Best Buy cut its forecast for the coming months due to slower demand, citing inflation.
Same store sales are expected to fall 11 percent for its 12 month period (versus the 3 to 6 percent drop it predicted in May). And for the quarter that ends this week, the chain expects a 13 percent decline in comparable sales from last year.
Best Buy CEO Corie Barry said, “As high inflation has continued and consumer sentiment has deteriorated, customer demand within the consumer electronics industry has softened even further, leading to Q2 financial results below the expectations we shared in May.”
But she said the chain’s sales are still higher than they were before the pandemic.
Best Buy joins other retailers including Walmart and Target in warning of lower sales or profits.
But the retailer said its inventory levels should be flat with the year ago period by the end of July.
Separately, on Monday, Best Buy announced its first small format, “digital-first” store. The 5,000-square foot location opened Tuesday in Monroe, North Carolina (looking a lot like an Apple store).
It includes the “best” products in certain categories including home theater and audio, computing, headphones, wearables, fitness, cell phones, cameras, smart home, small appliances and more. Based on the Monroe Best Buy website, no car audio products are shown.
To purchase an item, shoppers scan the QR code on any of the products on display. Then a salesman retrieves the item from the back of the store, said The Verge.
This is going to fail. The CEO is dead set on running the stores with a skeleton crew. This is her answer to lowering overhead even further. She refuses to understand Best Buy niche of actually having employees who know what they’re selling. Those time are long gone now. Everyone in the store are simply box pushers that are pressured to sell whatever the current sales focus is. Lately it’s this subscription they call Totaltech. Their employees are literally berated if they don’t attach it to a sale. Which in turns forces many new hires to quit once they realize they’re being treated as if they’re in a commission environment when they’re not. I have friends that work there, and they all say the same thing, this company no longer cares about it’s employees.
Can you say “catalog showroom”?
…shopper scans a QR code… then the “SALES PERSON” retrieves the item from the back of the store
Anybody else see the goofyness in this claim…?
From the Verge article:
“You could also get live shopping help while in the store with an expert from someone in Best Buy’s “virtual store” via voice call, video call, or online chat.”
So BBY is moving to a virtual support/sales staff with a physical showroom. That’s an interesting bridge between traditional brick and mortar retail and shopping from your recliner. In some ways it could work better than an undertrained and incapable store staff that parrots the bullet points on the price tags. It’ll likely result in lower payroll expenses. However, that sure doesn’t feel like an “experience” that gives BBY any advantage over delivering an honest service experience for the customer. Time will tell….