business news in context, analysis with attitude

Got a lot of reaction over the weekend to the piece we ran on Friday referencing an excellent piece on by columnist Farhad Manjoo, in which he wrote about what Best Buy needs to do in order to survive in what for it has become an increasingly hostile retail environment. He argued that “big has become the domain of the Web,” and that Best Buy has to get smaller and more targeted, becoming - to use a phrase often turned around here - a resource for customers and not just a source of product.

I commented:

If you are going to compete in a cutthroat environment, you cannot do so by playing into the strengths of the other guy, even if those used to be your strengths. At some point, you have to recognize that the world has moved on, and create for yourself a new differential advantage.

One MNB user wrote:

It would seem that not only are the customers confused, the staff is, as well.

MNB user Bill Jensen wrote:

Best Buy is trying/has tried that model of a streamlined store, in their ‘Best Buy Mobile’ stores. They are focused, and somewhat welcoming. Unfortunately, one of the nicer ones in Fair Oaks VA is inside a mall a short walk away from the Apple Store.

Guess which store is busier. (notice I didn’t use a question mark).

The only things I buy at BB are customer return items at a reduced price. I can check them out for possible missing parts or damage (unlike the fulfillment section at Amazon) and I have an easy return policy.

A retail store like BB can learn a lesson from the Apple Stores though. They sell technology in varied ways, but the use of the technology is far more varied than the normal consumer can approach/understand. The manufacturers often use incomprehensible manuals to use their products. BB could begin to fill that gap with experienced personnel.  Having classes in those “hulking” stores to embrace the customer, and keep traffic in the stores, would be a great way to drive return sales. Even a sale from someone who purchased their expensive coffee machine or home theatre system elsewhere. Apple invites customers to attend classes in their stores teaching them how to use the product (and of course, how to buy more Apple products). It is not much different than a food store offering cooking classes, or recipe tips.

MNB user Dan Graham wrote:

What Manjoo describes is basically what Costco has done in most categories across their stores,  including electronics.  Consumers know Costco will have limited selection, but the items they do carry will be great values.  In effect "they've done the shopping for you".

Best Buy's challenge is that they have a very different item and category mix than Costco and as a result will continue to be dependent on electronics and be challenged by compressing margins.  Consumers will still be able to easily compare prices even if Best Buy has a streamlined selection so I do not think that is a way to solve their profitability issues.

MNB user John Giggy wrote:

Every time I read something about Best Buy and their death spiral I have to think about all of my experiences with their stores. I am not tech savvy. When I go looking for something to bring myself into the modern world the last place I want to go is BB. When you finally run down a 20 something kid to ask a question about a product and its use and applications they begin talking down to you as if you are stupid. I AM - that is why I am asking the question. Why not replace about 5 of these kids with a mature individual that is really interested in selling the benefits of a product and sharing information that applies to my life and needs. Yes I am a senior and am getting grumpy in my old age but when I walk into a store I have the ability to buy what I want and need just help me in doing that.

MNB user Scott Latta wrote:

I totally agree with Manjoo.  I've done a lot of store design work and worked with one of the Best store design firms in the country/world JGA.  The founder Ken Niche was fond of saying, "there are two ways to go with a store concept - if you go for big assortments, you have to compete on price, because you are making the customer do all the work in picking what they think is best and the customer charges you a fee for that by making you have the lowest price...if you do the editing for the customer and give them a logical edited assortment where the customer only has to pick what "level" they want, you can charge the customer a premium for that service.”

This is Amazon/Wal-mart vs. Apple - at the extremes - You can have everything OR you can have One and we think it's the best. 

Best Buy being able to walk the line and make the switch...that's a whole other conversation...

MNB user Bob Vereen wrote:

hhgregg is a locally based electronics/appliance chain (publicly owned) competing effectively with Best Buy and more successfully.

Its stores are about the same size, but less cluttered, and apparently its merchants have practiced item-selection as advocated by Mr. Manjoo.   Not down to a single item, but to several items in a category with different features from which to choose.

From another MNB user:

I can personally relate to the buying experience at Best Buy.  When shopping for a TV two years ago, I was absolutely inundated with selection and even more confused with the “speeds and feeds” that came were espoused from various salespeople.  Contrast that to a local shop where there were 12 models that they had determined “best in class” from a value perspective.  I paid a bit more but oh so worth it.

MNB user Bill Smillie had a different perspective:

My wife went to Office Depot to buy new copy machine after searching the web.  She got the worst customer service from a major company you could imagine and little product knowledge.  She went across the street to Best Buy and received the “Best” customer service you can imagine from a young lady and then another associate joined the sale and demonstrated the product to my Wife’s satisfaction.  Of course, she bought the best model they had, found out it was on sale and saved $100.  Those of us in retail can only hope our associates treat our customers with the same professional knowledge and salesmanship as she received at Best Buy.  Our local Best Buy must be different than others around the country.  They are busy...

MNB took note last week of a National Public Radio report that just six months after the US Department of Agriculture (USDA) lifted its ban on the slaughtering of horses for human consumption, a New Mexico rancher has applied for an application to reopen a former beef slaughterhouse as a place that would turn horses into food.

I commented:

Let’s face it. We think of horses, we think of Trigger. Silver. Scout. And all those other horses from those thrilling days of yesteryear when all a man really needed was a good horse, a comfortable saddle, and a prairie to ride.

I have to admit, though, that while it is hard for me to imagine eating horse, I was caught off guard when I saw in the NPR story that horse apparently tastes a little like kangaroo. Fact is, I’ve had kangaroo. In Australia. And I liked it a lot. (Waltzing Matilda, anyone?)

So maybe one man’s horse is another man’s kangaroo...

Which led MNB user Hortencia Espinoza to write:

Wow Kevin, you totally dated yourself. LOL!! Young people today have no idea who Trigger, Silver and Scout are. (I date myself here too because I DO know who they are.)

They don’t care about Flicka or Black Beauty either, and those are books that are still read in school. Mr. Ed isn’t on TV anymore. I think Bullseye from Toy Story is the most famous horse right now.

There isn’t the same sentimental value on the “pet” horse as there used to be. He is no longer your trusty steed and side kick. He is now the horse in battle that gets impaled just like the guy riding him.

The younger generation is much more into exotic dining and venturing away from steak and potatoes then ever before. International cuisine tops all restaurant visits and request for exotic meats is in demand. Trust me, I buy the game meats here at work and I can’t believe how expensive Buffalo and Kangaroo have become due to demand.

In order for the sentimental value on the horse to remain, and not just be seen as another dietary protein, Hollywood needs to make a horse a star.

Another MNB user wrote:

On a trip to Italy 2 years ago, I bought a few varieties of horse lunchmeats.  They were very good, and really, I think most people would have been hard pressed to tell the difference between them and beef based lunchmeat.  The meat was a little darker red and had a little more chew to it than beef and pork based lunchmeats, but the flavor was nothing out of the ordinary.  I wasn’t able to try any of the steaks or roasts, but I don’t think I’d have a problem with them.

The little deli that I bought the meat in had a sign extolling the virtues of horse meat.  Based on that little bit of info I think horse has a lot of benefits over beef.  Dare I say it could be the next healthy protein option on American plates?

MNB user Mike Franklin wrote:

Good to know that in Washington DC, both the house and Senate, both Republicans and Democrats were able to agree on at least one thing…Americans can begin to eat horses…

Surprising, though.  Since so many of them on both sides of the aisles are horses' asses.

Responding to my notes about the passing of Levon Helm, MNB user Ken Wagar wrote:

Thanks for honoring the memory of Levon. He went a long way to defining my college years starting with the Album “Music from Big Pink”. I have owned his records, then tapes, then CDs and now his songs on my I-Pod for a total of some 44 years and I still enjoy every tune.

MNB user Mark Raddant wrote:

Last Waltz — best music movie of the rock era by miles.

I saw the Before The Flood tour in Ann Arbor, Michigan.  Wonderful, and I will listen to the album when I get home tonight. Thanks.

MNB user Jamie LaRue wrote:

The Last Waltz is the best concert film ever.  Bar none.  Martin Scorsese directing.  Tons of great guests.

And the opening title:  "Best Played Loud."  Kinda like Levon played life.

I noted on Friday that Helm also was an actor, and served as the narrator of The Right Stuff, the opening eight minutes of which, I wrote, are among my favorite in the movies.

Which led MNB user Michael Freese to write:

You are right, Kevin. If you don't get piloerections from the opening sequence, something is wrong with you.

Okay, I’m gonna admit it. I had to look up the definition of “piloerections.”

And I’m going to let you do the same thing.
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