Posted on 11/08/2004 12:56:36 PM PST by PoliticalInsider
Brad Anderson, chief executive officer of Best Buy Co., is embracing a heretical notion for a retailer. He wants to separate the "angels" among his 1.5 million daily customers from the "devils."
Best Buy's angels are customers who boost profits at the consumer-electronics giant by snapping up high-definition televisions, portable electronics, and newly released DVDs without waiting for markdowns or rebates.
The devils are its worst customers. They buy products, apply for rebates, return the purchases, then buy them back at returned-merchandise discounts. They load up on "loss leaders," severely discounted merchandise designed to boost store traffic, then flip the goods at a profit on eBay. They slap down rock-bottom price quotes from Web sites and demand that Best Buy make good on its lowest-price pledge. "They can wreak enormous economic havoc," says Mr. Anderson.
Best Buy estimates that as many as 100 million of its 500 million customer visits each year are undesirable. And the 54-year-old chief executive wants to be rid of these customers.
Mr. Anderson's new approach upends what has long been standard practice for mass merchants. Most chains use their marketing budgets chiefly to maximize customer traffic, in the belief that more visitors will lift revenue and profit. Shunning customers -- unprofitable or not -- is rare and risky.
(Excerpt) Read more at online.wsj.com ...
Amen! What kind of CEO blames his customers for his business practices?
BB has really lost the plot.
Their 'loss prevention' (yellow shirts) people are an obnoxious scare tactic and I resent having to show my receipt when I waited in line 3 steps away from them for the last 20 minutes. Just because they are now trained to say 'hello' doesn't make them any less of a put-off.
Now all the sales gerbils are piping up with "what brings you to BB today?" - A nice, open-ended question that I'm sure sounded good in the marketing meetings but is equally annoying once you hear it 100 times. Do they think I came in to buy a pizza?
Check out http://www.bestbuysux.org
Used to work at Circuit City years ago. The devils were there 5:30 in the morning the day after Thanksgiving lined up outside the door to get that $29 VCR they didn't need or were trying to go as cheap as possible on a Christmas gift. If one of these 'devils' did happen to come in at 10 AM when all of them were gone (suprise, suprise), somebody got an earful. You're right, the 'devils' were absolute pains
This excerpt misrepresents the rest of the article. Best Buy is not trying to ban the "devils", only encourage those that they consider "angels". Bradbury Anderson is very specific on how they are going about doing just that. His ideas make sense. He is looking to cut lose leaders, enforce a restocking fee (not an uncommon fee in the tech business), improve service (poor service is the reason I do not shop there), targeted stocking of stores, reselling returns on-line, ending a relationship with fatwallet.com and many more. None of these include telling people they cannot shop there.
Unless we're missing something, this is complete barbrastreisand! A rebate application invariably requires the original UPC code, even when a copy of the sales receipt is acceptable, and I don't know of any store that allows a return of a product without the UPC code.
My wife bought a Lexmark three in one (Scanner, Copier and Printer) at BestBuy for me for Christmas two years ago. It could not [inhale vigorously] enough. When I returned it, the girl asked if there was anything wrong with it, I say, "Performance Issues, I wouldn't know where to start" I saw her roll her eyes and she sent it to the back, when they determined that I didn't break it, they gave me my wife's money back.
In 2001 (I think) I bought an $800 TV and an assemble-it-yourself TV stand. The stand had two tops and no bottom. (They are similar, but the top was counter-bored and the hole patterns were different, so it couldn't be used for a bottom.) The manufacturer (and his 800- number) said that they'd send me a new piece, but I didn't want to wait to use my first new TV in 20 years, so I dragged it back and got a refund and drove all over Eastern Massachusetts looking for an other one (Worchester). I think they've lost money on me. Too damn bad.
That's what it is, a game. When a merchandiser gives me a coupon for free merchandise, usually $5-$20, I always use it and but the exact amount, plus a few pennies.
They're playing the vulnerable customer for the sucker he/she is once they get in the store. They assume their display style and merchandise are so good I'll buy lots of stuff. When I don't, I'm part of the equation.
The other thing I like to use those coupons for are Christmas gifts. <^..^>
If they make a claim to beat any price, why are they annoyed when they must follow through?
I got that the last time I was in Best Buy. To my wife's extreme chagrin, I promptly answered, "I'm looking for that sexy redheaded sales girl with really big hoots!"
Almost lost a kidney for that one...but it was worth it.
Agreed.
"Here's a future business case for MBA students on what NOT to do."
Don't be so sure. If he can find a way to do alienate the "devils" without affecting the "angels" he'll boost his profits and be a hero.
Some stores are already throttling back on unlimited returns - those that do a lot of returns probably have a greater probability of being a "devil".
It'll be interesting to see how they do this. In the end though, their business is constantly under threat. If they have to do this it's an indicator of a bigger pricing problem
Fry's is teh best.
Yeah, except the idea that you can purchase stuff, return it in perfect condition, and then just rebuy it at a discount is not accurate. Store shelves are loaded with returned merchandise in re-taped boxes. I know there are "open stock" sales or whatever, but all returned items are NOT resold at a discount. Not when they are still new. If you claim the item is defective it goes back to the manufacturer.
Well then......
Don't use loss leaders. Don't discount....
Problem solved.
Every time I go in there, the checkout chick wants to give me a sales talk, gets pushy with those ridiculous additional warranties, and then-- assuming she's still asking after I tell her no in no uncertain terms to the previous-- gets pushy about my phone number, etc. I hate BB.
The whole point of this announcement, though, is to guilt trip the sort of person who's worried about the Best Buy guy not "liking" him if he brings something back. Suckers, in other words.
What's with the whining about the price matching policy, though? *They're* the ones who institute it, then they complain when some customers take advantage of it?? If I find a lower price, you're damn right they're going to match it if they're obligated to do so.
They're not the only stores to whine about this sort of thing, though. A lot of retail outlets try to squirm out of their price matching guarantees if they can. You've got to be prepared with documentation and a willingness to hold their feet to the fire.
As to the other stuff, I don't see how it's unethical to return something that works. When I've been there wondering about some item, the sales staff always tells me I can bring it back with no questions asked within thirty days, so I shouldn't worry about going ahead and buying it. I've done that, and then brought the thing back if I didn't like it. BB doesn't like it? Tough sh*t. It's their return policy. If they don't like it, change it.
If BB thinks they can blow consumers off, well, there are plenty of other places to shop. A lot of online outlets, too.
"Just make sure you pay your Best Buy CC bills on time,"
Never, EVER use a store CC, get the rebates or mileage from one of the generics -
I've used www.techdeals.net.
Shopping at Big Lots is almost as fun as making love!
I'm both, but I don't have a problem with BB's new business model and I expect it to be very successful.
They are simply doing specific local market research instead of just national and developing the local store to cater to it's local market and to hone customer service to recognize and serve it's best customers.
Duh! It's what I do as a small business owner.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.