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The Gradual Death of the Brick and Mortar Tech Store
Cutting_Crew writes "As we all know brick and mortar stores have been closing left and right recently. We had CompUSA, Borders and Circuit City all close their doors within the last 4 years. According to an article on Forbes.com, it is spelled out pretty clearly why Best Buy is next in line to shut its doors for good. Some of the reasons highlighted include a 40% drop is Best Buy stock in 2011, lack of vision regarding their online services, management too concerned with store sales instead of margins and blatant disregard for quality customer service."
They have no concept of the competition that Amazon represents. They think in store purchases will keep them alive. They need to:
1. Fire half the staff, and only hire professional sales people (Not 30 seventeen year olds)
2. Reduce the store size by half or more.
3. Reduce prices by having less selection but enjoy the bulk purchase price point.
4. Stop high pressure pushing of accessories and service plans on people.
5. Work with vendors to have exclusive items made for them not found online (like a white or pink dyson)
Still doomed by their horrible reputation.
Because you can not go online and buy an apple product for 60% price of buying it in the store.
It is that apple control thing working for them.
See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
When there's Newegg? I mean, honestly: $25 USB cables and re-boxed returns vs easy return, no tax and better prices (even including shipping).
Radio Shack these days is a shadow of it's former self. I went there with my dad as a kid, and remember shelves full of electrical and radio crap that I couldn't even comprehend. I went in there for the first time in ages about 3 years ago.. holy crap. It looked more like an AT&T store than the Radio Shack of old. People were lined up to pay their phone bills, and the walls were lined with cell phones and MP3 players and whatnot. Only in the back corner were any sort of electrical components, and nobody could really help me find what I was looking for. It's almost as if someone bought the Radio Shack name, and slapped it on a completely different store...
you are probably a hedge fund guy, or friends with a hedge fund guy, or some other type of person who makes money by buying and selling big chunks of other people.
you see a story about an electronics retailer.
they see a story about an opportunity to short sell or buy credit default swaps against a company's debt. imagine if you are sitting at a poker table and instead of chips you are playing with coins that each say '1 million dollars'. you can start to get an inkling of the mindset here. you dont care if the other people at the table are nurses, waiters, hairdressers, authors, poets, politicians, soldiers, etc. all you care about is what is in their hand, and which way the game is going to go, because you can get rich off of it, but more importantly, you can get the high you get from winning. thats what the "their stock price is down" thing means. it doesnt pretend to have any intelligent commentary on cause and effect. its poker information for poker players.
I think people will pay a little more if they have a better experience. Stores have forgotten that, and like the failure of all those who tried to compete with Wal Mart on price, they lost. Retailers can't compete on price with the online retailers, even with sales tax (which is a nightmare of logistical nonsense just waiting in the wings)..
Retailers need to stop focusing on price and margins and wonder if there is still such a thing as customer loyalty. I don't know if there is, but companies like Best Buy don't seem to give a shit about trying. If it doesn't work, it doesn't work... but for fuck's sake, how can these companies make the SAME EXACT mistakes that their dead competitors make and expect to come out on top, or even alive for that matter? It's like watching monkeys throw shit at each other. It's funny, but you don't want to get any on you.
It's the Stay-Puft Marshmallow Man.
They also tend to have stuff in stock, and for many items (printers, monitors) working items you can examine. Why would you go to a store when you could order online for much less? Three good reasons
1) You want it now
2) Shipping cost overwhelms the price difference
3) You'd like to take a look at it before buying it
But most brick and mortar retailers mess up _all three_. They won't carry much and what they carry they won't keep in stock, so you have a good chance of not finding what you want. For things where shipping cost is significant (e.g. cables), they'll carry only ridiculously-priced brands so they're STILL more expensive than ordering online + shipping (even for one lousy cable). And if they have any samples out, they're often obviously broken, and usually not actually working.
TFA talks about loss of control over margins at Best Buy. Apple Stores are known to have some of the highest margins in retail. Their success demonstrate that people are willing to pay high margins for products if they feel they're getting good service for it--which is certainly not the Best Buy experience.
Also, it's rarely the case that there is a large advantage to purchasing an Apple product outside of their stores, due to their extensive price controls at all retailers. As you can also see from that chart, Apple makes an ever higher margin for the products they sell online. They could adjust their price to match the lower overhead and sell them cheaper direct. The fact that they don't is an interesting component to their overall strategy.
Yet Apple can't seem to open stores up fast enough. Go figure.
That's because Apple stores are not electronics stores. They're fashion stores that happen to sell electronics.
I was raised on the command line, bitch
"Nemo me impune lacesset"
What Brick-and-mortar store can hope to compete with the internet for commodity-level components? It's not even fair to hope they would. I mean, cmon - Best Buy stocks even-further-overpriced Monster Cables as their entry-level cable. I don't fault the Shack for seeking higher rungs on the value chain. And I'm hardly a fan of either the Shack ("You have questions, we have blank stares") or Best Buy ("Best means most expensive!"). But, I do fear for the complete loss of generalist tech stores. A book is a book is a book, but when deciding between tablets or notebook PCs, or the like, actual interaction with the device answers a gazillion questions that don't seem to have answers on websites.
Returned Peace Corps IT Volunteer
"Amazon showroom" ?
And I think you just nailed why these stores are going down, its a total crapshoot as to what kind of service you're gonna get. for electronics in my area we have two Best buys and a Staples. Now the first best buy, the farther away one naturally, actually has helpful staff, will help you find what you are looking for and if you seem interested in a new PC they will often throw in a little swag just to seal the deal, like a sleeve for that netbook or a little bookbag to carry your laptop, its just little stuff but it does make you feel better about buying there. Now the closer best buy is like a ghost town, if they didn't have RFID tags you could carry off half the store without ever seeing anybody. and if you do see an employee they do this almost comical trying to pretend they don't see you, this "Quick! look the other way and move at a brisk pace away from them!" kinda thing. And the staples? God that store is total crap. there is NOT A SINGLE THING on the shelves they will sell you, not one, its ALL bait and switch. that printer? that monitor? laptop? desktop? anything? all you get is "Nope outta stock, but we do have" and they will point out something that is nearly double the price. and that is of course not counting the fact that their prices sucked to begin with, but i guess a 40% markup isn't enough for the manager of that location, its 70% or nothing. No wonder their parking lot always looks like the place is abandoned.
So frankly i don't blame people for just not buying offline, frankly even if the price was a little higher I'd rather deal with amazon. with amazon i have a problem and its "No problem, we'll fix it" and its hassle free. When my sister bought some books and they just disappeared thanks to the thieving local post office (tracking showed it getting there then nothing, just gone) they never said a word other than "We're sorry we'll fix it" and had new replacements shot out there by fed ex in just two days. When i ordered a PC case that ended up looking like it was used as a tire chuck they said 'Don't bother sending it back, we'll send you another one" and there it was, no muss or fuss. Between them, Newegg and Tigerdirect I rarely even shop local for anything other than groceries anymore and even though the prices ARE cheaper online even if they were 20% higher I'd still buy thanks to hassle free shopping. Maybe if the shops would take a "customer is always right" attitude about service instead of having such high turnover and taking clueless workers because they are cheap maybe their business would go up.
ACs don't waste your time replying, your posts are never seen by me.
Huh? Basically everyone there can check you out. What's impossible to find is cash registers because they don't have them. Or maybe they have one tucked away. But most transactions are done via credit card, and every employee has mobile devices which can help you check out.
Not to mention the fact that if you have an iTunes account and their store app, you can actually self-check-out without talking to anyone, except to maybe show the electronic receipt to someone on the way out the door.
It's easy to shit on Apple, and clearly it's fun, because lots of people do it. But to say something like "actual sales are secondary" in the face of outrageous success on their part is just pure silliness. It's not like people are just pointing to foot traffic and calling them a success for that--although that is one of the metrics getting played up--it's about dollars per square foot, and love them or hate them, they are indeed making more dollars per square foot than pretty much any other retail establishment.
If actual sales are secondary, then their success at whatever you think their primary goal is must be absolutely stellar.
The CB App. What's your 20?