best Buy. If they don’t find new positions, or if they choose not to work at a different location, a transition including severance packages will be available.
 
You can view the full list of stores that will close here.

Sources: Best Buy, Wall Street Journal



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RE: Three things they need to do
By Warren21 on 4/15/2012 7:44:21 PM , Rating: 3
I have worked at Best Buy in the past as a part-time computer sales employee.

1. We were pushed to upsell things that have big margin (services, accessories) because that's 'where all the money is.' If you're a good salesperson, sometimes your manager/senior will ask you to ignore sections of the department/customers where we can't atttach/upsell these things (Ie. "Ignore those small sales, we need XYZ big sales!"

2. They try to get away with a hybrid model of having almost no dedicated cashiers but training every employee to take debit/credit transactions. This allows them to pull idle sales people from the floor when the cashiers are busy, but not have to spend labour on idle cashiers. Good in theory, bad in practice when no sales people come up to the front to help out.

3. This is simply bad work ethic/management. We used to call them "blueberry patches"; it was something the store management was lackadaisically trying to curb. Part of it has to do with it being a non-commission environment; there is no desire to work harder for every potential sale beyond recognition and job security. When you're talking about a close to minimum wage part-time job, that isn't really a worry. Especially in my time there, I was one of the only people who would rarely engage in these circle-jerks of blue shirts. It would lead to me being the only associate helping 3 customers at once half the time.

Also in my time there, my department (and the store) would frequently miss revenue targets, yet get good numbers for attachment. If this is indicative of any other locations, I can understand the trouble they're in.


RE: Three things they need to do
By dgingerich on 4/15/2012 9:26:29 PM , Rating: 3
I worked retail for 7 years before I got into computer support. I worked two years for Best Buy. back when Best Buy was at the top of their game. Customer service, not sales, was the name of the game. We were not pushed to sell people anything, we were there to provide information, keep the store clean, and help customers with physical labor. This is the way most retail stores work, all the successful ones. Best Buy moved away from that, and now they're failing. What you describe is exactly that kind of change. It's not a really big reach to figure out why they're going down now.


RE: Three things they need to do
By FITCamaro on 4/16/2012 8:53:07 AM , Rating: 3
I dunno when you worked there but when I did, it was all about the upsell. They didn't give a crap that you actually helped a customer get what they need and want. They cared about whether or not you were selling the $150-200 service plan on the $400 Emachine POS(back before they had price adjusted service plans). Whether or not you attached a UPS to the sale.

I left because I got tired of the managers there treating me like I was going to be like them. A 40 year old working at Best Buy.


RE: Three things they need to do
By cknobman on 4/16/2012 10:11:35 AM , Rating: 3
Same for me and I worked there 2004-2005 while I was getting my CIS degree.

Everything was about upsell and attachments and salesmen would literally get reemed and have their jobs threatened if we let someone walk out just buying a base product with no accessories, warranties, or services.

I worked in the computer/printer department and constantly was in trouble for not attaching $30+ USB cables with computers and printers. To keep out of trouble I found a $10 "Geek Squad" cable and attached it to my printer sales. My manager would get furious and come ask me why I would not sell the "better" cables. I would explain they were not really better (not going into specifics but he lost the argument every time). My manager go so mad at me for selling the "lower margin" cable he actually removed it from the computer department (seriously I am not making this up) in an attempt to force me to sell the more expensive cables. Of course I found where the cable was moved to (home theater) and just walked customers over to that area and showed them the cable.

Best Buy has shady business practices and preys on the uneducated shopper, that is their problem, and until they stop doing it and loose that reputation they will continue to dwindle market share away.


RE: Three things they need to do
By dgingerich on 4/16/2012 10:56:57 AM , Rating: 3
I worked for them back in 1993-1994, back when it was more like working at Target. Mind you, Target is still in business, doing well, and still growing. They stuck with the customer service mentality. Best Buy went to the upsell and service plan mentality, and thus that company is dying. Bad management.


By Reclaimer77 on 4/16/2012 2:33:08 PM , Rating: 2
I'm sure if we did a massive survey, we would find that most people don't look back on a former employer fondly regardless. Your observations about Best Buy seem consistent with almost every other retail business. Especially #1. EVERY business looks to up-sell on big margin products. When I did food service I learned real quick why managers always have the waitstaff push appetizers. You wouldn't believe the margin on those things!

quote:
3. Part of it has to do with it being a non-commission environment; there is no desire to work harder for every potential sale beyond recognition and job security.


This seems a bit flawed. That model just wouldn't work in Best Buy because most transactions are made without any sales help at all. People walk in, grab what they want, and walk out. If you need one sales person on commission dedicated to every potential sale, your staff requirements would be massive. Which would REALLY hurt profits.

quote:
2. They try to get away with a hybrid model of having almost no dedicated cashiers but training every employee to take debit/credit transactions. This allows them to pull idle sales people from the floor when the cashiers are busy, but not have to spend labour on idle cashiers. Good in theory, bad in practice when no sales people come up to the front to help out.


I tend to agree here. But in the context of Best Buy, which largely employs a younger less-reliable class of employee as do most retail chains, this model makes sense. That way when someone gets "sick", you aren't screwed because they were the dedicated trained cashier or whatever that day. You can rotate whoever in their place. There are pros and cons to both methods.

I'm not sure how these issues could possibly explain Best Buy losing half it's value in two years.


"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer














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