January 8, 2012

WILL THE LAST RETAILER LEAVING THE STRIP MALL TURN THE LIGHTS OFF, PLEASE? “Why Best Buy is Going out of Business…Gradually:”

We left the store, my friend having made his purchase but both of us fuming.  I was reminded of a line from Ernest Hemingway’s “The Sun Also Rises.” One character asks another how he went bankrupt.  “Two ways.  Gradually, then suddenly.”  Best Buy, I thought, is doing the same, just as many big box retailers have done in the last decade.First comes the strategic bankruptcy, well in progress at Best Buy, where management’s sole focus is improving some arbitrary metric from last quarter, even when doing so actually interferes with customers trying to buy something else.  The financial collapse comes later.  But if history is any guide, the second part, once it starts, will be quick.

As with many large retailers unable to cope with new channels and new consumer expectations, the company will continue to sputter on fumes, slowing down bit by bit until one day it just stops moving. Think of Elek-Tek, Virgin Megastores, or KB Toys.  (See a non-exhaustive, nostalgia-inducing list of recently-failed retailers over at Wikipedia.)

Or Borders Books. I love Amazon, but I’d like to think there will be a few retailers left in the coming years where you can walk in and buy a product — and even have a cheerful experience doing so. But as Larry Downes writes in Forbes, Best Buy seems to be doing its darnedest to alienate its customers, both those walking into its stores, and especially those shopping online at Christmastime. The result, Steve Green notes at Vodkapundit is “weaker than expected” Christmas sales numbers for the retailer. “I don’t know whether the bad numbers were due to the weak economy, or because Best Buy has entered its death spiral,” Steve writes.

Possibly, the answer to both halves of that equation is yes.

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