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Best Buy CEO Brian Dunn Resigns After $1.7 Billion Loss
An anonymous reader writes "Best Buy CEO Brian Dunn has resigned amid the big-box retailer's major financial problems. The announcement comes two weeks after Best Buy announced a $1.7 billion loss for its fiscal fourth quarter. Best Buy is trying to avoid the same fate as Circuit City, which went out of business in 2009, but the future looks grim." The article provides a reason not to trust middle-management: the company claims it had "no disagreements with Dunn about operations, financial controls, policies or procedures." Best Buy may not be Shangri La, but in many rural and semi-rural parts of the U.S., it's the nearest and best place to actually find a wide selection of electronics.
To be fair, he started as a $5.15/hr minimum wage employee at one of their stores and worked his way up the ladder through literally every department before being named CEO. There are many CEO salaries and pensions to guffaw at, but this guy deserved at least half of what he gets.
moox. for a new generation.
The clerks aren't just pushy - they actively lie to customers. Telling a lie to get money out of someone is fraud. I, for one, don't appreciate it.
I don't know if it was just the local branch or if its nationwide policy, but I know 1st-hand and 2nd-hand (people that worked there, etc.) that the managers were incredibly pushy on the sales reps to essentially harass customers and find out how much money they had, then upsell as much as possible. Especially for people obviously not knowledgeable on the topic. If you didn't push the more expensive version or the extended warranty or whatever, the managers came down hard on you. Terrible environment. I refuse to ever shop there again.
I am from one of the more rural parts of the US. There's a few issues with Amazon:
1) Most users aren't comfortable buying parts online - they want a salesman to tell them exactly what to buy
2) Rural FedEx/UPS/USPS drivers tend to be much more careless with handling packages - probably due to having much longer routes through places with no cell service and no intersections to use as points of reference for directions. It's also much more common for rural houses to not display house numbers... or even have them in the first place.
3) I can drive to Best Buy and buy a replacement part and have it installed the same day. Gas will probably cost around $5-$7 for the round trip. Buying stuff online will often cost the same for basic ground shipping (free shipping is usually very slow) and then you have to wait several days for it.
Amazon/NewEgg/Tiger/ZZF/etc are great if you know you need something in advance and the carrier can actually find you, but they're not the solution to every problem.
This is common in all retail. Managers are under pressure from the people above, and many have their salaries tied in to sales from their store.
One of the best techniques I've found for getting rid of salespeople is to first ask them highly technical questions that I know they can't answer about their products, and if they still persist, I tell them to leave me alone while I shop or else I will leave the store without buying anything. That latter almost always works.
Only sales people that I've had trouble with past that generally are car salesmen, who've even tried the technique of blocking the exit driveway with staff so I couldn't drive off. I saw their block, and raised them a 4x4 through the hedge row. Shoulda seen the looks on their faces...
Do not look into laser with remaining eye.
Your boss must really hate you.
He got $10 million in compensation in 2010, and he's still on the board of Dick's Sporting Goods. So he's not suffering at all.
http://people.forbes.com/profile/brian-j-dunn/11391
While I appreciate the romantic notion of a company's CEO starting off at the bottom and working his way to the top, I wonder if, in this case, Dunn brought the worst of his experiences to the top with him instead of the best. It seems that the higher he went, the more the company got in trouble. This is a company that really needs an outsider to go in, define what Best Buy is going to be in this new retail world and how it will succeed, and get everyone in the company involved in that direction.
As timothy says, "Best Buy may not be Shangri La, but in many rural and semi-rural parts of the U.S., it's the nearest and best place to actually find a wide selection of electronics." That's great for Best Buy, but that can't be the driver for this company to stay in business. They've got to fix the problems they have, and fast, because everyone else is eating their lunch. Other than take up space, there's nothing they do better than anyone else.
That depends. Standard FedEx will deliver anywhere, but Standard FedEx is actually owned by FedEx. FedEx GROUND is franchised out and can be very hit and miss. My house is 60 miles from the nearest FedEx Ground depot. They've lied so many times about attempting delivery that I actively avoid any company that uses FedEx Ground for shipping now.
Only sales people that I've had trouble with past that generally are car salesmen, who've even tried the technique of blocking the exit driveway with staff so I couldn't drive off. I saw their block, and raised them a 4x4 through the hedge row. Shoulda seen the looks on their faces...
Car salesmen do tend to get upset when you drive their car off the lot without paying for it.
My company home page
"Best Buy may not be Shangri La, but in many rural and semi-rural parts of the U.S., it's the nearest and best place to actually find a wide selection of electronics."
As Yoda says, "that is why you fail". The fact is, there's almost no middle anymore. Bottom of the barrel electronics have gotten good enough that low end buyer buy almost exclusively on price. High end buyers have the awareness and ability to comparison shop online for yet a wider selection at better prices. Best Buy loses the first group to Wal-Mart, and the second to the internet. And the in-between isn't big enough to make any money on.
Unfortunately, this seems to be the way things are going. There will be one or two "retailers" left on the Internet which will be in unassailable positions because of heavy discounting on freight and committments from suppliers. Buying anything locally will be an option fondly remembered by grandparents and a concept utterly foreign to the next generation.
Why will there be only two? Well, Amazon ships with UPS and UPS charges them so little based on volume that they can make money offering free 2-day shipping. Should some new player come along they aren't going to get discounts like that until they have a huge volume, which means their prices will be higher, meaning they aren't going to get that huge volume. Same thing with suppliers: if you buy 1,000 TVs from Samsung they give you a different price than if you buy 100. If you sell 1000 a week you are going to be buying a huge number - maybe more like 10,000 at a time - and get such a better price that they new start-up can't ever get that good a price.
So what do we have now? A monopoly. Mostly driven by the Internet and the way shipping works in the US. Best Buy had their own fleet of truck for distribution so their costs were quite different than using UPS or FedEx. The idea that some new startup can come along - as Best Buy did - is pretty much gone. The market is closed to new entrants. Would there be room for two such distributors? Maybe not - we might end up with only Amazon as the big retailer in the US and WalMart for low-end stuff. We can all see that the small independent seller is doomed if they haven't already closed up shop now. WalMart put those folks out of business a long time ago.
You can certainly say that Best Buy failed in providing customer service, but we are seeing a passing of a lifestyle. We are also seeing an interesting phenomenon whereby more and more things in people's daily lives are being supplied through a single source. Did you know there is only one factory in the US making glass bottles? If one can do it, why have more, right? Except it is a single point of failure and there are many substances that a glass bottle is required for. If that one factory has a fire or some other accident the entire US is without glass bottles for perhaps a very long time. With retailers being eliminated we are focusing more and more on online retailers and two shipping companies - of which there will only be one in the end. When it is only Amazon and FedEx (far more diversified then UPS and therefore the more likely one to survive), what happens if there is a strike against FedEx? Well, it means people stop getting stuff. When it is WalMart and Amazon alone and everyone is getting food, clothes and everything else through these channels what does it mean?
One big thing it means is that if the buyer at WalMart doesn't like some supplier, their stuff isn't getting sold in the US. It means decisions that consumers get to make today are then made by the buyers for the retailers that are left. If the buyer doesn't choose it, the consumer can't choose it. Period.
Oh, you think "the long tail" will solve this problem. Not really. There will be only a few retailers because the dynamics of an online store are quite different from opening a little shop on Main Street. It is already pretty much impossible for an upstart to compete with Amazon today and it isn't going to get any better. Which means if Amazon doesn't strike a deal with a supplier - on Amazon's terms - their stuff doesn't get sold. Manufacturers are ill-suited to sell things directly, so that isn't really an option. Neither is Amazon going to take on a new product that completes with an existing high-volume product unless they get a really good deal - why trade dollars for pennies? This puts Amazon in control of what brands of toothpase you get to choose from - you will not have the option of going to a different store.
Pretty sad, isn't it. At least it isn't the government making these decisions for us.
My problem with Best Buy is that it's such a painful experience to shop there.
The last time I was in the store, I was there on release day to buy a Kindle Fire. The saleskid made two strong attempts to persuade me to buy $200 beats headphones, like the ones he was wearing around the store, to compliment my $200 tablet. Then of course you have to contend with the hard sell on the warranty and any number of other add-ons. And heaven help you if you're buying a large electronic device, especially if you aren't all that tech savy. They sent my parents out of the store with $200 of tack on Monster nonsense. Basically, taking advantage of old people.
Best Buy needs to make their shopping experience not akin to a trip to the dentist. Stop with the aggressive push for add-ons. Stop with the gun to the head warranty pushes. (You can buy an extended warranty on a CD, did you know that?) Work on customer service. Fire the disinterested teenagers. Reward knowledgeable stales staff. Develop knowledgeable sales staff.
Basically, stop being what most people think Best Buy is. Start being what Amazon is - an easy, convenient, stress-free shopping experience.
Best Buy needs to make their shopping experience not akin to a trip to the dentist. Stop with the aggressive push for add-ons. Stop with the gun to the head warranty pushes ... Fire the disinterested teenagers. Reward knowledgeable stales staff ... Start being what Amazon is - an easy, convenient, stress-free shopping experience.
Not to defend Best Buy here, but these things are not necessarily compatible with cheap prices in a big-box physical retail environment. For example, all the stores I visit with cheap prices try to upsell the high-margin junk so they can make money. All the stores I shop that have knowledgeable sales people and good customer service - think Nordstrom's - aren't cheap. Amazon has cheap prices and no pushy come-ons but they also don't have to pay for retail space and sales employees. It seems that you can have physical stores, good customer experience or cheap prices but not all three.
"95% of all Slashdot
If you aren't willing to pay decent (commissioned) sales staff, why have a sales staff at all?
Why not just be like Target, and have few or no salespeople? It's not like the staff at Best Buy are helpful or knowledgeable, they are one of the primary reasons people avoid the store.
Tell their execs to go to an Apple store and ask themselves why many people like going there. The experience of dealing with store employees does not feel like I've walked onto a used car lot with a sales guy waiting to eat my lunch.
Best Buy is strictly non-commissioned. I worked there for a year when I was in high school at a store opening, and they made sure that the first thing we said to shoppers, with exuberant pride, was "Just so you know, everybody at Best Buy is not working on commission so we're only going to sell you what you need and never what you don't!". What we didn't say, which is actually the truth, is "... but we do need to give you the hard sell on product service plans (fancy words for extended warranties) or we'll get fired, and that guy hovering over there is our manager who is only listening to how well we can sell one to you". If you worked in the home theater department (I was in PC home/office), add high margin cabling to that.
Those of us who weren't naive knew we were being screwed. The only reward for pushing these products was job security and it's all so we could emphatically tell customers a lie: that we wouldn't try to sell them things they don't need.
This was 13 years ago, too... back when Best Buy was a much better place. I'm sure it's only gotten worse in recent years.
If you worked in the home theater department (I was in PC home/office), add high margin cabling to that.
And here is why I don't shop at Best Buy. It's not that the sales people were trying to sell me a high end cable. It is the fact that there is no HDMI cables in the entire store for less than $30. Sorry, but I will not spend $30 on any cable, for anything, ever! I don't need gold plated HDMI cables for my less than 40 inch TV.
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