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  • iPad to Blame for Best Buy Store Closures?


    On Thursday it was announced that Best Buy will close 50 stores around the U.S. and relinquish some 400 employees as ongoing cost-cutting measures are taking their toll on the big box retailer's expansive market presence.

    All told, the electronics retailer needs to trim about $800 million in costs.

    So what's to blame for the company's financial burdens? After all, it seems like a lot of people still shop there and almost as many people buy iPhones and iPads from Best Buy as they do directly through Apple. Incredibly, however, the iPad is one of culprits Best Buy is blaming for today's unfortunate cutbacks.

    Let's pause for a moment while we all wrap our heads around that statement.

    You see, according to Best Buy, the low margins retailers like Best Buy see from iPad sales, regardless of how popular the devices may be, take their toll on the company's bottom line - a bottom line that is also suffering from the compound effects of sluggish PC sales.

    "I am not satisfied with the pace or degree of change we have made up to this point," Chief Executive Brian Dunn said in a conference call with analysts, adding, "We are evolving our retail store strategy. We are increasing our points of presence while decreasing our overall square footage."
    At the end of the day, Best Buy has to do what Best Buy sees fit to do. And the numbers confirm this reality. The company, after all, reported a loss of $1.7 billion for the quarter ending March 3rd of this year.

    Source: Wall Street Journal
    This article was originally published in forum thread: iPad to Blame for Best Buy Store Closures? started by Michael Essany View original post
    Comments 71 Comments
    1. Agent929's Avatar
      Agent929 -
      Quote Originally Posted by mustard05 View Post
      Are you serious with junk? Products like the iPad have probably brought more traffic to Best Buy stores, where these shoppers probably bought a screen protector and case. Not to mention that traffic has probably led to other sales not related to Apple products.
      The iPad is not to blame, its obviously other factors like too many stores, to much overhead, bad business practices, and an inability to successfully adapt to internet shopping quickly and efficiently, and most importantly, correct budgeting.
      You have a bad habbit of writing stories that are twisted.
      I completely agree with this statement. The iPad indeed does bring a lot more traffic to the store to get potential buys of other products.
    1. iFish's Avatar
      iFish -
      Quote Originally Posted by zackymcharvest View Post
      I work for best buy and here's an insider look at whats going on, even tho nobody is going to care.
      When (most) people come into the store, there not always looking for the "best buy" but more the help they can get from our staff. That's why you are not getting the best price, because you are paying for the help that we offer. If you don't need help then go buy it online instead of telling me that you can. I am not going to lie, there are employees that work in our store that would be better used unloading the truck, but we try, so when you guys are bashing us and calling us monkeys, you have to think how would that make you fell if I went into YOUR job and called you and idiot. Its just a job. Best Buy makes a total of 15$ + - 5$ depending on the model. What we try to make the money on is the accessories. And people just want the iPad now and buy that stuff online later. Mobile sales are killing us and the article statement is accurate, I can assure you of that.
      While I agree that some of the people cannot be blamed for being stupid, there are just some plain stupid sales people. Not just at BB, but everywhere. You also never hear good stories, ever. Only bad ones.

      I have a guy on a local car forum that works at the BB Mobile counter in his town. He swears up and down that the $120 Monster HDMI cable shows blacker blacks and more saturated colors compared to the $2.50 monoprice HDMI cable. WAT?? I give the guy credit for trying, but lets face it. These arent analog cables anymore. Both cables send the same 0s and 1s. You can get a nice gauged, gold plated connector HDMI cable from Monoprice, and save $117.50 compared to the Monster cable.

      Hell, I just bought a TV at HHGregg and I overheard a guy peddling their $80 cables saying that they are needed and no other cable would work. REALLY? Its things like this that really kill electronic sales people all over. I was honest with my sales guy and told him exactly what I was doing, and he agreed that I was getting the best bang for buck by NOT going with their mounts and cables. That guy was awesome, and Ill go back just because of him if I ever need to make another HH Gregg purchase.

      I think some of the services that BB offers really are out of line, in my opinion. IIRC they charge $30 to set up a kindle, $120 to hook up your PS3 (2 cables. LOL), and they even started doing car washes. Wow.

      Also mr. BB guy, true of false (I already know the answer. ). You do NOT get commission for selling the product, but you DO get commission for selling the warranty. Which is why employees peddle them like they are going out of style.
    1. Kenn@rd.'s Avatar
      Kenn@rd. -
      Quote Originally Posted by mustard05 View Post
      Are you serious with junk? Products like the iPad have probably brought more traffic to Best Buy stores, where these shoppers probably bought a screen protector and case. Not to mention that traffic has probably led to other sales not related to Apple products.
      The iPad is not to blame, its obviously other factors like too many stores, to much overhead, bad business practices, and an inability to successfully adapt to internet shopping quickly and efficiently, and most importantly, correct budgeting.
      You have a bad habbit of writing stories that are twisted.
      I somehow strangely agree. Best buy needs to sell televisions and appliances. Again. For cheap(er) $$$.
    1. Hunter926's Avatar
      Hunter926 -
      Quote Originally Posted by iFish View Post
      While I agree that some of the people cannot be blamed for being stupid, there are just some plain stupid sales people. Not just at BB, but everywhere. You also never hear good stories, ever. Only bad ones.

      I have a guy on a local car forum that works at the BB Mobile counter in his town. He swears up and down that the $120 Monster HDMI cable shows blacker blacks and more saturated colors compared to the $2.50 monoprice HDMI cable. WAT?? I give the guy credit for trying, but lets face it. These arent analog cables anymore. Both cables send the same 0s and 1s. You can get a nice gauged, gold plated connector HDMI cable from Monoprice, and save $117.50 compared to the Monster cable.

      Hell, I just bought a TV at HHGregg and I overheard a guy peddling their $80 cables saying that they are needed and no other cable would work. REALLY? Its things like this that really kill electronic sales people all over. I was honest with my sales guy and told him exactly what I was doing, and he agreed that I was getting the best bang for buck by NOT going with their mounts and cables. That guy was awesome, and Ill go back just because of him if I ever need to make another HH Gregg purchase.

      I think some of the services that BB offers really are out of line, in my opinion. IIRC they charge $30 to set up a kindle, $120 to hook up your PS3 (2 cables. LOL), and they even started doing car washes. Wow.

      Also mr. BB guy, true of false (I already know the answer. ). You do NOT get commission for selling the product, but you DO get commission for selling the warranty. Which is why employees peddle them like they are going out of style.
      Employees of Best Buy do not make commission.
    1. Kenn@rd.'s Avatar
      Kenn@rd. -
      Quote Originally Posted by LSZ33 View Post
      What I like about the best buy staff, or at least the ones that know their stuff, is that they don't make commission off of sales so you can generally trust their advice. Like most have stated, their downfall is the fact that just about anything you want can be found online or elsewhere, cheaper.
      I concur.
    1. JesseDegenerate's Avatar
      JesseDegenerate -
      Quote Originally Posted by KraXik View Post
      Best buy have closed a load of stores they had only just opened in the UK.
      this and other failed investments on the planning and managerial level are why best buy is in the shitter. Those people happen to also write the press releases (or write the checks for the people who write them) so they never will get blamed.

      NOT because

      their employee's get paid $5 and don't give a ****.
      they have to many stores
      they promote pushy up selling

      worst thing is, when these slimy, disgusting executives (which covers most corporations to be fair, in the US) finally get found out; i would still pay good money to punch them in the face, so there will always be business opportunities.
    1. Jahooba's Avatar
      Jahooba -
      Best Buy is crazy-expensive. You'll rarely find deals there, and you rarely find the items you're looking for. The selection is just awful. Basically it seems like they're trying to buy the cheapest quality items that they can make the most profit from, rather than stocking their stores with merchandise that people are actually looking for. This is a huge problem for brick & mortar stores during a recession because people do research on the internet before they buy anything nowadays. Stores like BB are only good if you need something NOW and can't wait for it to be shipped.
    1. mrwalleyeman's Avatar
      mrwalleyeman -
      I have always had great customer service at bestbuy, way better then circuit city which closed thank god they really sucked balls. When I go to bestbuy I go get the things I want and buy them because I refuse to wait for something to be shipped to me. I do my research online then go buy it but I will buy it somewhere else locally if it is cheaper except at Walmart I refuse to buy any electronics at Walmart. Most of my electronics are purchased at bestbuy because where I live they are the only decent electronics store near me. And like I said I have always gotten really good customer service from them.
    1. imnothardcore's Avatar
      imnothardcore -
      If you think ANY store not just Best Buy but also Office Depot and all the others make a decent profit off not just the iPad but also computers you are horribly mistaken. The Desktops and laptops they put on sale are just a way to get you into the store. Those things used to be profitable but online and Dell pretty much killed it. The price competition on most hardware is so insane that there is only a few bucks profit made on that few hundred dollar machine. The profit on the accessories for $50 is way way more than the machines. The reason the sales people at some places are commissioned on accessories and warranties is because that is the only thing the store really profits on. (why do people hate commission anyway? do you expect someone that sells you stuff to be a volunteer so you know they arent trying to upsell you. dumbest argument ever...)

      I like stores, and I like window shopping and checking stuff out. I know about all the deals online but I still prefer to buy stuff from the store because I understand the physical item in front of me on display and the instant gratification has value. Am I going to spend double the price, no. But I do have a percentage that I consider fair to pay for the experience and availability. If everyone looked at stores and just bought online, no stores would exist. I also think the stores help people that dont know what accessories go with something. Do you think a doctor gives a crap about saving 50 bucks by purchasing his cable online if he knows nothing about TVs or electronics, probably not. He walks into a store and says I need that sweet TV, what will make it work. end of story. he pays his bill and if everything works hes happy to pay what it took.

      If you dont like a store, its sales people, or the "greedy corporations" then dont buy from the store. We arent forced to buy from any store. If you dont like it, dont go. Guess what, as long as youre not some ridiculous jerk and have a lot of people that agree with you the store and "greedy corporations" that run it will close down. end of story. There is no trickery in the price, its an advertised price. You open a business to make money. You dont sneak the price on there or force people to do it. If you cant handle a pushy salesman thats your problem, if you were offered a crack pipe from some pushy crackhead would you light up with him? cmon.. People open businesses to make money, spend more time learning about businesses and how you can make millions then crying about it and collecting your food stamps.
    1. feidhlim1986's Avatar
      feidhlim1986 -
      Worse article I think this site has ever produced. Yeah, it's the iPads fault.....How iTinted is your reality??

      You failed to mention that Best Buy plan on closing 50 Large Stores, but OPENING 100 smaller new Stores. They are moving away from large stores and large items like TV's, that usually have to be delivered anywho, to smaller stores selling smaller (better selling) items like smart phones, laptops, tablets. Large items will still be available on Best Buys online store.

      To read the actual news story please see:
      Best Buy is closing 50 stores after losing money
    1. cmwade77's Avatar
      cmwade77 -
      Actually, there are several issues with Best Buy and none of them have to do with the iPad. I personally refuse to shop there as long as they require me to allow them to enter my ID information into their computer system, even when returning something that I paid cash for and have the receipt.

      I did predict that something like this would happen when they started requiring IDs for all returns. I maintained it when their systems were hacked the first time and the ID information was stolen, then when it happened a second time, I was shocked that there were still people that would be willing to buy anything at Best Buy.

      In addition, I have found their prices to be very high compared to Amazon and their customer service extremely lacking.

      I think the days of big box electronics stores are coming to an end for the most part. I do think that Fry's will stick around a little while longer than Best Buy, but overall they too will start closing up shop.
    1. xsteven77x's Avatar
      xsteven77x -
      Quote Originally Posted by Agent929 View Post
      +999999999999999



      I can assure you that you know nothing about what best buy makes off its products.



      Absolutely no offense to you, but the majority of best buy employees are full of themselves. I dont know you so I can't say anything about you. They are right about what they said about feeding customers lies. I see it all the time. And I can also enure that you know absolutely nothing about best buy profits, and your SM doesn't either.

      Edit: also the part about paying for advice is crap. If any business sells a product, they should be knowledgable of it. Every business.
      Frankly you obviously know nothing. At least at my store they tell us what the profit margin is on certain products if we ask. So you can kiss my *** and quit being so judgmental.
    1. opiak's Avatar
      opiak -
      Amazon is to blame! Who needs bestbuy?
    1. iPhoneMuscle's Avatar
      iPhoneMuscle -
      Best Buy.... lol. Enough said.
    1. Kenn@rd.'s Avatar
      Kenn@rd. -
      Quote Originally Posted by xsteven77x View Post
      I work at best buy and without giving away trade secrets, saying they make about ten bucks per unit is not that far off.
      I understand, and I might be the first to say this but yep I'm an idiot, but I am also a consumer. I am the .001% who buys electronic items. When I do shop I am looking for the best value for my buck. And just because I'm an idiot doesn't mean I am vulnerable to cheap ****. I just want good quality. As far as BB, they are aight in my book, and we all know what we want it's not the pimple- faced sales kid who thinks that he knows it all, he is just doing standard protocall, that's all, best buy is somewhat aight with me, even with other stores available I still shop at best buy, they are ok with me I just feel that they need to stick to what they had when they first came out and that's appliances. No pun intended.
    1. Tony1979's Avatar
      Tony1979 -
      While doing some brief reading, I came upon an interesting take on Best Buy practices at this site. It is worthwhile to note that the inner structure of Best Buy is as chauvinistic as possible. Having worked there in my mid-twenties, they were more inclined to promote substandard male employees over more qualified female employees. While I offer no postulate on their decline having to do with iPads, I can offer other information that makes the general public not care if they shut down every Best Buy. They use a demographic practice which preys on the poor, middle-class, and the wealthy. Special products and services are not offered to stores located in predominantly African-American neighborhoods, whereas they supply Magnolia and other high-end services to stores within close proximity to the wealthy. African-American stores have substandard MP3 players, a larger CD collection, and cater to car audio, as an example. Management drills the sales staff on how to "speak" to the different classes. The classes are given names; Barry is the title of an elite store. Lastly, the checking of your receipt is a violation of the 4th Amendment. As Best Buy does not own the grounds on which said stores occupies, they have no authority to check your bags and or receipt, let alone detain you. I could go on but you're already bored. I'll crack open a cold one the day they go "Circuit City."
    1. Chad711's Avatar
      Chad711 -
      Can't recall the last time I bought something from Best Buy. There is a better price about any where else you go.
    1. Kenn@rd.'s Avatar
      Kenn@rd. -
      Quote Originally Posted by Chad711 View Post
      Can't recall the last time I bought something from Best Buy. There is a better price about any where else you go.
      well see that's the whole problem; I live in an urban environment so I really have no other choice when it comes to electronics,lemme speak ebonics(lol), n#**as, not(er), like to buy new shyt. Not the bootleg shyt, so we rely on stores like these, and it's obvious, we are in there buying and buying and buying and buying..... Where else can the minority go to get quality items w/ warranty?
    1. Retribution1337's Avatar
      Retribution1337 -
      Look closely. The answer is right there in the picture, just above the "Open" sign. These stores have closed down because Batman said so.
    1. Twiztidly's Avatar
      Twiztidly -
      Makes perfect sense to me. Big Box stores (as with most stores) don't make much money off of "big ticket items". They make there money off of attachments. If people buy an Ipad but don't buy a screen protect or case Bestbuy isn't making any money to offset the cost of the item plus overhead, etc....