Best Buy’s CEO steps down abruptly
Brian Dunn poses for a photo with the first shoppers in line at Best Buy for Black Friday hot holiday deals on Nov. 25, 2011 in Eden Prairie, Minn. Dunn resigned today as CEO of the company.
Kai Ryssdal: There was a bit of corporate news amidst all the politics today. The CEO of Best Buy, Brian Dunn, resigned this morning. Interesting, seeing as how just a couple of weeks ago, he was talking about a new turnaround plan for the struggling electronics retailer.
Part of Best Buy's problem has been something called showrooming -- when people go to Best Buy, check out the showroom, look at products and get advice and then buy online for less.
Marketplace's Stacey Vanek Smith reports on how Best Buy's response to showrooming could change the way you shop.
Stacey Vanek Smith: All those smartphones shoppers have been snapping up at Best Buy have made them a little too smart. Consumers are using their phones for on-the-spot price comparison, says Jeremy Brunelli, with Consumer Edge Research.
Jeremy Brunelli: They’re going in, they’re kicking the wheels. They scan it and say, 'Well, this online guy has a better price, so I’m going to purchase from them.'
So Best Buy pays for the roof over the shopper’s head, the employee who answers her questions, the catchy display that attracts her and then some online discount shop reels in the sale.
Brunelli: There’s Abe's of Maine, there’s TigerDirect, Butterfly.com. Many of these players only exist because they have that pricing advantage.
So what’s a big box retailer to do?
Matt Arnold: There’s only one way that you can solve the issue of showrooming. And that is to be price competitive.
Matt Arnold is a consumer analyst with Edward Jones. He says Best Buy is in a good position to do this. The company controls about 20 percent of the consumer electronics market in the U.S. He says Best Buy’s turnaround plan of shutting some big stores and focusing on smaller outlets will also save money and help lower prices.
Arnold: It all comes down to a lean cost structure and exercising the clout that they have with their vendors.
Consumer behavior expert Jen Drexler says all kinds of retailers are struggling with this.
Jen Drexler: The tension between bricks and mortar and online retailers is still the wild, wild West. And the people who are able to succeed are the ones who are able to build a brand that works seamlessly across both.
Then stores can have the brick and mortar experience to lure the shoppers in and competitive prices to set the hook.
In New York, I'm Stacey Vanek Smith for Marketplace.