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Best Buy’s Secrets for Thriving in the Amazon Age (2017)

nytimes.com

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Re: Best Buy’s Secrets for Thriving in the Amazon Age (2017)

#31

Post by general8bitso »

mikeash wrote: post #27
general8bitso wrote: post #23

Not a fan. Used to work there during college. If we didn’t sell enough PSPs (extended warranties), we were not allowed to leave at our scheduled time. Also, we moved all the laptop inventory to the back of the store, so if a customer wanted to buy a laptop that was in stock, but did not want to purchase an extended warranty, we were instructed to lie to the customer and say it was out-of-stock. Also, the whole incent…

Was it actually better for Best Buy to lose a sale than to sell a laptop without an extended warranty, or was that just a case of bad incentives making the rank-and-file do things that hurt the company?

Yes, the profit on the laptop was minimal, but the extended warranty considerably boosted profits, as well as provided bonuses for management.

They had a folding table setup at the front of the store w/ a PC running Excel, and every 15 minutes over the PA, each departments percentage of sales with extended warranties were read aloud.

Re: Best Buy’s Secrets for Thriving in the Amazon Age (2017)

#32

Post by general8bitso »

learc83 wrote: post #29
mikeash wrote: post #27

Earlier quoted context omitted.

Was it actually better for Best Buy to lose a sale than to sell a laptop without an extended warranty, or was that just a case of bad incentives making the rank-and-file do things that hurt the company?

Bad incentives. Some items were low margin, but almost nothing was so low that it was actually worth losing the sale. One of the things you were ranked on was PSP (extended warranty, but they beat it into your head never to call it that) attachment percentage. When a measure becomes a target... Occasionally there was a loss leader sale item, and in those cases if someone wanted to by it without any attachments, it mi…

I feel your pain.

Re: Best Buy’s Secrets for Thriving in the Amazon Age (2017)

#33

Post by bluedino »

mikeash wrote: post #27
general8bitso wrote: post #23

Not a fan. Used to work there during college. If we didn’t sell enough PSPs (extended warranties), we were not allowed to leave at our scheduled time. Also, we moved all the laptop inventory to the back of the store, so if a customer wanted to buy a laptop that was in stock, but did not want to purchase an extended warranty, we were instructed to lie to the customer and say it was out-of-stock. Also, the whole incent…

Was it actually better for Best Buy to lose a sale than to sell a laptop without an extended warranty, or was that just a case of bad incentives making the rank-and-file do things that hurt the company?

A lot of hardware was sold near cost. The accessories and service plans are where the margins are.

The “team meetings” before and after every shift showed you the numbers from the previous day and your goals for the current day.

If your department didn’t hit their numbers, you’d get your hours cut or manager would get canned. Promotions went by how well you could sell, but you weren’t on commission.

They pushed for us to sell 2 black and two color ink cartridges with ink jet printers. Plus two packs of photo paper and two packs of regular paper.

Re: Best Buy’s Secrets for Thriving in the Amazon Age (2017)

#34

Post by jnbiche »

general8bitso wrote: post #23

Not a fan. Used to work there during college. If we didn’t sell enough PSPs (extended warranties), we were not allowed to leave at our scheduled time. Also, we moved all the laptop inventory to the back of the store, so if a customer wanted to buy a laptop that was in stock, but did not want to purchase an extended warranty, we were instructed to lie to the customer and say it was out-of-stock. Also, the whole incent…

The first few issues sound to me more like poor management in a particular location, rather than a global company policy. However, it could be that company incentives led to this such management initiatives.

Re: Best Buy’s Secrets for Thriving in the Amazon Age (2017)

#36

Post by Swizec »

randomacct3847 wrote: post #11

In my experience, no other category is so heavily gamed by shady marketplace sellers on Amazon than electronics. Search for wireless headphones on both Amazon and Best Buy and it’s night and day what you see returned. I’m bullish on Best Buy simply because it’s not a free-for-all of cheap foreign knockoffs. Retail of yesteryear might stand a chance because employing buyers who actually curate merchandise to be sold w…

In 2019 choice is no longer a problem, making a choice is.

I find myself shopping in person more and more. Shelf space in San Francisco is expensive so it’s usually full of good stuff.

Also why product reviews are a whole genre on YouTube

Re: Best Buy’s Secrets for Thriving in the Amazon Age (2017)

#38

Post by whoopdedo »

The article says Best Buy didn't have to layoff employees. But why would they ever? Retail has a high turnover rate already. All they had to do was not hire replacements when people left on their own. Or hire a part-time worker when a full-timer quits.

Is there any national retailer other than Walmart that has not been forced to reduce their labor budget as a response to Amazon? None that I've looked into.

Re: Best Buy’s Secrets for Thriving in the Amazon Age (2017)

#39

Post by mikeash »

learc83 wrote: post #29
mikeash wrote: post #27

Earlier quoted context omitted.

Was it actually better for Best Buy to lose a sale than to sell a laptop without an extended warranty, or was that just a case of bad incentives making the rank-and-file do things that hurt the company?

Bad incentives. Some items were low margin, but almost nothing was so low that it was actually worth losing the sale. One of the things you were ranked on was PSP (extended warranty, but they beat it into your head never to call it that) attachment percentage. When a measure becomes a target... Occasionally there was a loss leader sale item, and in those cases if someone wanted to by it without any attachments, it mi…

Measuring percentage would do it. I’m always amazed that companies can be so boneheaded. You’d think I’d stop being amazed at some point, but no.

Re: Best Buy’s Secrets for Thriving in the Amazon Age (2017)

#40

Post by learc83 »

jnbiche wrote: post #34
general8bitso wrote: post #23

Not a fan. Used to work there during college. If we didn’t sell enough PSPs (extended warranties), we were not allowed to leave at our scheduled time. Also, we moved all the laptop inventory to the back of the store, so if a customer wanted to buy a laptop that was in stock, but did not want to purchase an extended warranty, we were instructed to lie to the customer and say it was out-of-stock. Also, the whole incent…

The first few issues sound to me more like poor management in a particular location, rather than a global company policy. However, it could be that company incentives led to this such management initiatives.

The overall company policies were pretty good, but each district was ran like the District Manager's personal fiefdom.

Corporate pretty much let DM's run things the way the wanted and, and most DM's let store General Managers do the same (to a lesser extent). That combined with corporate providing tools to make it easy to drill down into meaningless metrics, and you ended up with employees encouraged to walk low margin customers in some stores, while in other stores that would get you fired.

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