Electronics Retailers Scramble to Adapt to Changing Market

[Shadow]

Looks like we are losing about 50 Best Buy stores pretty soon....

Even as Best Buy insists it can get out of its current predicament, competitors are circling, as everyone tries to prove one point: that electronics stores can thrive. Best Buy is closing 50 of its big-box stores, and its sales at stores open at least a year are falling. Brian J. Dunn, its chief executive, recently resigned after the board found (http://www.nytimes.com/2012/05/15/business/chairman-of-best-buy-to-step-down.html) he was having an inappropriate relationship with a subordinate. Richard Schulze, who founded the company in 1966, said this month (http://www.nytimes.com/2012/06/08/business/best-buy-chairman-leaving-early.html) that he would leave the board immediately, a year ahead of schedule, and is trying to sell his 20.1 percent stake in the company.
Now, Walmart is running ads going after Best Buy consumers; a Chicago-area competitor is expanding amusement park attractions in its store to lure shoppers; and Target is selling Apple products — all in an effort to make buying electronics in a store appealing again. The trends are not favorable. People are increasingly buying electronics online, even if they go to stores to examine product features. The price of televisions is sliding, and CDs and DVDs are not nearly as popular as they once were. Retailers are stuck with lots of space as products shrink or go digital. And because many manufacturers are not allowing retailers to advertise below minimum prices for their products, stores cannot publicize sale prices the way they once did.

Sales at physical electronics stores have declined an average of 2.6 percent a year in the last five years, according to the market research firm IbisWorld. Sales of electronics online have risen an average of 14.7 percent a year in that period. Chains like Circuit City and CompUSA have collapsed under the pressure. (CompUSA has been revived in some locations.)

So the stores that hope to survive must change.


http://finance.yahoo.com/news/electronics-retailers-scramble-adapt-changing-171606091.html

[mundame]

Yow, I wonder if our Best Buy will close! We go there a lot though we hardly shop in brick-and-mortar stores at all anymore; I get most of what I buy sent direct from Amazon.

"Showcasing" is what they call browsing in stores to see what's there and then ordering it from the Internet. At half the price. Constant articles in the Wall Street Journal about this problem. I don't mean to, but I do it myself, I realized --- I used to leave Barnes and Noble with a great pile of books and over $100 poorer whenever I went, and now sometimes I only get one or two books or even none! I use Amazon instead, and they deliver free.

I bought a game system at Best Buy (Xbox 360) and several games and whatever books they had to go with the games, but they didn't have them all; a nice young salesguy whispered to me, "you can find them at Barnes and Noble" but they didn't have them all either and their salesperson said, "Try our online store," and I realized ----------------- Amazon. They've got everything.

So I bought SEVERAL more games and books from Amazon, and THAT is how our Best Buy-type stores die!

Merchandizing is changing big-time. For example, take the catalogs I get in the mail. I browse thru Great Courses --- and look for them cheap on eBay. All the new books they want you to join a club for or catalog shop --- I go thru the catalogs carefully and circle what I want and then get on Amazon and put samples of the books on my iPad Kindle app. I KNOW lots of people do this, because when the women's book catalog Bas Bleu comes out, lots of the other books in the catalog pop up on Amazon in the "people who searched for this book also bought...." selections at the bottom of the screen.

This practice will run all the catalog companies out of business as well as brick-and-mortar stores --- Sounds True, that sells spiritual books and tapes, just did close their catalog operation. They are trying out Internet-only. Maybe that's the solution.

[Shadow]

Yow, I wonder if our Best Buy will close! We go there a lot though we hardly shop in brick-and-mortar stores at all anymore; I get most of what I buy sent direct from Amazon.

"Showcasing" is what they call browsing in stores to see what's there and then ordering it from the Internet. At half the price. Constant articles in the Wall Street Journal about this problem. I don't mean to, but I do it myself, I realized --- I used to leave Barnes and Noble with a great pile of books and over $100 poorer whenever I went, and now sometimes I only get one or two books or even none! I use Amazon instead, and they deliver free.

I bought a game system at Best Buy (Xbox 360) and several games and whatever books they had to go with the games, but they didn't have them all; a nice young salesguy whispered to me, "you can find them at Barnes and Noble" but they didn't have them all either and their salesperson said, "Try our online store," and I realized ----------------- Amazon. They've got everything.

So I bought SEVERAL more games and books from Amazon, and THAT is how our Best Buy-type stores die!

Merchandizing is changing big-time. For example, take the catalogs I get in the mail. I browse thru Great Courses --- and look for them cheap on eBay. All the new books they want you to join a club for or catalog shop --- I go thru the catalogs carefully and circle what I want and then get on Amazon and put samples of the books on my iPad Kindle app. I KNOW lots of people do this, because when the women's book catalog Bas Bleu comes out, lots of the other books in the catalog pop up on Amazon in the "people who searched for this book also bought...." selections at the bottom of the screen.

This practice will run all the catalog companies out of business as well as brick-and-mortar stores --- Sounds True, that sells spiritual books and tapes, just did close their catalog operation. They are trying out Internet-only. Maybe that's the solution.


I try not to buy CD's and DVD's online...for this very reason. It's getting harder and harder to find the CD's (not so much DVD's) you are looking for in retail stores now though. They really don't carry a very large assortment. Mainly just popular stuff. We still have a Hastings here that is pretty fun to browze through...I like going there...They have a lot Music related merchandise...rock /country t-shirts....posters...unique collectables. You would miss that kind of stuff just shopping online.

Books I pretty much only get online via a book club I belong to. Unless I happen to find something that catches my eye while out shopping.

[SassyLady]

I was in Costco yesterday and purchased a Canon printer and three books. I never use eBay or Amazon. I seem to have these thing about actually touching what I buy before I purchase it. And, if I see it in the store, touch it I'll buy it because I usually need/want it now and don't want to wait for it to be shipped.

[Gaffer]

I was reading a while back that best buy were big donaters to CAIR. I stopped shopping there. It's the islam hater in me.

[Abbey Marie]

I was in Costco yesterday and purchased a Canon printer and three books. I never use eBay or Amazon. I seem to have these thing about actually touching what I buy before I purchase it. And, if I see it in the store, touch it I'll buy it because I usually need/want it now and don't want to wait for it to be shipped.

What if you already bought one of something in the store, and want to buy a second or third, etc,? You have already touched the same thing, but not that exact one. Ok to go online then?

(Big Amazon fan, here)

[WiccanLiberal]

I stopped shopping at Best Buy when I heard about their website ripoff. Apparently they were keeping a separate website address with different prices than the site consumers were browsing outside. The shopper would come in having seen a low price on the website, ask for that price and then be shown an intranet site with a higher price. Also, until recently they had restocking fees on all returns. Pretty miserable corporate ethos if you ask me.

[Kathianne]

I stopped shopping at Best Buy when I heard about their website ripoff. Apparently they were keeping a separate website address with different prices than the site consumers were browsing outside. The shopper would come in having seen a low price on the website, ask for that price and then be shown an intranet site with a higher price. Also, until recently they had restocking fees on all returns. Pretty miserable corporate ethos if you ask me.

I loathe Best Buy. There website is a horror to navigate and I'm pretty good at it. After reading the above, perhaps that's why.

I love, love, love Amazon! I love my Kindle! Great service and fast delivery. They make good on promises, which is more than most 'brick & mortar' stores do.

[SassyLady]

I was reading a while back that best buy were big donaters to CAIR. I stopped shopping there. It's the islam hater in me.

Wow, guess I either didn't know this or forgot. Thanks for the tip!

[SassyLady]

What if you already bought one of something in the store, and want to buy a second or third, etc,? You have already touched the same thing, but not that exact one. Ok to go online then?

(Big Amazon fan, here)

I buy things on-line, just not from Amazon. And, only those things that I am not impatient to have in my hot little hands right now!

[mundame]

I stopped shopping at Best Buy when I heard about their website ripoff. Apparently they were keeping a separate website address with different prices than the site consumers were browsing outside. The shopper would come in having seen a low price on the website, ask for that price and then be shown an intranet site with a higher price. Also, until recently they had restocking fees on all returns. Pretty miserable corporate ethos if you ask me.


I'm guessing they are absolutely desperate for cash flow. That's certainly the picture the Wall Street Journal paints of all the physical stores -- sinking like a rock because of this major, major shift in merchandizing.

And this is why -- Kathianne saying, "I love, love, love Amazon! I love my Kindle! Great service and fast delivery. They make good on promises..."

Sure, that's how I feel. I use the iPad Kindle app, but I have 350 book samples on it, stored like in a bookcase with all their covers showing but quite free until the minute I want to read a book, then I download the book in seconds. And they really do deliver within one to two days and the choice is ..... essentially everything, as far as I can tell. Shower curtain, maple sugar candy, wastebaskets, whatever, I just order it from Amazon and they deliver it almost immediately. We have gone back to the future: in the old days 112 years ago women called in orders and they were always delivered. If they shopped in stores, the orders were delivered, they didn't carry bags. I just reread "Looking Backward" by Edward Bellamy, 1888. In his scifi Year 2000, everything was delivered to homes -- by a hydraulic system, like banks use now.

Amazon has taken us back to a much easier age where shopping is concerned. I HATE store shopping, always have, so I'm happy as a clam.

[Shadow]

I buy things on-line, just not from Amazon. And, only those things that I am not impatient to have in my hot little hands right now!

It would never even occur to me to buy electronics online. I am like you...if I want them,I don't want to wait. Plus,I have found several good deals around town so I never really worried about that either. I have purchased things at Best Buy in the past. But that's not really the first place I think to look and the location in not very conveinient either. Sadly I probably won't even miss it,even though I hate seeing big stores like this go out of business and putting people out of work.

[Noir]

I buy almost exclusively online, the only consistent exception being a secondhand book store in town that has countless little gems.

[Shadow]

I buy almost exclusively online, the only consistent exception being a secondhand book store in town that has countless little gems.

I love second hand book stores,totally agree with you on that. My daughter has requested several out of print books in the past...best place to find them. Fun to browze through too. I always try to support the bookstores in town. We have already lost Borders...it would be a shame to lose others. Especially the smaller ones.

[logroller]

I was reading a while back that best buy were big donaters to CAIR. I stopped shopping there. It's the islam hater in me.
Reminds me of a joke. My body is a temple...mostly because it hates Palestine. :laugh:

[DragonStryk72]

Problem is... this is just the way it's gonna go. You're going to see large scale niche stores disappear, because it's faster, easier, and far less taxing to order the same things online. Odd as it may sound, this is where huge stores lag as compared to the mom & pops. A lot of gamers I know shop at their FLGS (Freidnly Local Gaming Store), which is pretty much never a major retail outlet. For instance, here in Albany, it's Flights of Fantasy and Zombie Planet for me. When I go to Flights, I'll snag a few things, and maybe get some books, since they double as a bookstore. At ZP, I'll get game supplies, and some comics books, since they have those there. Sure, I could go online, but my friends work there. I chat with the cashier about the last game session, especially if my players did something stupid.

Meanwhile, places like BB and WM seem to be cutting back on their personal touches to try and focus on the sale, but that's not really a help for them, because if you remove the personal touches, then you lose the reason to shop there as opposed to shopping online. Hell, talk to an info desk person at B&N too long, and you could be getting them in trouble with their boss.

[Kathianne]

I buy almost exclusively online, the only consistent exception being a secondhand book store in town that has countless little gems.

I have spent a day in good used bookstores. ;)

[Kathianne]

Problem is... this is just the way it's gonna go. You're going to see large scale niche stores disappear, because it's faster, easier, and far less taxing to order the same things online. Odd as it may sound, this is where huge stores lag as compared to the mom & pops. A lot of gamers I know shop at their FLGS (Freidnly Local Gaming Store), which is pretty much never a major retail outlet. For instance, here in Albany, it's Flights of Fantasy and Zombie Planet for me. When I go to Flights, I'll snag a few things, and maybe get some books, since they double as a bookstore. At ZP, I'll get game supplies, and some comics books, since they have those there. Sure, I could go online, but my friends work there. I chat with the cashier about the last game session, especially if my players did something stupid.

Meanwhile, places like BB and WM seem to be cutting back on their personal touches to try and focus on the sale, but that's not really a help for them, because if you remove the personal touches, then you lose the reason to shop there as opposed to shopping online. Hell, talk to an info desk person at B&N too long, and you could be getting them in trouble with their boss.

Exactly right. If I wanted a first edition or an out-of-print book, Amazon would not be my first choice. I want a reliable, knowledgeable, and thorough search done. Sadly, there's few bookstores with that kind of help or service. I'm lucky, we have one the next town over.

http://www.andersonsbookshop.com/

[DragonStryk72]

Exactly right. If I wanted a first edition or an out-of-print book, Amazon would not be my first choice. I want a reliable, knowledgeable, and thorough search done. Sadly, there's few bookstores with that kind of help or service. I'm lucky, we have one the next town over.

http://www.andersonsbookshop.com/

Sadly, I have to use my former employer, Borders, as evidence of how not to do things. A lot of this boils down to the Borders Rewards program. See, Borders rewards was a really awesome program that encouraged people to come shop in the store by being a simple, completely free program that saved the customers money on everything they got through borders. Every $100 you racked up in purchases, you got $5 store credit that you could use whenever you felt like it. It was a testament to simplicity, and combined with some truly excellent customer service on their part, they got people coming back again, and again.

Then some chucklenuts noticed a dip in 4th quarter profits (Holiday season), even though the sales were high. What they discovered is that people were racking up store credit, then using it during the holidays, and decided the program needed to change. They made it so that the $5 store credit only lasted for a single calendar month, and then, they upped the amount needed to get the benefit to $150. If any one of them had stopped to think for ten seconds, they would have seen what was actually happening: 1st-3rd quarter sales were higher because people were buying more things from borders throughout the year, hence the larger amount of store credit earned by them for use during the holidays. But no, better to have a single big sale than year-round sales, right?

Well, suddenly, the B&N card looked a bit better, and the Rewards card looked worse, so guess what happened? People started going over to B&N more, stripping more sales out of Borders. Because of this, Borders cut back not only on staff, but selection as well. Yeah, cause nothing says "we want your business" like having fewer people to aid customers, and less stuff for them to buy.

They also mishandled e-readers, something B&N was able to punish them for big time. For the longest time, borders had only a single e-reader, the sony e-reader, for nearly $400. B&N meanwhile went ahead and got the nook, and got it at several different price points, a low, middle, and high end. They kept their system for discount cards the same, and just continued on much as they had been.

The final nail came when Borders came out with Borders Rewards "Plus", a pay-in program that went alongside their "free" program. The "free" program now required you to purchase $250 dollars worth of merchandise per year just to start being able to accrue the $150 for the store credit that could only be used for a single calendar month. That means, in order to get the rebate, you had to burn over $400 a year just to get a whole $5 worth of store credit. The "plus" program allowed you to pay $25 a year to get over the $250 wall to start getting the rebate. so let's see, $5 dollars store credit/$150 spent, so to start coming out ahead on that, you would need to spend... $750 a year, every year in Borders. Sure, they tacked on a discount, but that just made it take even longer to achieve the credit, and made the whole system more confusing.

As they did this, they also pulled even more people from the floor, and I started noticing the info desk was almost never manned, with customers having to wait for employees to get back, assuming they didn't get waylaid by customers in the sections first.

[Kathianne]

Sadly, I have to use my former employer, Borders, as evidence of how not to do things. A lot of this boils down to the Borders Rewards program. See, Borders rewards was a really awesome program that encouraged people to come shop in the store by being a simple, completely free program that saved the customers money on everything they got through borders. Every $100 you racked up in purchases, you got $5 store credit that you could use whenever you felt like it. It was a testament to simplicity, and combined with some truly excellent customer service on their part, they got people coming back again, and again.

Then some chucklenuts noticed a dip in 4th quarter profits (Holiday season), even though the sales were high. What they discovered is that people were racking up store credit, then using it during the holidays, and decided the program needed to change. They made it so that the $5 store credit only lasted for a single calendar month, and then, they upped the amount needed to get the benefit to $150. If any one of them had stopped to think for ten seconds, they would have seen what was actually happening: 1st-3rd quarter sales were higher because people were buying more things from borders throughout the year, hence the larger amount of store credit earned by them for use during the holidays. But no, better to have a single big sale than year-round sales, right?

Well, suddenly, the B&N card looked a bit better, and the Rewards card looked worse, so guess what happened? People started going over to B&N more, stripping more sales out of Borders. Because of this, Borders cut back not only on staff, but selection as well. Yeah, cause nothing says "we want your business" like having fewer people to aid customers, and less stuff for them to buy.

They also mishandled e-readers, something B&N was able to punish them for big time. For the longest time, borders had only a single e-reader, the sony e-reader, for nearly $400. B&N meanwhile went ahead and got the nook, and got it at several different price points, a low, middle, and high end. They kept their system for discount cards the same, and just continued on much as they had been.

The final nail came when Borders came out with Borders Rewards "Plus", a pay-in program that went alongside their "free" program. The "free" program now required you to purchase $250 dollars worth of merchandise per year just to start being able to accrue the $150 for the store credit that could only be used for a single calendar month. That means, in order to get the rebate, you had to burn over $400 a year just to get a whole $5 worth of store credit. The "plus" program allowed you to pay $25 a year to get over the $250 wall to start getting the rebate. so let's see, $5 dollars store credit/$150 spent, so to start coming out ahead on that, you would need to spend... $750 a year, every year in Borders. Sure, they tacked on a discount, but that just made it take even longer to achieve the credit, and made the whole system more confusing.

As they did this, they also pulled even more people from the floor, and I started noticing the info desk was almost never manned, with customers having to wait for employees to get back, assuming they didn't get waylaid by customers in the sections first.

You perfectly state what I as a customer noticed about our local Borders, within walking distance of my home. I had the Rewards card. About 2 blocks closer I also had a Barnes & Noble, the two were a two minute drive between them. I like Borders better, until that year. When the mucked around with the Rewards program, I avoided them unless I had received gift cards. I got to tell you, I was a bit miffed when I saw Amazon had incorporated Borders into their site. I got over that.

Borders is gone, the walking distance B & N is too for that matter, I'd blame Amazon and Anderson's for that. However there are 3 B & N within a 15 minute driving distance from my home.

[DragonStryk72]

You perfectly state what I as a customer noticed about our local Borders, within walking distance of my home. I had the Rewards card. About 2 blocks closer I also had a Barnes & Noble, the two were a two minute drive between them. I like Borders better, until that year. When the mucked around with the Rewards program, I avoided them unless I had received gift cards. I got to tell you, I was a bit miffed when I saw Amazon had incorporated Borders into their site. I got over that.

Borders is gone, the walking distance B & N is too for that matter, I'd blame Amazon and Anderson's for that. However there are 3 B & N within a 15 minute driving distance from my home.

I've learned a lot about how I want to run my own game store by watching what Borders did, and making certain not to go that route. The simpler and easier something is too use, the more likely it is to get used. I mean, if you have to rebuild your car every morning to get to work, you'd just start taking the bus, or even walking or biking it to work. Same thing in business, you have to make it easy for your customer to say yes

[Kathianne]

I've learned a lot about how I want to run my own game store by watching what Borders did, and making certain not to go that route. The simpler and easier something is too use, the more likely it is to get used. I mean, if you have to rebuild your car every morning to get to work, you'd just start taking the bus, or even walking or biking it to work. Same thing in business, you have to make it easy for your customer to say yes

I've not owned a business, but I've worked for and been a customer in many. Bottom line:

Strive to meet the customers needs.

Treat each and every customer, regardless of how much you think they'll spend, as your most important.

Thank them at every opportunity. (For stopping by; for purchase; for suggestions; for compliments.)

Express regret for anything less than their having a stellar experience. (something you don't carry-even if unrelated to your actual business; an employee that made them feel they were treated badly-rightly or wrongly; something that didn't work, but you're making right; etc.)

[DragonStryk72]

I've not owned a business, but I've worked for and been a customer in many. Bottom line:

Strive to meet the customers needs.

Treat each and every customer, regardless of how much you think they'll spend, as your most important.

Thank them at every opportunity. (For stopping by; for purchase; for suggestions; for compliments.)

Express regret for anything less than their having a stellar experience. (something you don't carry-even if unrelated to your actual business; an employee that made them feel they were treated badly-rightly or wrongly; something that didn't work, but you're making right; etc.)

Most failing stores meet the needs, but not the wants, of their customers. Customer service is one of those things, but people want to feel at home when they shop, they want to go to "their" store, whether it be "their" Borders, "their" Wal-Mart, or "their" IHOP.