Will Best Buy Go Bust?

While it’s easy to
blame Amazon and other online shopping sites for the death of brick-and-mortar stores, the truth is a bit
more complicated.

T

his week brought more bad news for electronics superstore Best Buy. Hedge fund Greenlight Capital recently dumped Best Buy, along with computer manufacturer Dell, but called Best Buy “particularly irksome.” This comes after a year of speculation as to whether Best Buy will go the way of other big-box retailers like Borders and Circuit City.

While it’s easy to blame Amazon and other online shopping sites for the death of brick-and-mortar stores, the truth is a bit more complicated. Book sales were surely impacted by Amazon, and the rise of the e-book didn’t help, but Borders’ death was as much due to their own poor business decisions (expanding too quickly, financing agreements, etc.) as it was to the rise of the internet.

Likewise, Best Buy has been beset by a host of problems that have nothing to do with the fact that you can buy a 50” LCD more cheaply online. A big one for Best Buy is customer service. Best Buy spent big bucks marketing its “Geek Squad,” trying to position itself as the go-to place for computer service and repairs, but despite their marketing, the quality of their service was never particularly high. And a few high-profile stories, like the one about the Best Buy employee who falsely outed a customer on the customer’s Facebook page, quickly undid whatever reputation the Geek Squad had left.

Getting help from Best Buy employees on the floor was also a difficult proposition. We witnessed this ourselves on numerous occasions when we went to Best Buy to purchase something of considerable value, but were never approached by an employee with an offer of help. Other times when help was offered, the salesperson was not sufficiently informed to be able to offer assistance.

It shouldn’t be difficult to part with your money in a retail establishment, and customer service is the one advantage brick-and-mortar stores have over e-tail outlets like Amazon.  And if your store can’t get that right, it shouldn’t be a surprise when people stop walking through your door.