Can someone explain to me what Best Buy gets out of doing this, besides a pissed-off Apple? I just don't get the business logic. People come to your store and want an iPad 2, you have them in stock, but you tell the customers you're out of stock because... what, exactly? You're hoping they'll wander around the store and buy something else after being stymied in trying to buy an iPad 2? You're creating artificial scarcity to build hype? You want to spread out the traffic in your store across multiple days instead of everyone crowding the store at once? None of these ring true with me. I really want to understand what Best Buy thought it was going to gain by pursuing this strategy.
best buy doesn't make money on the big ticket items they sell, they make money on the accessories. if the ipads are only coming in with a few smart covers at a time it's bad business to sell a customer an ipad and not an accessory. if best buy is getting ipads with no smart covers than it's a money loser for them to sell.
apple is the same way. a macbook or imac and a similar PC are about the same price. apple makes money on the applecare, one to one, accessories, etc. why do you think they are getting rid of boxed software in the stores?
Apple doesn't make money by being stupid. They're trying to get product out to as many people, in as many venues as possible. Probably targeting people who don't normally use, or aren't comfortable using the internet to order product.
My point was that I don't like the way BB does business; their return policies, sales tactics, bait-and-switch, etc.
I won't argue with you there. If you had bad experiences from BB on other products and bad customer service, then I would agree, screw BB.
But I only dealt with an Apple rep within BB. Still have her Apple business card (not a BB biz card) in my rolodex. And just was stating my experience of obtaining my iPad versus 'brand loyalty' to BB versus those ordering online at Apple.
Apple with iPad 2 seems to have way more avenues to distribute. BB get's on Apple's bad side then that's something they have to work out. The only problem that is solved is now Radio Shack and Toys 'r Us and Target and whoever, will now have a few more iPads to distribute/sale thanks to BB shenanigans!
Where I got my iPad 1 doesn't count so much so then the fact that I got my iPad 1...
I wish more companies would pull merchandise from Best Buy. I've always been suspicious of a lot of their sales practices, like the extended warranties they constantly push. They also tend to hire people that know next to nothing about electronics and just tell you what their manager wants you to hear.
Although Takeo?s comment sounds reasonable, too, which also isn?t sinister, just managers trying to look more successful than they are.
The managers are just working the system to their best short-term advantage. If your quota is 4, and you get nothing extra for selling 8, and don't get a gold star the next day if you don't sell 4, then you make sure you sell 4 and only 4 each day. ESPECIALLY if the reward system is not tied to the inventory system; you make sure you have inventory to sell each day rather than coming up short and getting punished for the days without stock.
The problem here would be BB's internal reward/quota system, not the managers' evil.
In any reward system (school, work, whatever) people are smart enough to figure out how to maximize their personal benefit while minimizing their effort and/or risk. Designing systems that align that instinct with a company's long-term interests is hard.
As with an old lady I witnessed as she was talked from an Apple product to a competitor with comments such as I heard like "Oh you are far better keeping out of Apple's walled garden". Or "All the laptops we sell are the same, you just pay more for Apple and in fact often get less ..." I nearly bust a blood vessel and had to force myself not to interject!
Best Buy was busted for having different pricing on its in-store intranet, higher than the prices on its external website. Lure in the customers, then claim they were mistaken about the price, show them the internal site with higher prices, etc.
Sounds to me like BB is trying to artificially prop up the tablet competition.
They probably think it is in their best interest to have a competitive field of tablets and be able to get better pricing from Apple.
Appears as though their plan has backfired.
Yes. This sounds exactly like that. I understand the concept, but it's stupid. If a retailer is selling different manufacturers products, they should be trying to sell as many of each as possible. It's also possible that they are finding themselves too dependent on Apple lately, and are concerned about that. Acer will be selling its new tablet there next week, or the week after, so perhaps that's got something to do with it as well.
I don?t think it was anything so sinister. It just sounds like they wanted to make sure they some to sell each day, which isn?t a bad business strategy. Although Takeo?s comment sounds reasonable, too, which also isn?t sinister, just managers trying to look more successful than they are. Excluding Apple?s retaliation it?s not a bad move for them if that is how Best Buy?s upper management judge sales. You have to work the system to best suit your environment, it?s a far cry from anything hinky like creating an artificial demand. Either way all the iPads they receive will be sold, this just makes their numbers consistent.
Sounds like a lot of people have never been at the Apple section of a BB. BB salespeople are insanely blunt about not putting effort into selling Apple products. There's a better sales commission selling a $400 android tablet than a $600 Apple one. They just don't want to sell them. Just walk into into one and hang around the computer section to hear the conversations that you can barely contain yourself from interrupting. I have one near my work and one close to home, and I occasionally stroll in just because it's sometimes a fun diversion, and I literally hear salespeople dissuading people from iPads all the time.
But I agree with Gatorguy that we're all just being typical internet yappers until it's confirmed.
I work at a Best Buy and they did pre-orders on the iPads. When we got stock, they went through the pre-orders, called the customer's who pre-ordered them and gave them 48 hours to pick up the iPad 2 before it was put on the floor to sell. Any units we got in that were not pre-orders were sent to the floor and sold. I have been directly involved in this process as part of my job. If Apple is involved, then something must be going on... Interesting...
This is exactly why I own an iPad instead of an iPad 2. I was at a best buy trying to purchase an iPad 2 and was told they were out, despite seeing several "on hold" at customer service.
What you're failing to understand is that those iPads 'on hold' at customer service were probably already sold. At BB, you can buy something online and they pull it from stock and put your name on it. It is held in customer service until you pick it up (or a couple of days if you don't).
Would you rather have Best Buy sell you an iPad online for in-store pickup and then after you drive 100 miles to get it, find out that they sold it to someone else?
It's a fair system.
Quote:
Originally Posted by billin
Can someone explain to me what Best Buy gets out of doing this, besides a pissed-off Apple? I just don't get the business logic. People come to your store and want an iPad 2, you have them in stock, but you tell the customers you're out of stock because... what, exactly? You're hoping they'll wander around the store and buy something else after being stymied in trying to buy an iPad 2? You're creating artificial scarcity to build hype? You want to spread out the traffic in your store across multiple days instead of everyone crowding the store at once? None of these ring true with me. I really want to understand what Best Buy thought it was going to gain by pursuing this strategy.
Just another mindless rumor. If BB turns a customer away, they're not likely to buy something else - they'll just shop around until they find one - which is a lost sale for Best Buy. There is absolutely no reason to turn a customer away today and hope that they'll come back tomorrow if you have the item in stock.
The daily quotas are not very meaningful. I'd much rather sell everything I have than worry about quotas - particularly daily quotas. Do they get all worked up every time there's a snow storm and traffic is down for a day or two?
I work at a Best Buy, and I can confirm this. Our manager told us yesterday that starting today we can no longer sell the iPad. I don't know about this "internal quota" being true, but I can say we didnt follow that quota at our store if it did exist.
Best Buy's business practices aside, I'm surprised no one is questioning the "Apple is therefore freezing sales through BB" part of the story. Which strikes me as pretty implausible.
Best Buy is a major channel for iPad sales. I don't think Apple is quite so vindictive that they would cut off their nose to spite their face, even if BB really is withholding sales (and even if they are we don't know why, it isn't necessarily an effort to pump competing products).
Doesn't it seem more likely that Apple would have approached BB with their concerns, and perhaps a warning that being a poor channel partner might result in reduced shipments?
At any rate, if Apple is actually freezing sales at BB we'll know soon enough, no one will be able to buy one there very quickly as they burn through existing stock, which, given what we know about sales, will be immediately.
My guess is that only some of the BB stores are engaging in this kind of practices in order to get the optimal reward/bonus out of sales per day. While BB is probably not the best managed company, I don't think this is a company-wide policy to stop selling product to optimize reward.
Can someone explain to me what Best Buy gets out of doing this, besides a pissed-off Apple? I just don't get the business logic. People come to your store and want an iPad 2, you have them in stock, but you tell the customers you're out of stock because... what, exactly? You're hoping they'll wander around the store and buy something else after being stymied in trying to buy an iPad 2? You're creating artificial scarcity to build hype? You want to spread out the traffic in your store across multiple days instead of everyone crowding the store at once? None of these ring true with me. I really want to understand what Best Buy thought it was going to gain by pursuing this strategy.
I've been to BestBuy twice in Chicago and the staff goes out of their way to tell you that they do not work on commission and will help you with any problems you have even after your purchase. Their prices are not always the cheapest and the staff will tell you that you have 30 days to return your purchase if you are unhappy, so some items you could buy and use and return, but I have not done so. Staff is nice and just follows store policy. Because they do not work on commission, they will not be pains in the butts, fighting each other to get you to buy stuff you really don't want. And best yet, if you ever need to use them, they have free and clean bathrooms!
I have read how Xoom is getting worse treatment?no working product, not featured, and not demoed. IPads seem to sell themselves. Perhaps Apple is still pissed-off over the iPad in duct tape ad or else Apple is prematurely worried about the WiFi Xoom that's on its way.
Thanks Wickley (and JrAgosta). That would make sense. If you have a pre-ordered/pre-sold ipad in the back, you certainly wouldn't sell that same product to a customer who just walked into the store.
With the last poster supposedly a Best Buy employee confirming they can no longer sell iPads, but not being aware of any quota system on them, that might show there's something else at play here. Anything from the original story, to Apple being torqued with the ASUS ad they had up for a few hours, to Best Buy not giving Apple preferential treatment over any Android competitors, to perhaps no story at all.
An official statement from one of the two involved parties is needed to clarify what's really going on. Has AI reached out to either of them for a statement?
Comments
Can someone explain to me what Best Buy gets out of doing this, besides a pissed-off Apple? I just don't get the business logic. People come to your store and want an iPad 2, you have them in stock, but you tell the customers you're out of stock because... what, exactly? You're hoping they'll wander around the store and buy something else after being stymied in trying to buy an iPad 2? You're creating artificial scarcity to build hype? You want to spread out the traffic in your store across multiple days instead of everyone crowding the store at once? None of these ring true with me. I really want to understand what Best Buy thought it was going to gain by pursuing this strategy.
best buy doesn't make money on the big ticket items they sell, they make money on the accessories. if the ipads are only coming in with a few smart covers at a time it's bad business to sell a customer an ipad and not an accessory. if best buy is getting ipads with no smart covers than it's a money loser for them to sell.
apple is the same way. a macbook or imac and a similar PC are about the same price. apple makes money on the applecare, one to one, accessories, etc. why do you think they are getting rid of boxed software in the stores?
Well said
Apple doesn't make money by being stupid. They're trying to get product out to as many people, in as many venues as possible. Probably targeting people who don't normally use, or aren't comfortable using the internet to order product.
My point was that I don't like the way BB does business; their return policies, sales tactics, bait-and-switch, etc.
I won't argue with you there. If you had bad experiences from BB on other products and bad customer service, then I would agree, screw BB.
But I only dealt with an Apple rep within BB. Still have her Apple business card (not a BB biz card) in my rolodex. And just was stating my experience of obtaining my iPad versus 'brand loyalty' to BB versus those ordering online at Apple.
Apple with iPad 2 seems to have way more avenues to distribute. BB get's on Apple's bad side then that's something they have to work out. The only problem that is solved is now Radio Shack and Toys 'r Us and Target and whoever, will now have a few more iPads to distribute/sale thanks to BB shenanigans!
Where I got my iPad 1 doesn't count so much so then the fact that I got my iPad 1...
I thought he was going for the sound that sheeple make (y'know, sheep + Apple = sheeple)...
We all know what he was trying to do... as far as I'm concerned he was having a fit of some kind...
We all know what he was trying to do... as far as I'm concerned he was having a fit of some kind...
Or a screwdriver through the head?
Although Takeo?s comment sounds reasonable, too, which also isn?t sinister, just managers trying to look more successful than they are.
The managers are just working the system to their best short-term advantage. If your quota is 4, and you get nothing extra for selling 8, and don't get a gold star the next day if you don't sell 4, then you make sure you sell 4 and only 4 each day. ESPECIALLY if the reward system is not tied to the inventory system; you make sure you have inventory to sell each day rather than coming up short and getting punished for the days without stock.
The problem here would be BB's internal reward/quota system, not the managers' evil.
In any reward system (school, work, whatever) people are smart enough to figure out how to maximize their personal benefit while minimizing their effort and/or risk. Designing systems that align that instinct with a company's long-term interests is hard.
- Jasen.
As with an old lady I witnessed as she was talked from an Apple product to a competitor with comments such as I heard like "Oh you are far better keeping out of Apple's walled garden". Or "All the laptops we sell are the same, you just pay more for Apple and in fact often get less ..." I nearly bust a blood vessel and had to force myself not to interject!
This didn't happen.
Best Buy was busted for having different pricing on its in-store intranet, higher than the prices on its external website. Lure in the customers, then claim they were mistaken about the price, show them the internal site with higher prices, etc.
Screw Best Buy.
Sounds to me like BB is trying to artificially prop up the tablet competition.
They probably think it is in their best interest to have a competitive field of tablets and be able to get better pricing from Apple.
Appears as though their plan has backfired.
Yes. This sounds exactly like that. I understand the concept, but it's stupid. If a retailer is selling different manufacturers products, they should be trying to sell as many of each as possible. It's also possible that they are finding themselves too dependent on Apple lately, and are concerned about that. Acer will be selling its new tablet there next week, or the week after, so perhaps that's got something to do with it as well.
I don?t think it was anything so sinister. It just sounds like they wanted to make sure they some to sell each day, which isn?t a bad business strategy. Although Takeo?s comment sounds reasonable, too, which also isn?t sinister, just managers trying to look more successful than they are. Excluding Apple?s retaliation it?s not a bad move for them if that is how Best Buy?s upper management judge sales. You have to work the system to best suit your environment, it?s a far cry from anything hinky like creating an artificial demand. Either way all the iPads they receive will be sold, this just makes their numbers consistent.
Sounds like a lot of people have never been at the Apple section of a BB. BB salespeople are insanely blunt about not putting effort into selling Apple products. There's a better sales commission selling a $400 android tablet than a $600 Apple one. They just don't want to sell them. Just walk into into one and hang around the computer section to hear the conversations that you can barely contain yourself from interrupting. I have one near my work and one close to home, and I occasionally stroll in just because it's sometimes a fun diversion, and I literally hear salespeople dissuading people from iPads all the time.
But I agree with Gatorguy that we're all just being typical internet yappers until it's confirmed.
This is exactly why I own an iPad instead of an iPad 2. I was at a best buy trying to purchase an iPad 2 and was told they were out, despite seeing several "on hold" at customer service.
What you're failing to understand is that those iPads 'on hold' at customer service were probably already sold. At BB, you can buy something online and they pull it from stock and put your name on it. It is held in customer service until you pick it up (or a couple of days if you don't).
Would you rather have Best Buy sell you an iPad online for in-store pickup and then after you drive 100 miles to get it, find out that they sold it to someone else?
It's a fair system.
Can someone explain to me what Best Buy gets out of doing this, besides a pissed-off Apple? I just don't get the business logic. People come to your store and want an iPad 2, you have them in stock, but you tell the customers you're out of stock because... what, exactly? You're hoping they'll wander around the store and buy something else after being stymied in trying to buy an iPad 2? You're creating artificial scarcity to build hype? You want to spread out the traffic in your store across multiple days instead of everyone crowding the store at once? None of these ring true with me. I really want to understand what Best Buy thought it was going to gain by pursuing this strategy.
Just another mindless rumor. If BB turns a customer away, they're not likely to buy something else - they'll just shop around until they find one - which is a lost sale for Best Buy. There is absolutely no reason to turn a customer away today and hope that they'll come back tomorrow if you have the item in stock.
The daily quotas are not very meaningful. I'd much rather sell everything I have than worry about quotas - particularly daily quotas. Do they get all worked up every time there's a snow storm and traffic is down for a day or two?
Best Buy is a major channel for iPad sales. I don't think Apple is quite so vindictive that they would cut off their nose to spite their face, even if BB really is withholding sales (and even if they are we don't know why, it isn't necessarily an effort to pump competing products).
Doesn't it seem more likely that Apple would have approached BB with their concerns, and perhaps a warning that being a poor channel partner might result in reduced shipments?
At any rate, if Apple is actually freezing sales at BB we'll know soon enough, no one will be able to buy one there very quickly as they burn through existing stock, which, given what we know about sales, will be immediately.
Can someone explain to me what Best Buy gets out of doing this, besides a pissed-off Apple? I just don't get the business logic. People come to your store and want an iPad 2, you have them in stock, but you tell the customers you're out of stock because... what, exactly? You're hoping they'll wander around the store and buy something else after being stymied in trying to buy an iPad 2? You're creating artificial scarcity to build hype? You want to spread out the traffic in your store across multiple days instead of everyone crowding the store at once? None of these ring true with me. I really want to understand what Best Buy thought it was going to gain by pursuing this strategy.
I've been to BestBuy twice in Chicago and the staff goes out of their way to tell you that they do not work on commission and will help you with any problems you have even after your purchase. Their prices are not always the cheapest and the staff will tell you that you have 30 days to return your purchase if you are unhappy, so some items you could buy and use and return, but I have not done so. Staff is nice and just follows store policy. Because they do not work on commission, they will not be pains in the butts, fighting each other to get you to buy stuff you really don't want. And best yet, if you ever need to use them, they have free and clean bathrooms!
I have read how Xoom is getting worse treatment?no working product, not featured, and not demoed. IPads seem to sell themselves. Perhaps Apple is still pissed-off over the iPad in duct tape ad or else Apple is prematurely worried about the WiFi Xoom that's on its way.
With the last poster supposedly a Best Buy employee confirming they can no longer sell iPads, but not being aware of any quota system on them, that might show there's something else at play here. Anything from the original story, to Apple being torqued with the ASUS ad they had up for a few hours, to Best Buy not giving Apple preferential treatment over any Android competitors, to perhaps no story at all.
An official statement from one of the two involved parties is needed to clarify what's really going on. Has AI reached out to either of them for a statement?