As most of us heard BestBuy has been reporting better earnings this year then any other retailer. With the closure of CompUsa, I believe there is only one other retailer that can compete with them, CircuitCity. In the following article I will try to exam why BestBuy is doing so much better than the other retailer.
Customer Service / Installation
We the consumer like to feel that we are important when shopping at these big stores. Bestbuy has been the leader of making us feel special and the only one since CircuitCity doesnt offer this. BestBuy offers a Rewards Zone Card which is a point card that you get. For every $1 dollar you spend you get 1 point, for every 250 points you get a $5 gift card. Pretty nice if you weigh that buying a tv will cost you way over $1000 and you get $25 back from that purchase. BestBuy used to charge $9.99 a year for this service but since they have made it free the last year they have seen a growth of over 17 million users in one year from 7 million, reported by
Reuters.
For the novice consumer buying a new computer or networking your home can seem like a overwhelming task. For those people BestBuy and CircuitCity offer a in home installation and consulting service. I believe that BestBuy has the edge on this service because they have been able to brand their name for this service for much longer. Most people will be recognize the name Geek Squad then Firedog (which is CircuitCity's). As computers and networks become more complicated I am sure that this area will have huge growth in the future.
Shipping and In-store Pickup
As a busy consumer like myself I find free shipping and in-store pickups the greatest thing ever. For anyone that is not familiar with in-store pickups, it is where you buy something online and then pickup at your local store. The concept of this is great, you can search through items that you want to purchase at the comfort of your own home and then pickup at the store so that you don't have to wait in lines to get your stuff nor do you have to wait to get your product in the mail. The problem is that it doesn't work that seamlessly. In most cases like at BestBuy you tend to have to wait 20 - 30 minutes for them to find your product. To offset this CircuitCity has a 24 minute guarantee that states that they will have your product ready for pickup in 24 minutes or they will give you a gift card worth $24. This of course does not include checkout time or wait in the in-store pickup line. When dealing with CircuitCity I have never had to wait to get my product and love that they have this guarantee if I had to wait.
Free Shipping, who doesn't like free shipping. When you shop online like I do, you are always looking for a way to get it to you cheaper. CircuitCity offers free shipping on most products over $25, BestBuy doesnt.
Home Theater
With the growing amount of HDTV's becoming more and more affordable it becomes important that you have the right speakers, lcd tv mounts, cables and other equipment to go with your tv. Again for a novice shopper or even an experienced shopper this can be very difficult. You want to make sure that everything you buy is compatible with what you have or gonna buy. BestBuy offers their Magnolia department which only specializes in home theater. This is huge for anyone who has had to deal with a high school or college student sales representative that seems to know less than what you know. Having a specialized team that only deals with this product, you are more likely going to get the information and support that you need to make your home theater work for you. This is why when I was shopping for my home theater system I went to BestBuy, since I was planning to spend about $3000 I wanted to make sure I was able to deal with someone that knew what they were talking about.
Conclusion
I believe that BestBuy is doing better because they have a better in-store experience. Since most people do not shop online, even though it has gone up over the years CircuitCity is just not able to keep up in the in-store experience. CircuitCity free shipping and in-store pickups are not able to compete with rewards and knowledge sales staff.