Back in January we took a deep look at Best Buy and its challenges. The company was dogged by stories critical of its overall performance. A Forbes magazine essay speculated that the Richfield-based retail electronics giant’s days were numbered.
The basic argument: Electronics retailing had shifted so dramatically to the Internet that Best Buy’s entire store strategy was a dinosaur and that its web presence and customer service weren’t good enough for the company to survive long term.
Today, we saw those anecdotal worries surface in hard data. Best Buy says it lost $1.7 billion in the quarter ended March 3; it had earned a net $651 million for the same period in 2011.
It also unveiled an $800 million cost cutting program that will shut 50 Big Box stores, and cut 400 jobs.
The changes will help. But as our readers pointed out in January, there are fundamental problems with the Best Buy experience.
Best Buy stock this morning was down more than 6 percent, trading at around $25 a share. In the ancient times — 2006 — the stock was worth more than twice that.
Click on the icons below to read what Minnesotans in the MPR News Public Insight Network told us in January about their Best Buy experiences.
View What’s Best Buy’s future? in a full screen map
The company may pull out of this tailspin. The CEO last week acknowledged the good old days were long past. “Our opportunity is in marrying the technology with the experiences (customers) desire….and just making it all work.”
But the concerns our readers expressed ran deep. They talked about how Best Buy is good for trying out new products but that they go somewhere else to make the purchase. Most had an iffy experience with a Best Buy salesman and when they bought something they didn’t always feel like they were getting a deal.
That’s more than just moving around pieces and cutting costs. Whether it’s peanut butter or a car or that big screen TV, we all need to feel like we got a deal when we lay out our cash. If Best Buy can’t deliver that to it customers, cost cutting won’t help.
— Paul Tosto