Tuesday, August 21, 2012

That is a lot of percent.

Best Buy profit tanks 91%, stock tumbles to 9-year low.

This obviously wasn't great news to wake up to this morning. But, hey! They are still turning a profit. Most analysts seem to be blaming everything on customer service. Which normally, I would agree 91% with.

I don't quite understand companies that sell technology, who refuse to embrace technology! When just about everyone on the planet reports having difficulty trying to check out of their stores, you'd think they would equip their staff with those Square credit card readers all over the store. You'd show your receipt at the door like Frys Electronics forces you to do. How effing hard is that? It isn't rocket science people.

At any rate - I see this whole thing a little differently. Customer service is the worst, but these stores would have been dead years ago if it weren't for those "appliance" store deals. I blogged about it here.

This is a scheme in which these companies lease floor space to house appliances. OSH does it. Which by the way is a horrible deal. Since they are "leasing" the floor space from companies like Sears, the host store does not have any control over pricing. I found this out when my washer broke down about 6 months ago. (Mr S. and I wound up fixing it ourselves because it seems that front loading washers were a fad. Fully half of the washers sold now are top loaders. But that is another story.)

The other significant problem? We are in a refresh economy. Meaning, not much new is coming out, just new revisions of old stuff. There just isn't enough new "stuff" to keep these electronics stores in business.

People think this is just a problem with Best Buy. It isn't. If my posts about Fry's electronics are anything to judge by. Here and here.

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