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Being able to fully sell thru your stock of $500 consoles along with a high attach rate for warranties should really boost BB`s bottom line.
I noticed, checking the open box inventory online for local area stores, there are a TON of open items on hand in the area. Why not create value and have an Elite/Elite Plus My Best Buy event focused on ridding stores of open items. You could generate coupons offering an additional discount of 10%, 15% and 20% off based on product category (i.e. on tablets, since they're lower cost 10% and maybe move computers under $999 to 15% and over $999 to 20%, etc.). Or TVs based on size for instance. You could also offer bonus poins on clearance items versus marking them down, since they are not opened - i.e. Up to 5X the points depending on how end-of-life items are based on performance code.
In hind site this creates a mutually-beneficial relationship for both Best Buy and its customers. For Best Buy, you rid yourselves of an ever-growing amound of open items. For customers you're creating more value and awareness around the My Best Buy program and because it's customers that are already spending more in your stores so you know they'll buy in volume, effectively reducing inventory, and you know there's a really good chance they'll buy protection plans so you'll recoupe some of the margins on items too.
Just a suggestion.
It is well established that each year, the level of former Silver, now Elite (+) tiers is recalculated in February based on total purchases Jan1 through Dec 31 in the prior year. It makes sense for February as it allows for the return adjustments which would be competed by Feb 28th. That doesn't need to be addresses.
What needs to be addressed - and a simple solution - is the practice of resetting the accounts to $0 on Jan 1 to begin meeting the $3500 (or $1500) during 2014. Any excess beyond the $2500 (former Silver level and retained for this year's accounting) in 2013 is lost. What is lost is an issue!
REAL WORLD EXAMPLES of the effect of Best Buy's current policy. The issue became apparent to me with 2012 purchases totaling a little over $2800 of the $2500 required. Jan 1, my account reset to $0, effectly losing the $300 difference. This year, I have already met the $2500 required for 2013, so why should I buy anything during the Christmas when it is only going to be reset to $0 on Jan 1 with the new $3500 requirement in 2014. Worse, since in the return window, I am grappling with purchasing a $2000 MacBook Pro Retina, use it for up to 45 days, retuning in January only to re-purchase so the $2000 counts in 2014. That is just too big a hit to take in 2013 only to see it evaporate. Gaming the system...perhaps, but don't use that as a blinding excuse. In reality, it is applying a solution to the problem created by Best Buy's own policy.
SOLUTION: It is real simple. Take the amount required to requalify, $2500 this year ($3500 or $1500) next year and subtract it from the purchased amount. The excess carries over and creates a postive sense among your customer base that they are not losing anything. Additionally, as I saw other posts about "meeting goals in hard times" people won't suffer in the off year with the carryover as they are trying to reach a financially unattainable goal. In the meantime, you still have them as a group to market too for impulsive buying, or keeping you in the forefront with scheduled buying like replacing a cell phone when contract expires.
I started at BBY a little over a month ago in Gaming / Lifestyles. I feel we really need to step up on our gaming department. Maybe a little larger space, more advertising on our trade-in program and better price matching options. I'm really not looking forward to how we are going to squeeze PS4 and Xbox One into what space we have now.
We really need to get the word on the trade-in program out. I honestly never knew we had a trade-in program.
I feel gaming should be able to have more price matching options. Yes, some sites / stores that we already price match sell video games, but if we really want to bring in more customers, we need to price match Gamestop's accessories and used games prices. As has been said before, when you think of video games, BBY is not the first place that pops in someone's head, but we can change that! The biggest factor would be price match! We could even compete with Target's and Toys R Us's Buy 2 Get 1 free deals.
Any opinions, additions and/or amendments?
I just had a quick suggestion. Now that you have a Reward Zone Facebook app, you should integrate your Pitch-In program with it. That way, when your birthday or other special occasion rolls around, people can send funds to your Pitch-In card via Facebook. Facebook supplies information, like your birthday and when you change your relationship status, etc.
Anyway, just trying to help.
For anyone over the age of 40, they remember the days when Radio Shack was nothing more than an electronics hardware store... every wire, resistor, connector known to mankind. As history has shown of course, you can't sell only those things and expect to survive. So, instead there are now a fraction of the number of Radio Shacks as there once were.
On the flip side, there are many more Best Buys out there, yet there is still a shortage of retail DIY electronics hardware.
There just is no place to reliably go close by to purchase cables, connectors, adapters, screws, fans, heatsinks, memory, cards, tools, the list goes on. When you need these things, chances are you need it now for a project you're in the middle of. These are not things you want to have to order online. This is no different than being in the middle of that home remodel project and having to head down to Home Depot.
Enter the Geek Zone. The part of the store now renamed that incorporates both the Geek Squad support desk and new retail floor space for the items mentioned above. Geek staff would be the sales staff in the Zone.
Face it, we live in the age of entertainment. Everyone wants to be entertained; just look at the percentage of americans that get their news from The Daily Show. However, when I walk into my local BB store, it might as well be a warehouse. How about a BB branded entertainment channel on a large screen in the store...and streaming on the web site? I also liked the Coffee idea. More time in the store equates to more browsing, more interest, and more sales. Why should I go to a BB store instead of a web site? Because it's FUN. Get more FUN into the stores.
In order to better compete with Gamestop and any other companies taking game trades currently, Best Buy must find a way to be able to get on the same ground as Gamestop and those companies. In order to do this, Best Buy must get their trade in program seperated from the rest of the company and set up independently as a specialty chain. That is what allows places like Gamestop to immediately put the games, systems and other items that they take in for trade out on the shelves for sale without having to adhere to pawn laws. Albeit there may be exceptions to this depending on the jurisdiction and the prevailing laws there.
I have noticed that every single game I have purchased pre-owned from Best Buy has been resurfaced/cleaned before being repackaged and sent back to the stores as there is a distinct swirling pattern that you will notice if you fog up the bottom of the discs by breathing on it. In my opinion, this is wholly unnecessary and a very wasteful process unless the games are in poor shape to begin with. Not only that but this delays games getting sent back to stores while they are waiting their turn in the machine.
Moreover, games for the Playstation 3 system typically would not need this buffing/cleaning due to the hard scratch resistant coating on the discs themselves. Unfortunately once that coating is removed and unless it's somehow resealed with the same type of coating, those discs are worse than a normal CD and scratch very easily.
Anyway, it is my opinion that if Best Buy were to spin off their trade in program into a seperate chain that they could gain the status as a specialty retailer and circumvent the restrictions that are causing them to lose precious time by having to ship out everything they take in and hold onto it for weeks/months right now.
Hopefully someone higher up in the company can see this as well and will consider green lighting this idea.
Perception can be reality and when a program like GCU goes thru so many extreme changes with little to no warning or stated rhyme or reason it makes existing customers nervous/panic. As far back as I can remember BB has had the best gaming program/deals but rarely if ever promoted the details of it`s success. Meanwhile your competition consistantly brags about the stats/sales like in this link. They also confirm with mostly complete #`s how many total members(not always broken down as paid and free) they have. How many GCU members are there? What`s the breakdown between free members and paid members? The general thought is that with the perm price drop from $120 to $30(back to the pre-GCU pricing) in basically 1 yr time that something failed thus the price drop to "save" the program. Sucks that BB didn`t do the numerous upgrades that have been provided here which would allowed them to actually sell the subs for full price. There`s no way to convince me that recieving $90 less can be a good thing unless the program was grossly overpriced from day one. In any event the perception is not good and it would be nice to see some more GCU P.R. news the same way Walmart/Target/GS/TRU promote their respective adventures in the gaming market. http://www.vgchartz.com/article/253425/gamestop-profits-jump-11-in-2014/
I was once told that people came to Best Buy to find out about the Newest and Greatest gadgets. When I walk into a Best Buy store I walk into pretty much every other store. Best Buy has a chance right now to get back to their roots somewhat inexpensively by adding a tab to the Best Buy website that is dedicated to What's New. Whether its new tech or just new product with bigger and better features. Use this area to give those curious buyers an idea of what these new prodcuts can do for them. Lets get a Blue Shirt in every home with access to the internet!
It has been made clear that Best Buy wishes to expand the Geek Squad name to be more globally recognized and to utilize the brand for increased profits.
I believe Best Buy/Geek Squad is missing out on an opportunity to get into the competitive gaming scene. Riot Games, the creators of League of Legends is pioneering the world of competitive gaming and legitimizing it as a real sport. The United States government already recognizes it as a legitimate sport, providing travel visas for professional players.
Best Buy/Geek Squad should invest in sponsoring a professional team and/or creating an official Geek Sqaud team to put the face of Geek Squad in the competitive gaming scene. Not only would this give an incredible boost for advertisement and marketing but Geek Squad would have the potential to developer their own brand of PC Gaming gear to be sold.
In case you aren't aware of what League of Legends is, you can visit their official site at http://leagueoflegends.com/ and you can visit the League of Legends professional gaming site at http://lolesports.com.
Just to give you an idea of how big the competitive scene is for gaming, League of Legends sold out the Staples Center in California for the World Championships with a prize pool of over 1 million dollars. With thousands viewing the event live and hundreds of thousands viewing it via online streaming at lolesports.com.
If any company higherup wishes to discuss this further in a serious matter, I encourage you to email me back.
Thanks for your time.
Regarding Sony Ipod/Ipad Docking Speaker 200i
I shop at COSCO and bought over 7 large screen TV's over the past few years. Their return policy is legendary, and as a result I've bought without worry, and it seems everyone else has as well, as the store is always busy with people loading up. Stock is thru the roof. They also put a lot of thought into every product that they stock the store with. A good example is the Sony 300i speaker docking station for the ipad/ipod which I was able to buy at Best Buy for $214. My family members heard it, loved it and I went back to buy 3 or four more, and found it was sold out as a discontinued model.
Best Buy had moved on to the newer version which had a different jack no longer compatible with the older ipad/ipod, and millions of consumers still own those ipads, ipods. As I personally owned 2 ipads and 3 ipods with the older style jack, I found it incredulous that Best Buy would do something so stupid to discontinue a model that was easily selling out at each store, and replacing it with one that wouldn't be in demand until, lots and lots of the new ipads and ipod would have been sold, ie in about 3 years. Stupid, stupid, stupid, I thought, and I own 4800 shares of Best Buy, as well as shares of Cosco. Fortunately for me, I went to Cosco and found the Sony 200i speaker docking station for $150, and ended up buying four of em, and felt comfortable knowing I could return them anytime if I had got too many, not that I would need to as each family member loves it. Funny that Cosco would stock the cheaper version, Sony 200i, which was essentially the same as the 300i without the tuner, which sounds just as good, and cheaper.. Clearly, COSTO put some thought into what it put on the shelf, and continues to put in their limited twice the size of Best Buy BOX.
It's not the big box concept, Cosco is HUGE!!!. It's the thought put in by competent management, excellent customer service, and part ownership by everyone in the company that make Cosco a success. Best Buy would do well to go shopping at Cosco, and learn something. It's like American Airlines taking some pointers from Southwest.
I have been reading a bit about Best Buy's problems in the WSJ, Wired, etc,. Best Buy has gotten away from thinking like the innovator. If they want to utilize the best assets that they can provide over Amazon.com (online) or Apple, they need to think like a home user.
In your showrooms, start showing a combination of products being used as an innovator in a home would use them. For example, the XBox360 has had the ability to store or capture movies, music, etc,. from the cloud or from another personal computer for years; yet, Best Buy doesn't show these capabilities in their store. I suspect that the Geed Squad can do more then just tune TV's and PC's for novice users. Let them build systems that show off the cutting edge capabilities of the products that tied the many different systems together. Everyone has a PC. Show pictures, music, and movies loaded on the PC, then show how various systems (XBox360, PS3, iPad) can display these pictures. These are items that everyone has in their homes, but only the innovators take the time to figure out. This is where you can set yourself apart, by doing instore demostrations on how to set these up. Or maybe even YouTube videos that show this, that point people to Best Buy to get more help. How about just showing a Big Screen TV hooked up to a PC. Late Majority adoptors with PC's and Big Screens probably don't even realize how easy this is to do.
Use the assets that you have to your advantage.
While I am a frequent shopper at Best Buy, some other game shoppers may not be and many of those people may not know that your stores now sell pre-owned games. Aside from a small section in one or two of the circulars since the inception of the used game/game trade programs at BB I haven't seen very much marketing regarding it.
If you guys want to try to take a chunk of Gamestops' business away you're going to have to do an advertising blitz to get the word out. However, this may not help due to the disproportionate numbers of some games stores are being shipped back after an apparently lengthy processing cycle.
I've noticed 7-10 copies of some older PS3/PS2/360 titles that have been sitting on the shelves since they first arrived 3-4 months ago. They include copies of Two Worlds II for PS3 and Enter The Matrix for PS2.
Unfortunately another thing that may be lagging behind is price drops on these games and even if they are implemented quickly the price tags are not always changed on the products themselves.
Moreover, Best Buy really should get their lawyers looking at how exactly Gamestop skirts local pawn laws and is able to put out traded in products immediately after taking them in. I say this because the one month or MORE turnaround time from when items are traded in till when they are finally shipped back out to stores to be resold is hurting pre-owned game sales just as much as the lack of marketing dollars being spent on it.