Gotta tell you my latest retail experience. There are so many reasons I don’t like the bricks-and-mortar shopping experience. Most relate to my impatience, and the way retailers waste people’s time.
A couple days ago, I walked into a Best Buy store to return a defective music DVD — simply to get another of the same title, since mine had nothing on it. (Thank you, Music Industry, by the way, for your swell quality control.) This item was a gift (had no receipt), so returning it by mail wasn’t an option. How long could this take, I thought: 4-5 minutes? In your dreams….
Close to 30 minutes later, I finally walked out with a new DVD (which I can only hope will play), my mind numb from standing, staring, and waiting (no music was even playing!) while the multi-employee/manager process dragged on. And I had to settle for another title by the same artist, since they were out of the one I was trying to replace! About eight people returning God-knows-what more pricer stuff than I came and left while I waited. Wow, what a wonderful, rewarding shopping experience.
I’m a big fan of Best Buy — the company’s based about two miles from where I sit, I know many people there, and myself and my colleague Randy Geise were interim Content Director and Design Director, respectively, on the team that built their great ecommerce site, launched in early 2000 (now clocking $1 billion in sales annually, and growing). But their service sure sucked in this case. And it’s hardly the first time I’ve had a frustrating experience in one of their stores, and many others like them. So I rarely ever go into one, and this experience just serves to remind me why I don’t.
My choice is increasingly buying online, and returning by mail when necessary — the latter having been made pretty painless, thanks to the lead Amazon and others set for the online retailing industry some time ago.
Is it any wonder the growth of online retail sales is skyrocketing? Let’s look at some numbers just reported in the business pages yesterday. For the month of December, Best Buy (NYSE: BBY) had a same-store sales increase of 5.8% over the previous year — well ahead of what analysts thought would be only 4-5%. (That is, from 16% to 45% better!) Also, it was more than double the same-store sales gain in the previous year, which had been only 2.5%. The market reacted very positively, driving the stock price up 8.2% in just one day.
But let’s drill in a little further. According to the Wall Street Journal, Best Buy now defines same-store sales as “those at stores open for at least 14 months, as well as remodeled and expanded locations and from the company’s Web site.” Did you catch those last little three words? I don’t know how long that’s been included in their comparisons, but it’s no small point.
Why? Because, friends, it was also reported by BBY (though not mentioned in most media accounts) that its online sales increased *40%* over the previous December! Sure, there was a nice increase in gift-card purchases, too: 20%. But no increase was higher than online sales (and many of those gift cards were in fact purchased online). You can be sure it had a big effect in driving up the same-store sales figure, and the stock price. Online is where the real growth is in this business.
Yes, BBY is a “buy” in my book — but know why you’re buying it. What myself and my colleagues believed in so passionately back in 1999-2000 is all coming true. Thankfully, then-president and now CEO Brad Anderson believed with us.
I had no idea you went to so much trouble returning the Nora Jones dvd you gave me!
Thanks, hubbie…no wonder you were late for dinner.
A billion is a lot of bucks. I would think the online component is now Best Buy’s largest single entity, larger than any single region…of course I can’t recall how that’s all broken down anymore…do you?
Nothing like having your better half getting in a little dig in public
Yes, PXLated… you know who you are 🙂 …and that billion $ a year run-rate for BBY’s web site is already old news, since the 40% increase in December will surely push the annualized number up nicely. I don’t recall how (or even if) BBY reports revenue breakdowns by region. In fact, for some time, they weren’t even breaking out online sales separately, but they obviously started to recently — or at least percentage increases. Not sure they actually do report sales for online (didn’t listen in the conference call myself), but a billion $ in online sales (approx) was cited by Internet Retailer a couple months ago.
yeah, Carlos, she just hadn’t heard my story on the DVD return till she read my blog post 🙂 …sometimes, it’s just easier to write about these things than wax on with people about my long, frustrating customer-service stories (they happen a lot!)….so, I held off for a while, thought about it, saw the yearend reports on BBY, and figured, hey, what’s my little experience in the overall scheme of things? so, I turned it into a positive story….
and now I’m convinced even more that online shopping is where it’s at!
A followup: perhaps a bad online shopping experience is even worse for the retailer than one in a bricks-and-mortar store…as this story suggests.
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PING:
TITLE: Total (online) Holiday Spending Hits $25 Billion
URL: http://web-tones.typepad.com/home/2005/12/harris_interact.html
IP: 204.9.178.8
BLOG NAME: Web-Tones
DATE: 01/08/2006 12:32:12 PM
Looks like the online retailer’s are doing just fine Total Holiday Spending Hits $25 Billion, thank you very much. This is a 25% increase over 2004 and the trend is probably not surprising to anyone that tracks these numbers (I