Best Buy to shutter 50 stores as Apple's iPad strains margins

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Comments

  • soundvisionsoundvision Posts: 146member
    I don't feel sorry for them one bit. Instead of positioning themselves with a well educated staff to sell premium products, they sell computers at cost, including Apple and nickel and dime you out the door trying to sell you surge protectors and warranty plans.



    Consumers are getting smarter and know how to research products on their own and purchase from the lower price available. Customers don't mind paying MSRP at a local store if they experience and quality of service is there, which is exactly why Apple has been so successful.



    My girlfriend almost went to work for Best Buy corporate, she talks about all the time how she dodged a bullet. They are laying people off left and right and people are never getting raises. Poor corporate culture and it shows in their stores.
  • island hermitisland hermit Posts: 6,215member
    Best Buy to shutter 50 stores as Apple's iPad and 50,000 other pieces of low margin pc shit strain margins



    There... fixed the title.
  • massconn72massconn72 Posts: 137member
    If it weren't for all of the employees, I would love to see every single one closed down. Their customer service is one of the worst out there in the industry. I would rather pay more than have to go to a Best Buy. You know, now that I think about it, I don't care what happens to the employees. They are a good deal of the problem.
  • jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by massconn72 View Post


    If it weren't for all of the employees, I would love to see every single one closed down. Their customer service is one of the worst out there in the industry. I would rather pay more than have to go to a Best Buy. You know, now that I think about it, I don't care what happens to the employees. They are a good deal of the problem.



    That's a blanket statement that doesn't apply everywhere. We have two Best Buy stores in my town. One of them is fantastic - well stocked, clean, great customer service, and no pestering from the sales people. It's always full of customers and they have several registers going all the time. The other one is the exact opposite.



    It really comes down to the store manager. Best Buy's problem is at least partly failure to weed out the lackluster managers.
  • alanskyalansky Posts: 235member
    If the Best Buy store in San Rafael, CA is any indication, Best Buy is losing revenue because their stores have gone seriously downhill in recent years, not because their iPad margins are too low. Much of their inventory is low-end or out-of-date, and their prices (which used to be very competitive) are nothing to write home about. My local Best Buy frequently advertises "midnight madness" sales that are a joke. Good Guys and Circuit City have already found out how hard it is to compete with the likes of Amazon unless you really stay on top of your game. Best Buy will almost certainly go down the tubes if they don't wake up soon.
  • lkrupplkrupp Posts: 3,638member
    Quote:
    Originally Posted by sflocal View Post


    As usual, blame Apple. Why not blame the rest of the computing industry for constantly coming out with complete garbage that no one wants to buy?



    Maybe this AI author is blaming the iPad but other news outlets place online retailers like Amazon as the cause. People use Best Buy stores to try out, compare, touch... and then go and buy the product from Amazon. The question is what will people do if they find they have to buy online without having played with the product first. My gut feeling is that Amazon will see a giant leap in returns.
  • trex67trex67 Posts: 8member
    Quote:
    Originally Posted by Pooch View Post


    perhaps it's also in response to the fact that they have no idea how to deal with customers. their policies and their customer service is abysmal.



    as others have said, i do hope they keep their stores open ... i like to look at stuff before i buy it elsewhere.



    Exactly. Their customer service is horrendous, their salespeople are often snotty and patronizing, and their prices are usually beaten online. I've had enough of bad experiences with them, and I will not be returning to either their brick and mortar or online stores.
  • red oakred oak Posts: 506member
    Apple is not mentioned once in Best Buy's earning release. It is only mentioned (in passing) in the WSJ article this post links to at the top



    Apple is going to continue to have a huge negative impact on Best Buy. Not just iPad sales, but all kinds of merchandise including notebooks, point and shoot cameras, camcorders, GPS units. And, wait until iTV comes out. The downward spiral for BB is just starting



    And, Best Buy continues to offer aisles and aisles of movie and music on optical... That is all going away in the next few years. Led by Apple iTunes
  • alanskyalansky Posts: 235member
    Quote:
    Originally Posted by jragosta View Post


    Best Buy's problem is at least partly failure to weed out the lackluster managers.



    You may be right, but that's a BIG problem.
  • gatorguygatorguy Posts: 14,130member
    Quote:
    Originally Posted by melgross View Post


    They just point out Apple because, as usual, they're so large and well known... Does anyone really think that companies like Samsung, Dell, HP and others give BB higher margins than Apple? If you do, then you're dreaming.



    So who's idea was it to put the articles focus on Apple if it's outright false? AI? WSJ? Best Buy? That's a curious thing to do.
  • 4phun4phun Posts: 51member
    Quote:
    Originally Posted by mstone View Post


    Welcome to Circuit City.



    I think of CompUSA that folded before CC.



    Why buy an iPad at BB when you can go to Wal-Mart or Sams Club and get an iPad with a 90 day return policy?



    Have you ever tried to take anything back to BB?





    IMHO it was the BB clueless purchase of a large stock of Android that never sold and had to be dumped at fire sale prices that killed their profit margin.



    Now it remains to be seen if they will repeat it with Microsoft's Nokia Phone?



    Compared to many mall Apple stores about the same size of a Radio Shack, BB is too large and unfocused. Also the most of the world now knows that the Geek Squad is a high tech joke meant to bleed the customer.
  • digitalclipsdigitalclips Posts: 15,025member
    Quote:
    Originally Posted by jragosta View Post


    Furthermore, people who come in to buy an iPad have, on average, more money than the average shopper. Apple is attracting well-heeled customers to Best Buy.



    I agree that it's ridiculous to blame the iPad. If they can't make money on the iPad, then just don't sell it. They would still have the other 999,999 products in their store to sell.



    Furthermore, even the 'facts' presented here are distorted. While it may be true that Best Buy sells nearly as many phones as Apple Stores, there are something like 8 times as many Best Buy stores, so it's not that many phones per store.



    Finally, if you go to the original article, it's clear that many other factors are getting the blame:

    http://www.reuters.com/article/2012/...9?feedType=RSS

    - Total sales are down across the board. Forget margins, their sales are off - which will hurt profits

    - Best Buy stores are increasingly serving as free showrooms for online retailers. That is, customers view the product at Best Buy and then buy it online.

    - Best Buy offered deep discounts across the board last quarter - presumably to try to bring in additional sales to address the previous point

    - Best Buy big box stores are too large and expensive. Plans are to close 50 large stores and open 100 small ones.



    Note that in the Reuters article, the iPad isn't mentioned at all.



    Totally agree with you.



    Their sales / profits are down partly as part of the 'post PC' and even post 'small digital camera' era thanks to iPhones and iPads.



    I would also add anecdotally that on several occasions I've tried to buy Apple products in Best Buy and simply given up trying to get an assistant and walked out and gone home to order on line from Apple.



    Their spin on the blame is akin to the famous lines from Alice in Wonderland where it was explained that "To see what I eat isn't the same as I eat what I see!"



    Quote:
    Originally Posted by 4phun View Post


    I think of CompUSA that folded before CC.



    Why buy an iPad at BB when you can go to Wal-Mart or Sams Club and get an iPad with a 90 day return policy?



    Have you ever tried to take anything back to BB?





    IMHO it was the BB clueless purchase of a large stock of Android that never sold and had to be dumped at fire sale prices that killed their profit margin.



    Now it remains to be seen if they will repeat it with Microsoft's Nokia Phone?



    Compared to many mall Apple stores about the same size of a Radio Shack, BB is too large and unfocused. Also the most of the world now knows that the Geek Squad is a high tech joke meant to bleed the customer.



    You might have something there on the Android tablets. Anyone have data on what that fiasco cost BB?



    The Win 8 phone could be their last act!
  • razorpitrazorpit Posts: 788member
    Quote:
    Originally Posted by Pooch View Post


    perhaps it's also in response to the fact that they have no idea how to deal with customers. their policies and their customer service is abysmal.



    as others have said, i do hope they keep their stores open ... i like to look at stuff before i buy it elsewhere.



    You beat me to it. I stopped shopping there a long time ago for that same reason. And while I'll consider one bad experience an exception, multiple bad experiences at different stores is an indication of a bad habit/policy.



    My only question is this, since carrying Apple products is such a problem is Best Buy better just off selling their remaining stock of iPads, iPhones, etc. or throwing them all in the dumpster out back?



    Will they survive long enough to clear the shelves and go back to selling the ever popular $100 and up Monster Cable and accessories?
  • enjournienjourni Posts: 254member
    I can't stand Best Buy, their BS sales tactics nor their insanely high prices. Let them crash and die, the world would be a better place.
  • 8002580025 Posts: 172member
    Quote:
    Originally Posted by AppleInsider View Post


    Electronics retailer Best Buy plans to close 50 stores and cut $800 million in costs, in response to low margins in the mobile computing space from devices like Apple's iPad.



    Best Buy's plans also call for the company to cut about 400 positions in its corporate and support structure, allowing it to reach $250 million in reductions this fiscal year, The Wall Street Journal. The company currently has about 1,100 full-fledged retail stores, but about 50 of those will close as part of the reductions.



    The report noted that the popularity of Apple's iPad has contributed to Best Buy's struggles, as the device carries "relatively low margins" for the retailer. As a result, its mobile computing sales business has seen "strained margins" of late.



    Let's see, if in fact it's the iPad that's "straining their resources", then the answer is simple...stop selling iPads. Then again, it's a draw into the store and you know the sales associated will offer "accessories" with higher profit margins.



    And it's unclear what, if any, correlation exists between reducing corporate staff and the sale of Apple products at Best Buy. Work smarter and more efficiently, less complaining and finger pointing.



    Is Best Buy an electronics store or a seafood resturant? I am confused with the wine and crab they're dishing out.
  • plokoonpmaplokoonpma Posts: 256member
    Quote:
    Originally Posted by Gatorguy View Post


    So who's idea was it to put the articles focus on Apple if it's outright false? AI? WSJ? Best Buy? That's a curious thing to do.



    So you believe Best Buy? Come on... The only thing true is that they profit less from Apple but to blame a 1.7 billion lost on the only products they sell super well....
  • imarcwimarcw Posts: 7member
    Quote:

    So who's idea was it to put the articles focus on Apple if it's outright false? AI? WSJ? Best Buy?



    AI. The WSJ article literally doesn't mention the iPad once, and only mentions mobile devices as a threat to their margins in terms of people checking prices on them while in the stores.
  • wheat thinswheat thins Posts: 15member
    i couldn't believe the headline. They have to close 50 stores because they sell iPads???



    Heres an idea then, stop selling them and keep your stores open.



    Seriously!
  • panupanu Posts: 135member
    Some words are too pretentiously fashionable. We have a plethora of multiple disparate bloggers shuttering things. I shudder to think of the stores that are shuttered. I think a Best Buy would look silly with shutters. It also needlessly increases their overhead. Most shutters these days are nonfunctional decorative items anyway.



    Now I know why my thesaurus is missing. It broke its leash and jumped the fence, and a blogger ate it.



    If the Good Humor man were a blogger, he would be selling a plethora of multiple disparate flavors of ice cream before he shuttered his truck for the night. Spare me.
  • newbeenewbee Posts: 2,055member
    Quote:
    Originally Posted by melgross View Post


    Long gone are the days when department stores could charge list prices and premium service charges. People now just go for the lowest price.



    Mel, if you say some people or even most people, I might agree with you .... but I think there is ample evidence with what just Apple is doing to show that a company can make very good profits by concentrating on quality, not price. The same thing happens with a lot of so called niche companies. They manage to carve out very nice profits from small market share, thank you very much .... because they are not trying to be all things to all people. IOW .... they identify what they are good at .... and then focus almost exclusively on those qualities. Big box stores seem to focus solely on volume. Big fail, imho.

    Quote:
    Originally Posted by melgross View Post


    We look at the very low margin Tv business, the failing of the DVD and BlueRay business's, the disappearance of CD's, and the drop in HDD and memory pricing as being contributors to their problems.



    Further proof that when your focus is on the lowest retail price .... you will eventually lose, in most cases.

    Quote:
    Originally Posted by melgross View Post


    Does anyone really think that companies like Samsung, Dell, HP and others give BB higher margins than Apple? If you do, then you're dreaming.



    While I don't know for a fact that the PC profit margins are higher than Apple for BB, but based on my personal experiences and observations when I visit a BB store and watch as the staff continually try to "switch people" from buying a Mac to buying a PC, I strongly suspect that is the case.



    What truly amazes me is that, after all this time of watching Apple climb to the top in all the truly important metrics, other companies still don't seem to "get it" when they try to imitate Apple's success. Simply amazing.
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