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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."
Thank god we still have Radio Shack. I went in recently and found they were even selling arduinos. I've bought a bunch of components there for my electronics projects. It's not Fry's, but at least there's one 10 minutes away from my home in Nowhereville Vermont.
-73, de n1ywb
www.n1ywb.com
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.
Margins are very low on electronics. You had to move a lot of product to keep a brick and mortar electronics store afloat even before the Internet and Walmart became such huge competitors. Quite frankly I rarely go into them any more. I find even taking shipping into account that I can find better deals online. I haven't bought an actual computer from a brick and mortar store in seven or eight years.
The world's burning. Moped Jesus spotted on I50. Details at 11.
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).
Ummm.... doesn't Microcenter count? Guess not according to Forbes, because in 2006 they had 19 stores, 20 in 2007, 21 in 2008, and in 2012 Microcenter has 23 stores. Sure that's slow growth, but still growth none-the-less, and they're much better than CompUSA, Circuit City (is Circuit City "tech"?) and Best Buy because Microcenter actually has competitive prices.
Want a new MSI Geforce GTX 580 video card? $500 from Newegg, $520 from Microcenter. Think I'd just pay that extra 4% to have the card TODAY and have a local shop to return/exchange it to if there's a problem and judging from the 13% 1-egg reviews I'd there is a good risk there could be a problem.
my karma will be here long after I'm gone
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.
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"
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Let's not forgot that this is the same place where if you go in citing a price on their website they will pull up an intranet site that is a clone of bestbuy.com with different prices to "prove" you wrong. Getting busted for that was the end of me shopping there.
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"Amazon showroom" ?
I think people will pay a little more if they have a better experience
That same statement is made, instead ending with "to support a local business" or "to buy an American-made product" or "to support a good cause". But in the end it's just words, words that most often are not backed up by action.
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)..
The problem is though - and anyone who works in retail can tell you this - customers walk in to the store and if it isn't something they need right away (and even some times if it is) they'll say "I can buy it for less through [random fly-by-night online site that's been up less than a week]". So the retailers have to be aware of their online competition and at least put up a good fight on price.
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.
I'm moderately happy with their rewardzone program. Granted I live in a place where there is no alternative for electronics if I can't wait for them to be shipped, so they have me in somewhat of a bind.
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?
Because they all get lead down the same street. They all face the same customers.
The real tragedy, though, is that they all promote the same kind of shit-for-brains thinking to upper management. Not only do they push the stores to select for the least knowledgeable (and hence least expensive on payroll) employees, they also strive to give their employees as little power as possible when dealing with customers.
Quite honestly, many of the employees at Best Buy couldn't give you good customer service even if they wanted to, as they simply are not allowed to do such a thing. I saw the same thing as an employee at CompUSA and now I can see it in the employees at Best Buy with myself as a customer.
Damn_registrars has no butt-hole. Damn_registrars has no use for a butt-hole.
As a former employee at Best Buy, I can tell you exactly why they make it difficult to buy that stuff. The three big times in the year are Chirstmas, tax time, and back to school. The seasons around each of these events takes up around 70% of the year. In that part of the year, there is only a finite number of an item available at the store you are at any given time. Best Buy will sell out of the hot laptop that everyone wants. Frankly they don't want you buying it if you don't buy the additional warranty or accessories or whatever. If you don't buy it, someone else will. I'm convinced that corporate would just rather have you shop somewhere else. They get shipments twice a week, but there is a million different variations that the public demands so it's hard to keep all of the stock flowing to the exact right places, so it's easier to make it a difficult experience for the grab and go customer who just want to buy four of the laptop with a $5 markup and leave none for customers who might potentially want to buy other items to go with it. Contrast this with Amazon, where they can ship your item from anywhere and it makes little difference to the customer. Best Buy has a pretty decent store transfer and warehouse ordering system, but customers often refuse to wait as they have waited until the last second to buy a gift and only budgeted for the laptop that has been on sale the last six days.
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.
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