Best Buy Chairman and Founder Resigns Ahead of Schedule

lightbox32 writes with the news as carried by MSNBC that "Best Buy's chairman and founder Richard Schulze has announced his resignation from the board of directors Thursday a year ahead of the planned transition at the helm of the struggling retailer. The resignation of Dunn and Schulze come after Best Buy reported a quarterly loss of $1.7 billion after same-store sales dropped 5 percent." This sounds like a bad omen for people who get their electronic fix there. For all its imperfections and limited range, when I'm looking for computer stuff new, at retail, and in person — meaning it's not at the Goodwill and I need it right now — I'm usually glad to be near a Fry's location. What brick-and-mortar stores make sense where you live?

Comments

He escaped

[fustakrakich]

Good move.

What's bad for Best Buy is good for local stores?

[Gordo_1]

I dunno, could we see a renaissance in local computer shops as a result?

Micro Center

[a_nonamiss]

If you're lucky enough to live near one. They provide the "I need this thing right now" fix, while matching NewEgg's prices. Their sales people aren't perfect, but they're generally a tick or two above the TV salesman at Best Buy. You can't buy a washer/dryer combo there, but I count myself as fortunate to live near one. They're always busy, so I truly hope they're making money.

Geeksquad protection + credit cards

[Billly Gates]

Maybe if they did not obsess over metrics written by some MBA by hounded customers on geeksquad protection plans and credit card sales there would not be any drop. I went to a job fair yesterday to get some extra part time work under my belt and all the retailers are doing this. At JCPenny you can not be a cashier unless you have experience selling credit cards at 25% to poor people and that is the only metric that follows.

With 1 trillion in debt people are no longer consuming because of shady deals like this are strangling their customer base for those who are dumb enough to use them. Geeksquad is a ripoff and it is so annoying when all you want is a job.

The upper management are really clueless and they make sure all mice and keyboards are wireless only because they can then bundle geeksquad protection plans. IT is just an insane customer experience when you want a wired gaming mouse and they can not even carry it.

Re:Geeksquad protection + credit cards

[rgbscan]

I did a holiday stint at clothing retailer last year for the discount and to make some holiday cash. Cashier's were required to finagle 11 new emails - that's new, never before collected emails, and 2 approved credit cards per shift. Those that made the goal got to stay on permanently. Those that did not were not offered a permanent position. The store was going to try again with the next batch of temp workers around easter, than again during back to school.

Customer survey scores only mattered if you routinely got negative scores. Bagging well didn't matter. Speed at the register didn't matter, in fact you were encouraged to slow down the line and were trained with all kinds of "countering" sales lines to say to people that declined the credit offer. Going slower gave you more time to work them over. You were supposed to keep trying until the customer firmly said no (basically when they reached the point of being pissed). They even had little charts and tables taped to the cash register so you could quickly estimate they 15/20/25% off so you could tell the customer that even just applying for the store credit card would save them 'x' amount of dollars right now on this purchase. The store talked a lot about advancement opporunity and growth through store provided training, but it was all just sales hype videos.

So don't get mad when they hound you at the register.... their job depends on it. Even if it is exactly the opposite of what you actually want in a retail experience.

Re:Geeksquad protection + credit cards

[Billly Gates]

Yep, and I will go elsewhere for my business. Then the MBAs and CEOs can all be dumbfounded on why sales are down and customer surveys say they prefer competitors instead.

They are a retailer and not a bank so if they want to devalue their retail operations go right ahead. idiots

One good one

[Anonymous Coward]

What brick-and-mortar stores make sense where you live?

Not many honestly. We don’t have Fry’s here in Nova Scotia (Atlantic Canada). A basic rundown of the geeky stores in my area:

- The source (basically circuit city/radio shack) go there if you want to have a teenager try to sell you a big screen TV or a high end power cord made by monster cable.

- Future shop (basically best buy but the employees are on commission which makes shopping their support annoying). They are basically the place to go for cables (they have monster cable too... but they also have reasonably priced stuff), memory sticks, or if you really need a hard drive.

Those are the “mainstream” ones. We also have some smaller local shops:

- Greenlyph / robotnik ... small hole in the wall computer shop. Very shallow inventory. Rarely have what you want in stock.. so they have to order it for you. Sometimes worth it to get a case or other heavy item through them.. but for the most part may as well buy online. Greenlyph is also really bad when it comes to getting back to you on parts coming in. They actually lost my business because of this. Very annoying to call for an estimate on when something might be in and finding out it’s been sitting there for 3 days.

- Jentronics – This is the one positive one on the list. Local electronics (resistors, diodes) shop. Great people who know their stuff. More expensive than digikey or mouser... but I still tend to shop their first. This is how you compete with the big online guys. By accepting you can’t beat the prices or selection and focusing on the service. They don’t try to up-sell me there... in fact they’ve down sold me a few times (“that’s overkill.. this would work”). I go there because I _enjoy_ the experience of browsing the isles and talking to the staff there. I avoid future shop because I can’t walk down an isle without 3 commission hungry kids attacking me (and then when I find something.. they want me to check it out immediately so they get credit for it..).

Salvation

[Sarten-X]

Here's an idea that could definitely save these retailers.

People need entertainment, right? And they want something they like, right?

We'll hire a bunch of college kids, call them the "Media Squad" and have them review movies, video games, and music, and recommend them based on each customer's particular tastes. By sheer coincidence, they'll recommend things most that are brand new, and stuck with a high markup. To prevent the kids from getting any silly notions like recommending Hulu or other things we don't make profit on, we'll give them sales quotas.

What could possibly go wrong?

local store

[SebNukem]

I put on my hat, replace my wallpaper with a high res picture of the brick wall, and head off to newegg.com.

An interesting comment near the end of the article

[guido1]

"I continue to believe in Best Buy and its future..." Schulze said in a statement.
followed immediately by "Schulze also said he was exploring options for his 20.1 percent stake in the company." and an accompanying article from here

Looks like he's getting out as much as possible now.

Hurray for Microcenter?

Re:I don't go to Fry's often due to their return p

[spire3661]

Anecdote is anecdote, but I have never had an issue returning stuff to Fry's, My volume of sales is pretty high, they can see it when doing the return and im sure that reflects how they handle my requests. My only issue with Fry's was when i returned something as defective and I saw the kid put it in the "return to shelf' bins. I had to remind him that I was returning it as manufacturer defective.

The Internet doesn't have a tactile showroom

[tepples]

Probably not because they have to compete with the Internet too.

The Internet doesn't have a showroom that lets me touch the keyboard of a laptop or smartphone before I buy it.

Re:The Internet doesn't have a tactile showroom

[Yosho-sama]

Yes. The quality of the trackpad and keyboard matters. You're going to be using this device probably daily for years. It's good to know how it feels ergonomically, plus it's good to get an idea of the weight and size.

Re:What's bad for Best Buy is good for local store

[Billly Gates]

Best Buy wasn't always so bad.

Circuit City was poorly managed and loaded with debt. It is not the internet per say, but rather management losing their focus. BB had its doom when it acquired GeekSquad. Since it was a ripoff and such a high margin they strong armed their managers into making sure it was bundled with every computer since customers would have to use it anyway etc.

Then the warranties could only be serviced at geeksquad. Then components were geeksquad insured. Then the cashiers were required to meet quotas, now BB wont even sell gaming keyboard and mice because they are not wireless which means no geek squad protection. Even their car audio and home entertainment installers are called geeksquad and are pushed. These are not real computer geeks

Now they sell things people do not want because they can bundle geeksquad, customers get hassled as employees need to piss people off just to keep their jobs, their greed makes them sell expensive things so you are more likely to buy a geeksquad protection. Their credit cards are a terrible deal too and they are hitting on those.

They lost what they are known for and that is great products at a reasonable price. Metrics can ruin many companies and CEOs who chose other lucrative markets devalue their assets. They are a retailer and not a computer shop.

! wonder

[JackSpratts]

Did they inspect his bags before he left?

Re:I don't go to Fry's often due to their return p

[cpu6502]

There are ways around stores that refuse to issue a refund on a broken item:
- Put the item for return in an envelope w/ delivery confirmation.
- Mail it back to store.
- Wait 30 days and then call the credit card company & file a dispute that you returned the item but never received a refund.
- CC company issues refund.

Best Buy and their mis-steps (IMHO)

[King_TJ]

I agree with the previous poster about GeekSquad really hurting the company.... but at the same time? I have at least 4 Best Buy stores in my area and still found them convenient on occasion, even completely ignoring the GeekSquad aspects of the business.

What I think really contributed to their decline was an overall floundering.... a loss of sense of who their customer really was and what he/she really wanted.

For example, one of our stores here (Crestwood, Missouri location) slowly cut back their selection of products over the last couple years. First it was their computer section shrinking, eliminating multiple aisles of software titles. (Somewhat understandable with so much going to online download purchases, but still premature, IMO, when there were so many Windows PC users who still wanted a one-stop place to view all the latest game, educational or application titles and grab one to go, with no hassles.) Then they started eliminating all the desktop PCs, trying to only sell portables. Next, the home audio section shrunk, and even the little corner of the store for car audio got to the point where every time you asked about an installation accessory, it was something they "could order for you" but never had in stock. It's abundantly clear that they selected their inventory completely by some sort of computer generates sales metrics. If X number of units didn't move in Y amount of time, they stopped carrying it. Eventually, it turned them into a giant Blockbuster-like store, full of console game titles, movies and music, a bunch of cellphones, and an appliance section along one edge of the store. It still has a fair bit of TV stuff in the back corner opposite the car audio too, but let's face it. Flat panel TVs just aren't a hugely profitable item anymore. The market is pretty much saturated so people only buy to do the occasional upgrade or to replace a broken one, and the biggest innovation they're pushing is 3D; an option of questionable real value. It's no wonder this is one of the stores on their slate of locations to close!

At other, larger locations? They've tried everything from selling Segway scooters in-store, to having mini music stores within their stores, a la Guitar Center franchises. (And I'm sorry, but Best Buy has NO chance of competing with Guitar Center! Not only do they lack staff with music knowledge, but they'll never have anywhere near as good a product selection, and likely not as good of pricing either. Why even try?) And that pathetic attempt at selling boutique high-end AV gear under the "Magnolia" name? No .... just, no.

What originally made Best Buy stores memorable for me were the early days, when everything that was returned would be put back up for sale as an open box special with a 20% discount or so, and clearance tables were constantly full of managers' "red tag" sales of various items. You never quite knew what they'd have to sell you on a given trip, because they just seemed to randomly get ahold of any cool electronics gadget they could -- but they still managed to keep each section of the store well stocked with items that fit the category. If you walked in with a gift card, you walked out buying something cool, whether you had any idea what you wanted first or not.

These days, they're so bad at being a computer shop (GeekSquad service is obviously a joke, but on the retail side, you can't get anything remotely "hard to find" --- so basically just the same staple items like keyboards/mice and 1TB SATA drives that WalMart sells), they may as well bail out completely, or start doing it right again. Prices are far from being a "best buy" too. Their very name is just a reminder of their former self.