Best Buy and the Devils

Monday, November 08, 2004
I have started reading the Wall Street Journal on a daily basis. The CFO of my company, who has recently left, used to get it delivered to him every day. Since he is gone the receptionist has been nice enough to give me the paper instead. Its funny, when I was young I thought I would never read the WSJ. I thought only old stuffy men read that paper. I guess I have become old and stuffy.

I found an interesting article today on the front page about Best Buy. It seems as if Best Buy wants to get rid of the "devil" customers. These are the customers who only come to the store to buy loss leaders like discounted DVDs or those who return merchandise to the store only to buy it back when it gets sold as an open item.

I have my doubts about this strategy but it looks like it is working at some of the pilot stores. There is no doubt that as a business it is better to focus on your higher profit customers than those who cost you to lose money but my doubts come from the ability to correctly identify and thus cater to the right customers.

I'm the perfect example. I am a high-income male who is a tech geek. I'm probably Best Buy's perfect target demographic except for one thing, I love a good deal and don't just waste my money. I often go to Best Buy just because it has great deals on things like DVDs. Since I'm used to shopping there I will often go to buy other items too. Now if Best Buy does away with some of its great deals I will be less likely to shop there for other things. I find myself going to Best Buy sometimes just to see if they have any good deals and end up buying something else.

Will the strategy work, I don't know. But it will be interesting to find out if Best Buy continues with the strategy and to see where it is in 5-10 years.

3 comments:

Kat said...

their strategy has worked for me - i don't shop there FOR ANYTHING anymore.

Meghan said...

It's kind of in the name, isn't it? Their products and their prices are supposed to be the "Best" buy. Market stratagem or not, it seems silly to me to want to turn away ANY customers, especially considering the economy as it is.

ps- Sorry I didn't get back to you in time on those essays. Had a little time crisis. I did read them though...you made good points, you just needed a slightly more defined through-thought. The best essays are ones that begin by telling you what they are going to talk about, talk about it, and then tell you what they just talked about. Silly, I know, but it gives the reader a better chance of sorting out the subject in their heads.

Anonymous said...

I may never know if Best Buy's strategy works. At the one near us, the employees are hard to find and then don't know much about the products. After two bad experiences, I have chosen not to even check their prices. I just go to Circuit City where the employees have been helpful every time (and the prices comparable to Best Buy based on past comparisons).
-John