Sliding Game Sales Hammer Best Buy

[Andy Chalk]

Sliding Game Sales Hammer Best Buy

Best Buy plans to close 50 big-box stores as its videogame and DVD sales continue to tank.

Times are tough for big box retailer Best Buy, which reported a net loss of $1.7 billion for the quarter ended March 3, 2012, an ugly number by any measure and particularly galling when compared to the $651 million in profit reported for the same period in 2011. The results have forced the company to undertake measures to reduce costs by $800 million by the 2015 fiscal year, including $250 million in reductions in 2013. As part of that plan, approximately 400 people will be laid off from the company's corporate and support areas.

Best Buy's biggest problem appears to be its entertainment division, which covers sales of DVDs and videogames. Domestic division sales losses hit a whopping 21 percent for the quarter, an acceleration of the 14.3 percent loss suffered over the same period in 2011. Best Buy's entertainment division is obviously being punished by the growth of digital sales and services like Netflix, while the company as a whole is reportedly suffering at the hands of consumers who use it as a "testing ground" before making their purchases at discount retailers like Walmart and Amazon.

To help combat this trend, the company is pulling the plug on 50 big box locations in the U.S. and shifting focus to its smaller-format Best Buy Mobile stores. 100 Best Buy Mobile stores are expected to open in the U.S. in 2013 and the total number is expected to grow from 305 today to between 600 and 800 by the 2016 fiscal year.

Source: Business Insider [http://www.businessinsider.com/best-buy-closing-2012-3]


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[Fappy]

This is not at all unexpected but still rather sad. Best Buys are already spread out too thin across the country as it is.

 

[Baresark]

Price is the most important point for any store. They are not the "best buy" for pretty much anything. I can't really understand why these corporations don't understand that the consumer will go where they can get the best deal the vast majority of the time. The presence of stores where you can buy the same or similar products for cheaper makes the consumer way too loss averse to actually buy what Best Buy is selling. It's the same reason why used game sales are pummeling new game sales... it's the same product for cheaper. All they can do to combat such a trend is try to make their prices cheaper.

But they won't. They will face ever looming profit losses and soon they will go the way of Circuit City. And Walmart gets to rule the world.

 

[shintakie10]

Maybe I'd buy stuff from Best Buy if literally everythin I could buy, from video games to vacuums, was at least 10% cheaper at Amazon and allowed me to be lazy and never leave the comfort of my own home.

That and their reps are friggin awful. That Newegg commercial about askin them about the difference between the two computers and he looks at the signs in front of them then just says I have no idea? True. Totally true.

Really Best Buy is just dumb. My partner worked at a Best Buy for about 6 months. They'd regularly have 2 people in nearly every department on a wednesday at 2 pm. Every. Department. Entertainment, computers, mobile, geek squad, floater reps. They even had 2 people at appliances of all things. Who actually even goes to Best Buy and says "You know what I need? A refrigerator from Best Buy." Sales targets would be ridiculously low and they'd overstaff constantly.

Then you have horrible horrible business decisions. Did you know that Best Buy has a used game selection and you can actually turn them in for credit? Cause they totally do. Except its the dumbest process because its somethin they literally just tacked on because they saw how well Gamestop was doin with it and wanted a piece of that pie without actually buildin it into the system. Ask anyone there about it and half the time they won't even know what you're talkin about, let alone figure out how to actually do.

After that you get the fuckin retarded way they handle preorders. Preorder somethin at Best Buy and here's the exact process you have to go through to get it.

1) Put 5 bucks down on the game.
2) Get a stub that you literally have to have in order to get your game.
3) When game gets released go to your Best Buy and turn in your stub.
4) GET REFUNDED THE 5 BUCKS
5) Pay full price for your game and use the 5 bucks you just got back to help pay for it.
6) Complain quite loudly that there are guaranteed preorder bonuses that were advertised in the Best Buy ad that you never received.
7) See them horribly confused about what you're talkin about.
8) Eventually give up and promise never ever to go through this bullshit process again

There is also another process that can and did happen at her store more than once.
3a) When game gets released go to Best Buy to turn in your stub.
4a) Be told that they don't have any copies of the game you preordered because they sold the last copy they had to a walk in 3 hours ago despite the fact that if you preorder you are guaranteed a copy as long as you show up within 24 hours of the games launch.
5a) Demand a refund, be told you can't get one and be politely told that you'll absolutely have a copy when the next shipment arrives in the next few days.
6a) Get your game a week later with only a bullshit apology from someone who isn't the store manager.
7) Swear you will never even shop at Best Buy ever again.

Seriously. Fuck Best Buy and everythin about them.

 

[KevinFournier]

Best Buy is losing money because of their awful customer service and store policies. The store layout is confusing and everytime I ask staff a question, I get the same dumb looks as the commercial shintakie10 mentioned. I don't like shopping there at all anymore. Amazon Prime meets all my shopping needs.

 

[coolkirb]

I think the "testing ground" theory holds some merit. Best Buy has higher prices because they put the effort into displaying product and highering supposedly more knowledgable employies who can help you make your decision about what kind of TV to buy. But if you put the money into displays and education and the person buys somewhere else after getting educated by you its wasted money. While this wont be the case for many people on this website for less tech savy people it probably is so it looks like bestbuy will have to cut down on displays and education and just turn themselves into a warehouse with the lowest prices possible if they want to survive.

 

[Kapol]

Since they're the same guys who made Geek Squad, a 'service' specifically designed to rip off people who don't know much about technology, I have no sympathy for the company. I feel bad for the employees of course. But I've known at least one person who's worked for them and they really do gouge money from people who don't know any better.

Not to mention they have the worst prices... well... just about anyone has better. I've had almost no real good experiences with the company to speak of.

 

[AgentCooper]

I loved Best Buy when they had HUGE isles of nothing but Anime on racks and at great prices. The deals are something you have to go on the searching for, and most of the time I go into Best Buy is to buy the on sale Blu-rays for $7.99

 

[agiganticpanda]

I loved Best Buy when they had HUGE isles of nothing but Anime on racks and at great prices.

That's because they bought Suncoast, stripped them of inventory and then sold them a year or two later to the company that owns FYE.

http://en.wikipedia.org/wiki/Suncoast_Motion_Picture_Company

 

[GonzoGamer]

Maybe I'd buy stuff from Best Buy if literally everythin I could buy, from video games to vacuums, was at least 10% cheaper at Amazon and allowed me to be lazy and never leave the comfort of my own home.

That and their reps are friggin awful. That Newegg commercial about askin them about the difference between the two computers and he looks at the signs in front of them then just says I have no idea? True. Totally true.

Really Best Buy is just dumb. My partner worked at a Best Buy for about 6 months. They'd regularly have 2 people in nearly every department on a wednesday at 2 pm. Every. Department. Entertainment, computers, mobile, geek squad, floater reps. They even had 2 people at appliances of all things. Who actually even goes to Best Buy and says "You know what I need? A refrigerator from Best Buy." Sales targets would be ridiculously low and they'd overstaff constantly.

Then you have horrible horrible business decisions. Did you know that Best Buy has a used game selection and you can actually turn them in for credit? Cause they totally do. Except its the dumbest process because its somethin they literally just tacked on because they saw how well Gamestop was doin with it and wanted a piece of that pie without actually buildin it into the system. Ask anyone there about it and half the time they won't even know what you're talkin about, let alone figure out how to actually do.

After that you get the fuckin retarded way they handle preorders. Preorder somethin at Best Buy and here's the exact process you have to go through to get it.
...
4a) Be told that they don't have any copies of the game you preordered because they sold the last copy they had to a walk in 3 hours ago despite the fact that if you preorder you are guaranteed a copy as long as you show up within 24 hours of the games launch.
...

Seriously. Fuck Best Buy and everythin about them.

Also as Seinfeld would say, some of them know how to take the pre-order, but they don't know how to hold a pre-order.
A new BB popped up by me in2010 and I pre-ordered (without all those hoops, I ordered online and picked up at the store) a game from them but they couldn't hold it for me and I was there on the launch day. I only pre-order one game a year (if that many) but I always figured the principle was that they hold at least one copy there for you. The reason I do it at BB is because I figure they order enough for walk ins unlike certain "game" retailers who only cover their pre orders. That was my first experience in that store and as you can probably guess, it was my last too.
And not for nothing but I used to shop there back in the day because they really did have the best prices but newegg has them there too.

 

[AgentCooper]

I loved Best Buy when they had HUGE isles of nothing but Anime on racks and at great prices.

That's because they bought Suncoast, stripped them of inventory and then sold them a year or two later to the company that owns FYE.

http://en.wikipedia.org/wiki/Suncoast_Motion_Picture_Company

The funny thing is we have a Suncoast and BestBuy right next to each other and how that Suncoast stays open is beyond me.

 

[Blindrooster]

I will miss your awesome cd selection, Best Buy. I have no use for those mobile stores.

 

[Zerbye]

Best Buy is the only big box store I know of that stocks everything I love about electronics. I can literally hang out there browsing physical items. I rarely buy anything there, especially media, but it's so cool to try out the hardware they've got...particularly with home audio. Not happy to see them go down, but I understand why.

 

[RJ 17]

From my understanding a lot of people are getting pissed off at Best Buy's customer service. I've seen a number of scathing articles and reviews of Best Buy, enough to give me the impression that a lot of people are completely fed up with them.

 

[Jodah]

It may just be the one I go to occasionally but it seems they are always overstaffed. I went in one time and there were 14 employees "working." I use quotes because only 5 were actually doing anything (2 cashiers, 1 service desk person, 1 repair, and 1 person helping a customer) the rest were just standing around talking, blocking the aisles in the process.

There were six customers in the store at the time. I'm sorry but you do not need 2 employees for every customer. This wasn't even at a peak time and it just happened to be a slow day. It was at 10am on a Tuesday...

Personally I use Amazon/Newegg for any tech purchases because it is easier and better to research online than asking Joe Nobody about it.

 

[CapitalistPig]

Its sad to hear people will be laid off in this already crappy economy. But that doesn't excuse poor business practices. They have an outdated model. Didn't they watch circuit city go down? it wasn't a coincidence. They were just lucky to have survived the first round of digital sales booms that circuit city couldn't compete with. That's all going with the wind though. More and more people are turning to website vendors for physical hardware and digital media. Which begs the question to employers.....what are the stores for? The answer is a cheap way to collect DOA equipment and satisfy pissed off customers with instant refunds and someone to yell at, buy new plug adapters when yours go bad or get lost, and sell small light hardware that is easier to ship in bulk then individual cases. At most you need about 5-10 people to run these small warehouse-ish stores. Meanwhile a well constructed website with consumer reviews of products can make two fold profit with less overhead. Its pretty straight forward. Its not very nice to the already constructed work force but its logistics.

At this rate Radioshack will last longer then these guys unless they do A LOT to their business model. Yeah, I see at the bottom of the article that it says they are changing their model but they are late to the game. Newegg, amazon, and a whole arsenal of well constructed fan trusted business already practice a similar model as described above. You have to turn a lot of heads away from the competition at this point who have faith based consumerism in other companies.

Its too bad. Its the end of a consumer era and very few executives are willing adapt to the changing environment. In the end they just screw over their employee's and consumers.

 

[Quaidis]

This is really BestBuy's problem to begin with. On the times I have gone, their selection has moved around or disappeared. When I ask an employee if they have _, they tell me to go buy it at BestBuy.com. Now obviously if I'm going to get something online, as the employee at the retail store wants me to do, I'd go to Amazon or a similar website to get it for a wide percentage off.


This upsets me a tad as I am one of those people that enjoys going outside of the home and frequenting random businesses to see what they have. Being told that I can only get stuff online is a crock.