Best Buy Trimming Stores And Corporate Staff, Hoping To Cut Prices

RICHFIELD, Minn. (WCCO) — Outside Best Buy’s corporate headquarters store in Richfield, you can already see the signs of change: a banner hanging on the wall tells customers to expect something new in the months ahead.

The Richfield store and a location in San Antonio, Texas, will be used as trial locations for something the company calls “the connected store.” It’s Best Buy’s idea of a new way to sell electronics.

To customers like John Meier, who bought an Apple Mac Book at the Richfield store Thursday, the new test market store sounds a bit like the experience in an Apple store.

“I think it’s a good idea to try and meet what the current trends are,” Meier said. “It makes sense to me.”

Last year, Best Buy lost $ 1.2 billion on sales that declined 1.7 percent. Pressure is on company executives to stem the losses and falling stock price and turn the ship around. The company has announced plans to close 50 stores in the U.S. and cut corporate and support staff by 400 positions.

Closing big box stores and cutting corporate jobs will save Best Buy an estimated $800 million over the next three years. Part of that savings will be used to lower product prices in hopes of attracting cost-conscious shoppers who are being lost to places like Amazon, Wal-Mart, Costco and Target.

George John, a professor at the University of Minnesota’s Carlson School of Marketing, said he’s not surprised by the moves Best Buy is making.

John says the past 10 years in the electronics business were largely dominated by big screens TV’s and smart phones. But with demand leveling off and competition intense, Best Buy’s challenge is to find new ways to attract customers.

The company plans on doing that by opening 100 more of the smaller format Best Buy Mobile stores and concentrating on the digital transformation efforts.

“Our tastes change, and what we want to buy changes, the nature of competition changes,” John said. “Everything changes more rapidly in retailing than in any other industry.”

Best Buy announced Thursday night that of the 50 stores it will close, five of them are in Minnesota. They include the locations in Edina, Rogers, Brooklyn Center, Hutchinson and Lakeville.

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Comments

One Comment

  1. looking for a decent price. says:

    They need to put more stuff on display so I can see it before I just order it from amazon and save a pile of money. Thanks to the sprint 4g repeater in the store..

    They either need to get their prices in line with the rest of the free market or fall the same way circuit city did..

    1. Franco says:

      And still the hoodies rally…more problems for their people…should have been in school or at work. Nice to know THEY still want to place blame on others for THEIR lack of commitment to solve the problems!

      1. metomjr says:

        I think you’re on the wrong thread. Still…Best Buy probably would blame others for their terrible postioning in the market.

  2. Bill kitchen says:

    You wonder why you are losing business that is you cheat to many because people. I have heard this from so many people I bought speaker from you and we’re told they were wireless when I open them they were not even the speakers that I bought I was told since I opened them I could not return them then I tried to get the wireless to work and then they said it be $150 more and then you wonder w hy you loose business. I will not be back if I had treated my customers that way I would not have many
    Bill_ kitchen12@msn.com

    1. Ben says:

      Bill, I’m sorry you had a bad experience, but most stores are pretty good.

      I worked for BB during college (Maplewood), and we were all top notch kids. We were all very well versed in our product lines, gave great customer service (despite people trying to scam us with returns), and treated people fairly. Heck, I frequently sent people elsewhere or gave them free solutions to their problems. It was my hope that they could then trust us with other purchases.

  3. Good Riddens says:

    Read this wonderful article from Forbes on why “Why Best Buy is Going out of Business…Gradually”

    http://www.forbes.com/sites/larrydownes/2012/01/02/why-best-buy-is-going-out-of-business-gradually/

    What ever happened to being the BEST BUY, they need to lower prices? They never have the item you want when you goto the store@#@*^&@
    So long Junk Buy, good rid-dens.

  4. DIEM NGUYEN says:

    CLOSING MUST BE A LOT REASON SOMETIME IT NOT THE PRICE, CUSTOMER SERVICE MAYBE THAT WHY PEOPLE DON’T WANT GO TO THE STORE..LUCKY CLOSED ONLY 50 STORE..BUT MY PREDICTION BESTBUY WILL BE LIKE CIRCUIT CITY…

    THIS IS MY LITTLE STORY BUT I DON’T KNOW MANY PEOPLE WILL HAVE SAME RACIST LIKE MY:

    I AM ASIAN, AND I GOING TO STORE BUY HD CAMCODER, I REACH TO CAMCODER SECTION, GUESS WHAT,,,I SAW 6-7 BULE UNIFORM STAND AROUND, SOME SNEAK AT ME AND IGNORE,,,BY THAT TIME I REALLY NEED QUESTION,,,THEN FORGET IT..I GRAB SONY HD CAMCODER AND HEAD TO CASHIER,,,GUESSWHAT,,,AFTER I REACHED TO THE CASHIER,,2-3 GUYS RUN TO ME,,,OH, HAVE YOU BEEN HELP, HAVE YOU BEEN HAPPY WHAT YOU GOT, HAVE YOU HAVE ANY QUESTION…AND WE HAVE FINANCE WOULD YOU LIKE APPLY?? I AM REALLY SHOCK..BUT TOO LATE,,,

    IF YOU OPEN BUSINESS, AND WHEN ANY CUSTOMER STEP IN, NO MATTER THEY BOUGHT ANY THING OR NOT, THE WAY ARE THEY DRESS YOU SHOULD TREAT THEM KING…WHY….BECAUSE…THAT YOUR INCOME,,AND YOUR PAY……

    I THINK 2012, AND WHICH THIS KIND CUSTOMER SERVICE, SO EXPENSIVE…YOU WILL DRIVE YOUR STORE TO CLOSING…NO MATTER WHAT YOU ARE CHANGE OR CUT….

  5. Michael Setterlund says:

    I think the real reason Best Buy is not doing well in sales is they lack items or titles for blu rays and videogames. I go to Best Buy mostly for blu rays and nintendo ds games. I used to find everything I want to buy at Best Buy. But lately for the past 8 months it has been very disappointing to shop at Best Buy because I don’t find everything I want to purchase. A lot time for movies Best Buy will only have the dvd version and not the blu ray version even though both formats are available. Another problem with the blu ray selection is when they sell out a certain title, Best Buy will not bother to restock it. I have a raincheck for a new blu ray release that comes with collectible figure and was sold out. The employee told me when they get it back in stock I will be notified via phone or email. It’s been 3 weeks, I still have not been contacted yet. The item I have the raincheck for was in the sunday paper add. As for the nintendo ds selection, many titles have been released since the past 8 months but Best Buy does not even bother to carry about 90% of those titles. So lately because of the lack of selection at Best Buy, I have been ordering from Amazon to get what I want.

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