Customer Intelligence Analysis of Best Buy Downfall

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This article titled “Best Buy struggling as shoppers flock online” was published in San Francisco Chronicle caught my attention and inspired me to question the title assertion.

“The one critical thing we offer the world is choice,” said the Best Buy chief executive officer Brian Dunn in a March 2012 phone interview. He was trumpeting in particular his company’s role in guiding customers through the expanding smartphone universe.

“We provide the latest and greatest choice of all technology gear, from Apple products to Google products, and that brings more opportunity to help people put technology to use. That is a great place for us to be.” A week later, reality intruded. The consumer electronics retailer posted a $1.7 billion quarterly loss and announced it would close 50 stores nationwide. On Tuesday, Dunn resigned.

Later in the same article, this reason was cited to explain Best Buy’s fall from grace of consumers:

“Shoppers are finding more choices online, primarily at Amazon.com, where they can often find a better deal.”

Price is the favorite excuse of every salesman who failed to earn the trust of the customer. It is interesting to look at the Customer Intelligence Analysis of the feedback given about experience of doing business with Best Buy. We have looked at 185 customer stories that describe their experience during a period from 1/1/2012 till 4/17/2012, the date this article was published.

Snapshot of the CIA dashboard


I would like to point out that the “price” was opined on only 4% of all opinions expressed, and the sentiment is statistically neutral while “customer service” is the most mentioned by customers at 42%. It is decidedly disappointing to them with a “general satisfaction” score of 0.67 (see the score legend at the top right corner of the image above).

Perhaps the analysis of a larger number of customer feedback for a longer period of time would show exactly when Best Buy started to lose its competitive advantage and push their customers away. However, I would like to suggest that the “greater selection” strategy has definitely played an important negative role in the Best Buy decline. There are three reasons for this suggestion:

  1. No brick and mortar store, regardless how big it is, can out-inventory an online operator like Amazon.com that does not need to have an inventory on hand to sell products and have a network of store to fulfill orders;
  2. A very large selection of products on shelves results in poor support for most products as the store personnel cannot keep up with knowledge requirements for such a vast number of products. Many customers come to store seeking for help to select a “right” product for them, and Best Buy staff fails to do it;
  3. The larger selection leads to lower quality of products being sold to consumers. Look at “reliability” bar on the chart above—26% of all opinions mined are indicating a miserable satisfaction with the quality of products sold by Best Buy stores
  4. Snapshot of snippets screen


Couple this problem with the well publicized Best Buy return policy issues, and it becomes clear that it is easier for customers to deal with online stores than less expensive.

Republished with author's permission from original post.

Gregory Yankelovich
Gregory Yankelovich is a Technologist who is agnostic to technology, but "religious" about Customer Experience and ROI. He has solid experience delivering high ROI projects with a focus on both Profitability AND Customer Experience improvements, as one without another does not support long-term business growth. Gregory currently serves as co-founder of https://demo-wizard.com, the software (SaaS) used by traditional retailers and CPG brand builders to create Customer Experiences that raise traffic in stores and boost sales per customer visit.

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