$43.54
0.41 (+0.95%)
Best Buy Co., Inc. (BBY)
CAPS Rating:
The Company is a specialty retailer of consumer electronics, home-office products, entertainment software, appliances and related services.
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Electronics consumers are now savvy and knowlegeable about technology. Example: A consumer looking to buy a netbook, laptop, or PC will know that if he or she buys from Best Buy hundreds of thousands or possibly millions of other people will have the same netbook, laptop, or PC. Thus sacrificing individualism and importantly speed advantage (from daytraders to last minute Ebay bidders a.k.a snipers) if you bought from a retailer who specializes in computers and even better if they sell peripherals/hardware for safer custom built OVERCLOCKED computers bringing back the word PERSONAL in PC. Yes, all you hardcore gamers who want to push the limits with gamimg experience.
P.S. Don't get me wrong there will be people who will buy from Best Buy for the convenience and practicality over savvy enthusiasts who go to the extreme.
This seems to be a very weak argument. 1) On the basis of individuality, you would have said "Apple will fail with the iPod. No one wants to have the same MP3 player as everyone else" Yet, the iPod is a core profit maker for Apple and is a huge success. Individuality is hardly an issue with Best Buy; they have a wide variety of laptops, PCs, etc. They carry as many laptops in store and online as there are made on a large scale...just like TVs. Whens the last time someone said "Nah, I won't shop at Best Buy because I want a TV other people don't have". People are bound to have the same products because some companies do the best job of manufacturing them....you may argue that on the point of....2) You believe getting a custom made PC yields better results and can be made per individual basis. Yes, and no. Can they be made? Yes. Can they give a more specific system a person wants? Yes. Can they be made at a reasonable price? Not so much. I have built all my computers in the past. Long ago, it actually gave me a better, faster computer for a cheaper price. Now, its not even close. The hardware out there on a large-scale are just as fast, and cheaper. Not to mention that many large scale producers recognize that, with how cheap they can make computers, they can make relatively specific types/categories of computers (for the home user...for the businessman...for the gamer...etc) and do very well with them...and Best Buy will carry them. 3) Hardware is not Best Buy's only business....Games and gaming systems, movies, music, software, household appliances, TVs, and basically all electronics. They have it, and they offer some of the most competitive prices. And with Circuit City out of the picture, Best Buy is looking to collect alot of business from those customers.
IT's to bad they have a high turnover rate as far as employees go.Someone special i know works at one ,and they lose some good sales people to large corporations.One store in peticular though,is the smallest in region ,but still somehow manages to sell volumes in the top 2-3 % .Now they may want to limit employees worked hours.
The "savvy enthusiast" makes up such a small percentage of the overall consumer electronics market. The majority of consumers have absolutely no idea what the word overclocked means or how or if it would benefit them. Not to mention that generally speaking, custom built PC's usually cost more. In fact BBY's biggest threat to market share will be Walmart due to an abundance of low end, low priced electronics. I still think that best buy will come out on top due to partnerships it has developed to grow its market share in high margin cell phones and from reducing capital expenditures while refocusing its labor force on customer facing employees (sales associates) and gobbling up market share from now defunct Circuit City and Tweeter / Sound Advice.
Sorry but that's a horrible pitch. How does one that calls thyself a value investor not spot a value when they see it? The average person shopping for electronics is not savvy or knowledgeable. I think you're substituting yourself as the average consumer. The fact is the average consumer isn't overclocking their processors (most wouldn't even know what that meant). With Circuit City going under Best Buy is best value buy in the last decade.
Bingo, you nailed it. I worked for the PC department in Best Buy for 2 years. And the people that come into a Best Buy looking for computers are not the tech savoy crowd. You rarely see a gamer come into the store to purchase a PC or notebook. The majority of PC buyers in Best Buy are parents shopping for college computers for their children. Or families shopping for a family computer. These are the crowd that would rather come into a store and speak with someone face to face as opposed to purchase over the internet. Saving money online isnt something they really care about. They would rather pay the extra few dollars to talk to a knowledgable sales associate and have a place they can bring their notebook or desktop to in the event they have a problem in the future.The authors post is Biased and has no factual details whatsoever.
I purchased all my electronics from walmart and have gotten everything I would expect from them. You can pay double, triple but for what? A bunch of things they show you in store that a regular person would never use. Eventually the deals made with BBY by producers will be made with Walmart and the game will change. Plus, I do 99%of my research on the internet before leaving my front door. BBY would be better off just having internet access terminals at stores and fewer sales associates being I as well as many others have very little trust in what they say. Sorry guys even though BBY will do better in the near to mid future but the long term it will fall or become a walmart chasing nitch as the rest. Later
The majority of Best Buy's customers are NOT savvy or knowledgable about technology at all. They go in for the superior customer service (if that makes you laugh, try asking associates at Wal-Mart or Fry's anything about their products...) and Best Buy gives them what they need. The associates are trained pretty well IMO, especially considering turnover, and having more line-level employees in front of customers will only help Best Buy. This is a terrible call; BBY will be outperforming for years to come.
I could not agree more with your comments on Wall-mart. The staff knows very little if anything about the items they sell. Wall-mart would rather save the money and just sell items for cheap. I agree. You say the average customer is not a tech person. Is this the class BBY would like as customers? Do you think the tech people population is growing or shrinking? Is the average person old (above 50) or young that shop in your store? I realize BBY has spent an incredible amount of money turning stores into living room look-a-likes and training and selecting sales staff that speak with customers as though they are related to the customers. I really don’t see this helping long term. The tech population will continue to grow, more quality items will arrive on Wall-mart and Target shelves, even the non savvy will learn how to use a computer and the internet, the non-tech population will continue to rapidly shrink and finally BBY will become an internet company with very few actual store locations. The good thing is with all these electronic companies’ going out of business it’s only good for BBY. The demand for a large Electronic retail store is falling and will continue falling.I once owned stock in BBY and my best friend’s family member works at corporate here in MN with a very nice window view. These ideas on BBY are shared between us both. Short/mid-term good, long-term DEAD or mainly an internet company that I and he thinks would be best.
Have you ever been to a Walmart Electronic Dept? It is very limited, regardless of price BBY is a place where people enjoy going. Ok thats my opinion, but still BBY is a good place to go. The internet is changing the way people shop that is true but we are not going to change to a coach potato nation, order everything online and wait for it to come. People still enjoy going to places directly, they still and will enjoy going to BBY in the future as well.