The CEO of Best Buy spoke about the beating the retailer has received from critics. "You have to be thin-skinned," Brian Dunn said at the Consumer Electronics Show in Las Vegas this week. Negative feedback is "a gift. It's a gift you don't always care to open but it's a gift," he said.
Best Buy "stands for choice," and the store offers more variety than brick-and-mortar competitors, particularly big-box all-in-one retailers who have to be more selective about the electronics they offer, according to a report by Chris Moran on The Consumerist.
"We think of ourselves as a showroom for our vendors," he explained, adding that the other side of that is that he is now competing with many of those same manufacturers, like Apple and HP, who both have built successful businesses dealing directly to consumers.
To combat that, Dunn says that more customers are looking to Best Buy as the place to add onto or trick out the items they might buy elsewhere. "Customers are coming in to buy things that interact with things they already own," he explains.
Best Buy is coming off a holiday fiasco, after it cancelled orders days before Christmas because it received a bigger-than-expected response to seasonal sales. Dunn said the "silver lining" of that experience is that online shoppers are starting to see Best Buy as an e-commerce option, and not just a place to window shop before buying online elsewhere.
He shrugged off reports that called Best Buy's bricks and mortar stores anchors around the company's neck, instead calling them a "huge advantage," as they allow the company to continue to cater to customers who want to see the product before they buy.
But Best Buy plans to shrink the square footage of many retail locations, while others will expand to serve growing demand.
Dunn's public comments come about a week after a blistering analysis by Forbes's Larry Downes, who predicts the retailer is gradually going out of business. Despite the disappearance of competitors including Circuit City, Best Buy is losing market share, and its stock lost 40 percent of its value in 2011. Downes also details Best Buy's unpleasant customer service, and failure to integrate its Website into brick-and-mortar operations.
Dunn seems to be whistling past the graveyard here, positioning liabilities as strengths. In the coming retail apocalypse, real-world stores will be anchors drowning unsuccessful brick-and-mortar retailers. Successful brick-and-mortar retailers will make their stores convenient and enjoyable to shop in, while their salespeople offer knowledgable, prompt, and helpful customer service. Best Buy does none of these things. The fact that its stores are "showrooms" for vendors is a huge liability for Best Buy. Likewise, big-box retailers like Costco offer less variety of electronic merchandise, but greater convenience -- consumers can pick up a TV in the same place they buy toilet paper.
And there was no "silver lining" to the canceled Christmas orders. It was an unmitigated fiasco.
I stand with Forbes on this one. Best Buy is going down.
By the way, about Dunn's comment that you need to be "thin-skinned." I think Dunn meant "thick-skinned" -- "thin-skinned" means quick to take offense.
— Mitch Wagner , Editor in Chief, The CMO Site
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