As consumers’ shopping habits change, what retailer seems to be getting it right?

Hubert Joly has been named CEO of Best Buy Co., the consumer electronics giant. Best Buy has been struggling to regain its footing in a retail market increasingly dominated by online shopping. Today’s Question: As consumers’ shopping habits change, what retailer seems to be getting it right?

  • Steve the Cynic

    That depends entirely on what one means by right. If the question is which one is likely to extract the most profit from consumers, this is a pointless conversation. The stock price is a better predictor of that than any opinion likely to show up here. If the question is which one’s business model best helps people live happily, and therefore really earns those profits, well, none of them are thinking that way.

  • Phil

    Costco and Target. But as for electronics they don’t handle, online usually ends up being the best buy.

  • reggie

    I’d say my local food co-op, because they’ve built a business around serving a distinct community (both geographic and membership-based), and because they offer a limited mix of (generally) healthful products that my family uses every day. The experience of shopping is one part purchasing and one part a sense of connection. The latter can’t be outsourced or offered online. The small premium we pay versus shopping at a different kind of food vendor is well worth the values added.

  • GregX

    [Amazon] Don’t own buildings customers walk into if you don’t actually own/make the products-brands you sell. Those are commodities that customers “know about” and they just want price & returnability.

    [Apple] – own boutique stores in high traffic areas where your brand is oogled and played with – so you get a chance to educate customers and get direct feedback on a variety of customer product perceptions.

    [Nieman-Marcus] – the “wealthy” will buy quality regardless of the rest of the nations stress. fully respect your customers whims and sales will roll along.

  • GregX

    Steve the Cynic , I think your comment highlights the dual relics of the publicly held companies nightmare – that of the 90-day Wall Street Analyst (WSA) “expectations”. Companies are artificially forced to treat every single consumer as a blob-character that will appreciate the exact same experience in the store – regardless of sex, age, background or needs. That statistical approach to consumers results in pestering staff always “helping”, constant bombardment marketing, random store re-organization to promote different products, new and changing customer rewards-addiction programs, (etc., etc., etc., ….) BUT it satsifies the WSA requirement for standardized “corporate programs” and the supporting DATA that feeds their ridiculous future projections – which make weather forecasters look like geniuses.

  • Jim G

    I pay attention to whether a retailer is giving employees a fair deal. I won’t shop at Walmart because of their terrible labor policies. But I once walked into an impromptu meeting at 8:00 am at the local Target where a manager was explaining to 30 employees how their hours were being reduced. As a former Target employee in my high school and college days, I remember feeling powerless as my work schedule was always in flux. There were many times that I needed a big pay check for tuition and my hours were reduced. As a little guy I guess fairness is my biggest consideration. There should be a fair price combined with fair labor practices, whether on-line or in brick and mortar stores.

  • georges

    “There were many times that I needed a big pay check for tuition and my hours were reduced.”

    How self-centered can one get?

    So, the large corporation was supposed to go around and ask each employee if they “needed a big paycheck” that week, and adjust their hours accordingly, taking hours away from someone who didn’t have a tuition payment due?

    A true Center Of the World attitude.

    Perhaps a little bit of thought would have brought one to the conclusion that it was his own responsibility to save up ahead of time for the tuition payment.

    You know, rely on yourself, instead of expecting a multi-billion dollar corporation to be cleaning up your messes for you.

    HarHar

  • neptune612

    I can’t think of any retailer who has gotten it “right” by my scoresheet. Target and Best Buy both gave large amounts of money to a bigoted man running for governor. Since I can’t buy politicians, I have to lobby with my purchases. I try to shop at retailers who not only give back to the community, but also share my view that everyone is equal. The only retailer that I think of off the top of my head is the Wedge. Not many retailers put people ahead of profits. They are usually just a parasite sucking money out of the community for their own good who treat their employees and the people in the community as a tools and not friends or a vital necessity to stay in business.

  • Steve the Cynic

    That’s right, georges/jockamo. If you’re looking to a big corporation to make your life better, whether you’re buying their products, looking for a job, or investing in their stock, you will be disappointed. Expecting an amoral, impersonal entity to care about anyone or anything is delusional. Which raises the question of why the public should care about them. If too many people ever stop believing the lie that having stuff will make them happier, those retail behemoths are all doomed anyway.

  • James

    Costco and Amazon.

    Costco has great products at amazing prices. They treat their employees reasonably well and treat their customers like valued customers. I think the place has saved my family $100,000 lifetime to date, and 10 years later I still love shopping there.

    Amazon is an unstoppable juggernaught if online shopping is your thing. They know no limits of creativity. They scare the heck out of everyone else.

  • georges

    Walmart is getting it right.

    In the last several years Walmart has taken the opportunity to replace old stores with beautiful new ones, update inside, become more customer friendly, and start a very well run internet division.

    It has been estimated that Walmart saves each person/family in this country $3,000 to $5,000 a year, on average.

    Money that real people can use to pay bills, make other purchase, etc.

    Walmart, therefore, has done more all by itself to stimulate the economy than anything the govenment has ever done. And, Walmart does it everyday……day after day, week after week, year after year…..

    Thank you, Walmart……..you are the best.

  • david

    I really like being able to see and try a product before buying, but you can rarely even do that in the brick and mortar stores anymore. And forget being able to talk to a knowledgeable sales person. The minimum wage highschool student with 3 weeks experience is useless. And now on top of it they charge extra for customer service. You have to pay extra at the checkout for them to stand behind the Chinese piece of crap electronic gizmo if you plan to use it for more then a few months. Most stores won’t even stand behind the product’s manufacture warranty, but are willing to look up the manufacture’s phone number for you if they are not too busy. Good riddance best buy, you are getting what you deserve. Amazon will at least honor the warranty and send you a new item if the old stops working prematurely. At least they used to. Been a while since I’ve ordered from them.

  • Sam Walton

    BUSINESS DAILY FINANCE

    Why Wal-Mart Does Not Strengthen Our Economy

    David Nassar | Apr 30, 2008 09:20 PM EDT

    It’s tax rebate time, and no one is hungrier for the tax rebate checks arriving in mailboxes today than Wal-Mart. The retailer is advertising tax-rebate sales and has offered to cash the checks for free — all in hopes that consumers will spend their newfound money at Wal-Mart stores. But spending your tax rebate at Wal-Mart won’t stimulate the economy — and here’s why:

    Despite bringing in over $378 billion last year, Wal-Mart repeatedly underpays its American workforce. More than 80 wage & hour lawsuits, including a recently certified class action lawsuit in California, are currently pending against the company. Plus, it faces more than 200 discrimination lawsuits for unfair promotion practices, pay discrepancies and other issues, including the nation’s largest workplace gender discrimination lawsuit. By failing to fairly compensate its employees, Wal-Mart cheats states out of income tax revenues.

    Wal-Mart also pays poorly. While the company seeks to benefit from the government’s rebate payout, Wal-Mart’s low wages means store employees have little or no disposable income to spend to stimulate the economy. Think about what even a small raise for Wal-Mart’s 1 million+ workers would mean nationally, or what it would mean to your city or town if everyone at your local Wal-Mart got a raise.

    Wal-Mart sources the vast majority of its products from countries overseas, meaning most of the cost of a given Wal-Mart product doesn’t go into the U.S. economy. Rather than boosting the U.S. economy, Wal-Mart has played a major role in exporting U.S. manufacturing jobs to countries with low labor and environmental standards. Meanwhile, the company has embraced unions in its Chinese stores and has negotiated with them to raise Chinese salaries. Apparently, what is good enough for China is not good enough here at home.

    Wal-Mart underfunds its health care plan and cuts corners whenever possible, forcing many of its employees to postpone care, thus decreasing their productivity and increasing the eventual cost of their treatment. In desperation, many of them rely on state-sponsored care and drain yet more funds from American communities. That means when Wal-Mart employees end up in emergency rooms, it’s U.S. taxpayers who end up footing the bill. If Wal-Mart were truly interested in stimulating the economy, it would begin to adequately fund its health care plan and take care of its own Associates.

    Wal-Mart routinely dodges state and local taxes, meaning money spent at a Wal-Mart store won’t end up in your community. Wal-Mart actively works to challenge property tax assessments and creates complex real estate arrangements to obscure how much taxes the company owes. When Wal-Mart dodges its tax burden, it takes precious revenues away from cities and states to pay for roads, schools and other services. In turn, individual taxpayers are forced to pay more to make up the difference (which takes more money out of their pockets) or get by with less.

    With its low price focus, Wal-Mart may appear to help the U.S. economy. But, the reality is that with its poor wages and benefits, massive China sourcing and tax avoidance, Wal-Mart makes its workers and the communities where it operates poorer.

    As our nation’s largest employer and most financially-successful company, Wal-Mart is a singular American institution. It occupies a unique position in our world by virtue of its size, reach and responsibility for the livelihoods of millions of workers and the needs of billions of consumers. And with such overwhelming influence comes certain moral responsibilities. It is the acceptance or rejection of those responsibilities that determines greatness.

    For the time being, Wal-Mart has rejected those responsibilities and because of that choice, the money spent there does nothing of what it could to strengthen our economy. Higher salaries, quality affordable healthcare and paying what they owe like any good American, are just three things Wal-Mart can do tomorrow that will make them a company worthy of our money.

  • Mark

    I am proud to say my family nor I have ever gone to or supported Walmart and Its tactics of bankrupting small family business’s in our communities. IMO.

    I think stores like McDonalds and Target have done a Good job of trying to accomidate community neighborhoods.

    Have they “Gotten it Right.” Hard to say, because it seems like a loaded question.

  • James

    georges:

    Yesterday you wrote “Those of us with genetics in the top 1/10 of 1% are sometimes amused by these antics….and nearly always entertained to some extent.” Today you are thanking Walmart for stimulating the economy.

    The mere fact that you have been inside a Walmart suggests yesterday’s post may have been misleading. Thanking Walmart for stimulating the economy is proof positive that great genetics does not equate with having a clue.

  • georges

    David Nassar is completely ignorant on any subject even remotely related to economics. Unfortunately for him, he isn’t aware of his ineptness, therefore he keeps embarassing himself by talking.

    And, only the Huffington Post, the place where children get their ideas, will give him a job.

    The Huffington Post, like the Daily Show, is for entertainment only, not real news.

    The difference is, the Daily Show tells you it is Fake News. Huff Post is not that honest.

    HarHarHar

  • Sam Walton

    So your post was for real georges? Part of me assumed it was a joke, but then one never knows.

    I do not know anything about David Nassar’s career, and in my experience those with an ax to grind against the Huffington post usually have a certain political agenda they are trying to promote. You seem to fit in that category. This brings up a another observation. David Nassar at least has a job, whereas you spend your whole day posting rhetoric into this (and how many more?) message board. Didn’t your mom tell you every time you point your finger at someone else, four more point back at you.

  • georges

    Additionally, my Walmart has an in-house bakery that turns out great breads, peasant breads, that are as good as any at specialty bakeries.

    And the deli cheese and sausage varieties are second to none, with the full quality and taste expected from the best. The selection is extensive. Giant wheels of Jarlsberg, and Havarti, and Baby Swiss……ummmmm…..ummmmm……..good.

    It doesn’t have everything. When I want furniture, I go to a high end furniture store. When I want a BMW, I go where BMW’s are sold.

    Walmart doesn’t even have Toyotas. Not even one dam Prius.

    Har

  • Ann

    McDonald’s has been treated very unfairly by the media. They have offered many healthy options over the years. I liked the McLean burger, the low fat bran muffins, and the soft serve yogurt cones. I appreciated the yogurt because it helps lactose intolerant people. The public evidently didn’t buy enough of these items because McDonald’s no longer offers them.They even offered carrots at their Iowa locations at one time.I don’t think any restaurant has offered more low calorie and healthy items. Since I have a low income, I also appreciate their prices.

  • Steve the Cynic

    I’ve known Wal-Mart “associates” who quit in disgust at how they were treated. I’ve also known some who say it’s a good place to work. My strong hunch is that Wal-Mart treats their workers just well enough to make it more trouble than it’s worth to unionize. So, to the extent that they do treat their workers well, the workers should be grateful to the unions.

  • Jefferson

    The retailers that are getting it right are the retailers that are still around at this point. Many businesses can’t make the traditional model work, just look at Circuit City…the key is to compete…provide a good product at a good price.

    This discussion is in reference to Best Buy so I have some advice to make them at least somewhat competitive again.

    First, reform your return policies so that people with receipts can actually return items within a few days…I know I was rejected from returning a set of blu-ray discs. I had just purchased the discs a day or two before, I still had the receipt, and wanted to return the discs because some “feature” on the disc was not compatible with my blu-ray player. I had to speak with a manager who still refused to take the discs back even though I had the receipt and a very logical reason for returning the item. Make it easy to return things, that will be a benefit to compete…I’ve never had an issue returning an item with an online retailer…they cover the shipping and everything.

    Second, get rid of those high school kids who don’t know much about the products in the first place…hire fewer but more knowledgeable, tech savvy employees and use electronic devices to direct customers around the store (electronic kiosks where you can type or voice search a product within the store) because that is probably the most common question the employees answer, “Where can I find…?”. Plus having more devices and fewer people allow the customer to ask for help when they want but to research the product without being hassled…I found that too many products in Best Buy are lacking in their price tag descriptions; an electronic device to provide a detailed description would be very useful when trying to compare features. An added bonus would be that you don’t need to bother an employee who simply finds a booklet and repeats the features off the piece of paper in front of him/her.

    Third, truly compete on some big ticket items such as TVs or computers. Make deals with some manufacturers and be sure you can always offer the lowest price on certain products and even show the price of your competitors next to the product just to prove you offer the lowest price (perhaps with electronic price tags on the shelves).

    Finally, work with the customer, make it a painless, line free, low stress experience and be sure to have knowledgeable, logical managers who make a trip to Best Buy as smooth as possible.

  • Kurt

    What a strange discussion. A business exists to make a profit, not “make people happy”. That said, a successful one probably does makes people happy by providing desirable goods at a price which the market will bear. A successful business also provides jobs which, I believe, is a good thing. Many people seem to want a business to be some kind of charity apparently. That is not their function.

  • Steve the Cynic

    Strange, only if you’re used to measuring well-being in dollars. It’s true that businesses exist only to make profits. Problems come when they do that by persuading people to buy stuff that doesn’t really improve their customers’ happiness, or when profits are sought at the expense of things like workers’ dignity or the health of the ecosystem.