Jag Venugopal's Blog

September 14, 2011

Not such a “Best Buy” any more?

Filed under: Business — Jag @ 10:02 pm

WSJ is reporting that Best Buy’s quarterly profit is down 30%. In response, Best Buy’s CEO had this to say:

“I understand there is sentiment in the market that they’d like to see me close more stores,” said Mr. Dunn. But the company’s mixture of online and store retailing “is the winning scenario for the long haul. There are still things in the physical world that are going to be important: expert advice and the ability to see and touch the latest tablets,”

Expert advice? At Best Buy? Sure, if one of the kids comes over and talks to you. Even if they did, they’d likely sell you whatever was in stock at the moment. And oh, they would surely load you up with Monster Cables. The very fact that Best Buy pushes HDMI cables for $60-$100 when I could buy functionally equivalent ones from Amazon for around $1-$5 causes me to completely distrust any advice they might give on anything else.

One cannot make up one’s mind about expensive electronics based on a cursory review in a store. An item may look very good, yet perform abysmally. I’ve found Amazon’s reviews to be a far better indicator of a product’s actual quality and usefulness than any advice that I might have received from a Best Buy salesperson. Sure, Amazon reviews can be gamed, too. But if a product has a few hundred reviews, and they span the spectrum from 1 to 5 stars, then in the aggregate, I can trust them.

Sadly, Best Buy’s business model is doomed. Unless they can overcome the inherent advantages Amazon possesses — better product information, honest reviews, and prices that are more competitive. For many items, especially those that can be shipped and returned without hassle, customers will continue to browse at Best Buy and order from Amazon.

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