Best Buy a bad buy for investors

Best Buy made just $12m in profit on revenues of $10.6bn in the last quarter, falling from $150m over the same period last year. With stock and sales alike slumping, the firm suspended its profit forecast and share buybacks. Best Buy knows exactly what the problem is—it freely admits that everyone uses it to check out gadgets they then buy cheaper online—but hasn't found a way to turn the tide. [BBC and Dealnews]


  1. i decided (a loooooong time ago) that if best buy had more affordable prices on their merchandise that i would shop there more often. however, since i was able to visit nearby stores and purchase the same items for less i just simply stopped shopping there. dvd’s were typically $10 more than they were at target or walmart as was the mark up on most of their other merchandise. i say ‘good riddance, let them go under.’

    1.  I actually have made big purchases at Best Buy in the last year.  I bought an HD projector that cost more than $1000.  I also bought the three prequel Star Wars Blu-Ray there.  Lastly, I bought a cheap Blu-Ray player for my parents there.

      All three purchases were made because they were on sale.  In the case of the projector, it was $100 cheaper than anywhere else that I could find it, and even though sales tax meant it cost the same as mailorder, I wanted the option of returning it conveniently if there was a problem (there wasn’t).  For the DVDs, I had their points from their points program from buying the projector, and the movie bundle was half-price and cheaper than anywhere else, and essentially free with the points, and I wasn’t going to pay perfectly good money for those abortions compared to the original movies.  As for the player, we needed a present, it was quick and cheap.

      I have also been one of those, “play with it before ordering it online” people, but I spread the joy around.  Fry’s Electronics, Costco (though they do end up with the business), Target, Walmart (and I almost ever give them my money, I want to see what the worst possible treatment does to things) and other chain stores are all used this way.

      If their prices were closer to mail-order catalog prices (which is all that the Internet really is) then I’d probably buy locally.  Prices don’t need to be the same, but if they’re within a couple dollars for a cheaper item, or within fifty or so for an expensive item, I’ll probably go local so I can return easily and so I can have it right now.  Otherwise it’s worth the wait.

  2. Maybe if they didn’t rip people off SO bad they wouldn’t have this problem. It only takes getting burned a few times before you start comparing EVERYTHING to online… I bought a pair of headphones for 58 dollars, I found out later Amazon has the same exact ones for 22-25 dollars normally… Over double and I should buy from them? Sorry B&M convenience is not worth 110% mark-up…

  3. They closed the only store in my city and now I have to travel for an hour if I want the privilege of shopping at a Best Buy. It’s like they *want* me to just buy everything online. I’m still confused as to how they concluded that closing stores would result in more sales.

    1. So they’re supposed to keep a store open, even when it doesn’t make enough money to cover the costs of keeping that store open?

      1.  Part of the problem with retail chains is that they do a piss-poor job of evaluating who’ll travel to the next closest store when they close a store, and who’ll just find another source.  In GP’s case, they probably wrote her off as a customer when they closed that store if they closed the only one in the city.

        Around here, the credit union that I used to use had only one branch on my side of town, and by side of town, I mean at all east of the center of a city that’s 40+ miles wide.  They decided to close that branch, so I was essentially forced to take my accounts elsewhere.  Oh, they got rid of shared branching at the same time, which was the nail in the coffin.

  4. I’m sure that’s a problem, but it’s certainly not THE problem. I don’t go in there because a) they very rarely have what I’m looking for, b) the horrible salespeople. If they had what I was looking for and wouldn’t try to push an extended warranty on it (which they won’t honor if anything goes wrong) I’d quite likely buy – because I only go in there when I’m desperate.

    1. Not to mention they treat you like crap while Amazon’s customer service is practically legendary.

    2. You nailed it.  It’s the salespeople.  If I can even chase one down, they can’t help me at all.  They’ve openly scoffed at my entertainment choices (because this is 1992 and girls don’t buy Xbox games, right?), told me they didn’t have an item in stock when it was on the shelf directly behind them, and basically just ignored me whenever I try to give them money.  

      1. I’ve never had any of them actually scoff at me openly, but if I never have another apathetic, drugged-acting teenager treat a simple question or request as if I were asking them to work out calculus problems in their head, it will be too soon. Tellingly, the best service that I’ve had there recently has been from the rare older salesperson, and my heart goes out to them for having to endure that purgatory. You might think that someone at BB would have made a note of how quickly their late competitor, Circuit City, went under after their management kicked the more experience salespeople to the curb and hired cheaper but vastly more ignorant staff to replace them, but no.

  5. Bestbuy sells appliances and DVDs now.  Neither of which I buy anymore, so I have not been in a store for some time.  I think they might still sell games too, but I buy all of my games through Steam these days so even that is out.  

    1.  Bestbuy sells appliances and DVDs now.

      You make it seem like they haven’t been selling these items for close to two decades or more.  I remember back when they had a decent music selection and a whole assortment of computer software including games…the ones that cost +$50.

  6. But Best Buy is great! Just look at their limited selection of overpriced Monster cables. Only $80 to connect your DVD player to your TV!

    1. Best Buy is probably falling down the same hole that Radio Shack has, where they think that if they just stock more of the globally popular items, then business would just flow! However, maybe if they focused on quality and maybe a wider variety of options rather than a Henry Ford-ish “You can have any laptop sleeve you want, as long as it’s made by Case Logic.” 

        1. Sadly, my local closed down within the last year after successfully migrating to entirely-hidden resistor bins.

        2.  You haven’t been in one in a while, have you?

          Monday afternoon I bought two packages of compression-fit RCA connectors for RG-6 cable and the compression tool to make my own 75Ω cables for composite and component video signals.  They had trays and trays of connectors and the tools to use them.

          I was amazed.  I had planned to go into the Ace Hardware next door, but went into Radio Shack as a hail-mary and was surprised.  They also had LR44 batteries for my calipers (which they now sell) and a bunch of other interesting tools and parts.

          Maybe I won’t have to go to Fry’s for some of the things I need now.

  7. The way I see it, they were the ones who put small neighborhood stores out of business. Now it’s their turn and I can’t pull up a whole lot of sympathy. On the flip side, Walmart just opened a small neighborhood store in my neighborhood. Wouldn’t touch it with a ten-foot pole; in fact I won’t even walk down that side of the street. Sic semper tyrannis, or something like that.

    1. Small neighborhood electronics stores? I guess I remember Silo and Fretter, but neither seemed appreciably more “neighborhoody” to me.

      1. No, Best Buy used CDs as a loss-leader to get people into the stores, which helped contribute to the death of many local music shops.

  8. Best Buy did the ultimate screw up last holiday season when they took orders online that they then simply didn’t fill just before Christmas. My understanding is that they sold so many items at such low online prices that they would have taken a huge loss if they filled all the orders — so they just didn’t fill them; notified customers that their orders were canceled. Screw me once, your fault; screw me twice, that’s on me; so who’s going to shop there again after getting screwed over at Christmas time? Second, they have a dreadful selection, and dreadful service. I went in there to actually give them money for a new Android tablet. They had a large Apple/iPad section that was booming with staff; but the Android section? Not a single tab (and there wasn’t a huge selection anyhow) was working/turned on. The sales staff at BB are even worse in terms of a lack of knowledge than the sales staff at Fry’s.

    I don’t even go there any longer to window shop/compare prices.


  9. I get it…a brick and mortar store is never going to be able to compete on price alone. But when I can go into a Best Buy, see a hard drive selling for $100, then look up the same item **on Best Buy’s own site** for $80, something’s wrong. Usually at that point I complete the purchase on my phone, choose the option for store pickup, and walk over to customer service and pick it up.

  10. Um… you know how to turn the tide. Lower prices OR simply price-match online sources. Problem solved… or of course you could just go out-of-business. Adapt or die.

  11. The last time I went into my local Best Buy (to look at digital camcorders), the staff ignored me. They stood around in a group near the front door and talked with each other. None appeared to have hit thirty yet, so I guessed their work habits hadn’t quite matured. I even tried my old trick for getting attention from store staff: I stood next to something really expensive and looked inquisitive. Nope, they didn’t care.

    That store closed a few months later. The building is still vacant.

    1. Same thing happened to me when I tried to buy a new TV.  For half an hour I tried to get a salesperson to answer the ONE question I had.  I want to give you hundreds of dollars!  Talk to me!

      1. I’ve had good luck at Fry’s by walking up to the podium where they’re all chit-chatting and asking, “Who wants to make some money? Follow me.” It works, and you get to feel all big.

        I think BB might be similar in that no worker is *really* tied to the section they’re in, so you can walk up to someone in the Skullcandy Department and have them sell you a laptop or whatever.

    2. As someone who is under thirty and has worked multiple customer service jobs, I’d say it’s probably Best Buy’s fault mostly that their staff is like this. They should be able to hold their salespeople to better standards and supervise them better. These people may also be horrible salespeople, but if Best Buy has no overhead for watching them/screening them, then it’s more their fault. My work habits matured pretty damn quickly when it was necessary for me to be a good salesperson to keep my job.

  12. I hold up MicroCenter in refute of their argument. Knowledgeable salespeople, great inventory and no pressure seems to work well for them. Busy every time I go in there.

    1.  i love microcenter. if i ever need help they help me. most of the time though i usually know what i’m going in there to get and they can sense that and pretty much leave me alone. it’s a great store.

      1. LOVE the Microcenter (St. Louis Park, MN for anyone wondering) nearby.  Knowledgeable sales staff from top to bottom.  I can still find most items a bit cheaper online (except their MoBo/CPU combos which are unbeatably priced), but I’m happy to pay a little extra when the staff have actual knowledge of the products they’re selling.  

        My only quibble is that it can be just a little difficult finding someone to help you at times due to how busy the store can be.

    2. I just saw a MicroCenter in Sunnyvale and was surprised at its appearance of not being a ghost town! I seriously thoguht BB was the last big-box computer store.

  13. It’s not rocket science to realize that if they didn’t charge so much, people would still pay more for the convenience of an in-store instant purchase.  But they’re more focused on winning each battle than the overall war.  Their prices are obscenely high and they also stock a lot of items of questionable quality/brands at the price points that solid brands make products at, in effort of maximizing profits and convincing people to trade up.

    I go through a lot of headphones running, so I just buy relatively cheap $10 pairs.  Everything under $15 there sounds like an off-brand in a 99¢ store. The last time I looked, the exact same Sony headphones that most online retailers ( and stores like J&R ) charge $10 for, BestBuy wanted $20.  I just don’t bother with them anymore.I’ve also seen only random off-brand TVs offered (or severely crippled name brand models) at the lower price points, in effort to make people spend more money for the name brands.  It’s just silly.  If (hypothetical example) Samsung makes a $200 TV, they should offer it — not merely offer a random Chinese brand at that price, and force people to pay at least $700 for a Samsung.

  14. They drove me away years ago with the constant thrumming of car stereo subwoofers. The prices and lack of service contributed as well.

  15. One of my first jobs was at Home Depot, so I can smell employee apathy from a great distance.  When you have service that is that universally poor, it’s by design.  You do not get knowledgeable people for minimum wage.  Even the teenagers have the sense to know when they’re in a dead end position.  One look at middle management tells you that only a complete underachiever would aspire for a promotion in such an organization.

    1. Reminds me of my ranting  when my work place did their last contract negotiation.  Corp thought/thinks they’re getting ahead by driving down the starting wage and making the time between raises further apart.  Nothing like seeing someone piss their pants to keep warm..

    2. Home Depot is the only store I know of where the employees actually hide their work clothes so you can’t tell that they work there.

      1.  Must be a local management issue. The HD I visit seems to be staffed by people who are more than willing to help. I get greeted at the door and if I’m in an isle with even a slightly puzzled face I’m pretty much assured that an employee will be offering help.

        1. Yeah, every confab about HD I’ve ever seen seems to be split between “mine is all retired experts” and “mine is people for whom Walmart is too far away.”

    3. The Home Depot in Rancho Mirage (15  miles away) seems to only employ retired plumbers, electricians, etc.  You could get pretty much any question answered promptly and correctly.  They opened a store in Palm Springs a couple of years ago and hired people who are experts in absolutely nothing whatsoever, including spelling and counting to 20.

  16. Maybe Best Buy would be more profitable if they didn’t spend so much on anti-gay causes.  Just sayin’.

  17. The god awful sales staff and the WorstBuy extended warraties  are not helping them either. The last major purchase I made there was when the spouse needed a new computer ASAP and there is one within walking distance. I had to tell the staff no to the warranty twice and that we were walking out with no purchase if they ask a third time.

  18. The margins on things in brown boxes is minimal. The push for extended warranties can often be the only profit to the store. When VCRs were still a going concern they stocked only the bottom of the line. True for other items too. Finding very little reason to ever go to their stores, I stopped going 3 years ago.

  19. There was a brief shining moment when the Best Buy closest to my home had a reasonable quantity of good sales people. But now the only help I find is a wandering DirecTV representative. I wanted a Toshiba TV for my daughter. Nice price, good features. When I finally (not I, the DirecTV person) found a sales rep, he spent a lot of effort trying to talk me into buying a different brand. I would not budge and when I asked to buy the Toshiba, he refused. “I need to sell ten Samsungs before I can sell another Toshiba.” It took two more people before the Toshiba was sold to me… at a price reasonable for a brick and board store. Why not let the market determine what you sell, rather than the merchandisers?

    1. “I need to sell ten Samsungs before I can sell another Toshiba.”

      Well, given the massive amount of people shopping for televisions here, good luck with that buddy.  Oh look, there’s an actual store who just wants to sell me what I want.  Good day sirrah!

  20. The most common items that I will pay for at Best Buy are accessories… if I buy a new phone and I want a car charger, second charger for home, and a car audio cable, a shock case, a belt clip  carrying case etc… I would love to go to the store and know that they had these items in stock.   But they don’t…. their selection is lousy… so if i am forced to order these items online, then I might as well just order the device online too and wait a week or so for them to show up.

    1. Buying peripherals/accessories is the best way to pay an 800% markup at Best Buy.  Even the best priced brick and mortar stores will have a significant markup over online (much higher cost for them to stock equivalent items etc).

  21. Our Best Buy was one of the first outside the Twin Cities, so I’ve been able to watch the chain’s various demi-incarnations in goods and customer-handling. I recall when they got into CDs in a big way: they went through the classic category-killing process of offering a big selection at really low prices, and after all the smaller music-selling operations in the area were driven into the ground, the prices went up, the selection shrank to whatever the 12-25 demographic wants, and now if a St. Cloud customer wants a classical or jazz CD, it’s off to one of the Twin Cities’ independent stores.

    Mid-level audio and computer and general geek gear is always a problem in a small city, but for a while Best Buy did carry a reasonable range of products, but eventually that went the way of the music inventory: almost nothing that a gearhead or moderately serious listener would be interested in, and the narrow range of products on the shelves is overpriced and underwhelming. When it came time for us to buy a flat-screen TV, Sears had a better selection and lower prices–and (though this is probably a happy accident) a more knowledgeable and helpful staffer.

    Still, that profit figure is stunning–you almost wonder whether there’s a big hole in their corporate pocket. The posts that precede this one suggest that the company is doing almost every conceivable thing wrong. That’s impressive.

  22. Maybe they should just be a showroom. Complete your purchase in-store for a discount, and have the product delivered to your home. Maybe they could even work like an Amazon affiliate.

  23. I’ve had a mixed-bag of experiences at Best Buy over the years. Some really great (netbook!) others not great (no male sales jerks will talk to my wife when we go to get a TV, only me) to strange (sales kid all of 17 tried to tell me that RAM drives are not rewritable, got his manager to back him up) to terrible (actually got nasty emails from a store manager when I told him I’d shop at Amazon instead).

    But here’s the thing– in NO way do I want them to go under. They employ a ton of people here in the Twin Cities. Several are at least acquantincies over the years. And at least one dept. with foresight funded a friend’s documentary on innovation.

    I DO hope the buy out goes through and jobs –and a company that once had promise–can be restored to success and not treating customers like dirt.

    I think they’re learning their lesson when it comes to bad customer service. I look forward to seeing them experiment with the Geek Squad in Target stores (if it indeed happens).

  24. They could make up the shortfall by charging admission to enter the store, which would be refunded if you actually bought something.  That’ll extract a profit from those deadbeat online shoppers!

    Yeah, that’s it. I’m sure it will work.

  25. If they didn’t want to pay for a better staff and better service practices so that shopping there felt more like a trip to your go-to electronics guys than like being a rube mark at a sketchy carnival, they’d actually be better off  hiring less people.  Just chain all the display gadgets down, where you could touch and play with them but couldn’t easily pocket them.  Instead of stocking the shelves, just put a scanner tag on the shelf that you could scan with a handheld device (yours or theirs) or take to the register to scan. Have automated self check-outs that sent your paid-for  purchase order to the back.  A couple of warehouse clerks bag the order and send it down a belt to you.  They could cut through the illusion of having service that’s extra frustrating when it turns out that the help doesn’t know any more about things than you do and then tries to be pushy and annoying in the process.  They could even be open more hours that way, with having to have a super minimal staff.The labor savings could be passed on to help close the price gap some.  It would combine the pick what you want and be left alone style of the internet with the convenience of being local and visible and touchable. 

  26. I stopped shopping there the first time I was asked to show my receipt for a purchase I had made in full view of the door staff.  Even after you’ve actually spent money there, the treat you crappily.

    When I worked for Borders, we were taught that the time between a person getting in line to check out and getting out the door is the most important customer service time.  Anything that made that experience more pleasant was worth it in customer retention.

  27. Last major purchase I attempted to make at Best Buy was a TV. Wife and I went in and found a TV we liked. They hemmed and hawed and finally admitted they didn’t have it in stock, but swore up and down they could just ship it from the warehouse and it’d be there in 2 days. We said fine, paid, went home. 2 days go by, no TV. After spending half a day getting bounced around by customer service, they swore they’d have it to us the next day. Next day, no TV. Spend half a day getting bounced around by customer service and they say okay, well, MAYBE next week. I don’t blow $800 for a maybe. Went back to Best Buy, got a refund. 

    Found the TV on Amazon, paid LESS with free shipping, got it in two days, delivered by a local courier service and the guys even unpacked it and took the box and styrofoam crap for no additional charge (though I gave them a good tip) and only left once we were all sure it was working. 

    Amazon it is!

    1.  I don’t doubt this but I have to say that I have bought several major appliances at Best Buy over the last few years and received decent prices and good service, including through a return for a different model. I’d buy appliances there again, but never go there for anything else any more.

  28. Maybe they should invest in helmets that each customer must put on as they first come in to the store. They would work like parking meters. Either swipe a card, or insert some coins and you are allowed to see as you walk through the store. Stop paying and the visor goes opaque, and a light on top starts flashing so an associate knows they need to be taken to the exit. It’s a “can’t fail” plan.

  29. My keyboard suffered a sudden complete failure after I accidentally knocked it off my desk.  I needed a new keyboard and I need one quickly, so mail order was not an option.  I ended up going to three stores 1) Best Buy 2) Another North America wide chain that has some retail stores but is primarily online and 3) a regional chain.  At Best Buy I got no service.  They didn’t have the keyboard I was looking for in stock.  If it had been in stock it would have been $20 more then I ultimately paid for it. And the only reasonable alternative was in a badly damaged box with no discount offered. At store number 2, I got great service but they sadly did not have what I was looking for. They did offer some good alternatives though.  At store three they had a big stack of the key boards I was looking for, plus large stacks of several good alternatives.   Out of the three, it is Best Buy I won’t be going back too.

  30. I actually went into a Best buy yesterday thinking of buying a new android phone. My carrier has them online, but I wanted to get a sense of the feel of them and ask a few questions as the technical details were a bit vague.

    I couldn’t find a knowledgeable staff to talk with me and moreso, they didn’t have the phone, just empty boxes which were themselves locked on those product hangers.  I couldn’t even pick up the EMPTY box to read details there.  Completely pointless.  I would have honestly bought the phone if I could have gotten my questions answered.  Instead went back online did some research and ordered it directly from my carrier – at a 20% discount, too.

  31. Maybe they should try treating every customer like a shoplifter, inspecting bags on the way out before you’ve walked five feet from the cash register when they can clearly see that you just paid for those items. Or push spurious service contracts at outrageously inflated prices. Or maybe they should play obnoxious music really loud throughout the store so that the ears of responsible adults bleed. Or perhaps they should work with suppliers to make sure that model numbers are just a little different from what is offered at other retailers so you can’t quite be sure you’re comparing the same item. Wait, they’re doing that already? Then I can’t imagine why it’s not working.

  32. Does it make anyone feel better that Brian Dunn, the ex-CEO who was screwing a 29 year old employee received a $6,600,000 severance package?

    Screw your staff, screw your employees, screw your investors and screw the public.  Prostitution does pay.

  33. ” it freely admits that everyone uses it to check out gadgets they then buy cheaper online—but hasn’t found a way to turn the tide. [BBC and Dealnews]”

    I would think the solution would be, you charge the manufacturers for displaying and showing off their products. Duh.

    1. As an employee of Best Buy, I can tell you with dead certainty this has been done for years, and it is by no means capable of turning a profit.

  34. After-sale service is the only reason I’d pay more, and Best Buy’s “service” is actively hostile and rude, and resolves the problem slowly, with much resistance and argument if at all. If I get a DOA product from Amazon, I get a polite, easy return procedure that takes about the same time.

    As for the “showroom problem”, they have created so much ill will that I think people relish screwing them over. I’d feel guilty about doing that to a place like Barnes & Noble, so I don’t. Although a shadow of the former Borders, B&N generally has friendly people who try to help, so I buy in-store. 

    Shout-out to pre-KMart Borderians!

  35. I, too, avoid BB like the plague, BUT I did buy the extra warranty once.  It was an early Casio Windows-based PDA.  I left it in a coat pocket, hung the coat on a chair and someone stepped on it and broke the screen.  Anyways, I took it back and they no longer had that model, so they gave me the latest model.  Awesome.  Though I have never purchased an extended warranty since.  Funny that.

  36. I wonder if Amazon has concerns or data about the other direction — if Best Buy starts shutting down stores do they see any effect on the purchasing habits of the local areas?  Maybe people are less likely to buy if they can’t try a product?  Or maybe they are just as likely (or more likely) to buy from amazon but more likely to return?

  37. I did make a couple of major purchases there a couple of years ago or so–an XBox and flatscreen TV, both loss leaders during the holiday shopping season–and, as mentioned above, have had a good interaction with a staff member not too long ago who was one of the few (and increasingly-rare) older staff there. That having been said, on the rare occasion when I go there now, I’m shameless about checking both the ratings and the prices on Amazon, and if I can’t find something myself in less than five minutes I don’t even bother to ask. I can’t believe that I thought of seeing if I could get a part-time gig with the Geek Squad at one time; if not for them in particular and BB in general, I wonder if The Consumerist web site would even exist.

  38. Here’s an idea.  KILL Geek Squad.  Seriously.  Their negative image does nothing but hurt your brand.  Kill off appliances, or at least minimize them to smaller parts of the store.  Then, go back to your roots…do you even remember your glory days?  I do.

    I remember walking around in your store and listening to all sorts of new bands, and buying music for cheaper than Target or Sam Goody (I’m old) sold them for.  I remember walking through your computer section and seeing a wall of computer cases, and monitors, and even tiny little screws or connectors.  I remember seeing your car stereo section, or TV section and knowing it wa scheaper than lots of other big box stores.  You can still be that way.

    Ride the wave of (re)growing PC enthusiasm, and sell parts and connectors of every kind.  Microcenter does it, and generally for much cheaper than you do.  Close a few stores and consolidate into a few BIG stores.  Reorganize the TV section and for GOD’S SAKES GET RID of crappy know-nothing sales people.  No, i don’t need a $150 HDMI cable.  I need an HDMI cable that can be found for $8 online…but I’d pay $10 for one I could buy NOW, in a pinch.  Stop pushing Monster products on everyone.  Don’t lie about quality vs commission.  Ditch the “marketplace” offerings online, or offer the ability to buy them with gift cards IN STORE too, in case people dont have their own credit card to buy online.  Sell MP3’s or burn them DRM free to a disc. Makes Games/Music/Affordable Home Theater the focus again. Make the deals that need to be made, and maybe don’t aim to beat Amazon, but aim to beat Sears/Wal-Mart/Costco/Fry’s in pricing, and become the best big box store you can be

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