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With Circuit City now long gone, everything should be coming up roses for Best Buy, right? No such luck. America's biggest electronics retailer today announced that it will be shuttering 50 of its big-box stores after posting a fiscal fourth quarter loss that was due partly to restructuring charges. It has other big changes planned: a new compensation model for employees tied in part to customer service; 100 new Best Buy Mobile stores; $800 million in cost cuts in three years; and a goal to increase online revenue 15%.
Writing for CNET, Larry Dignan sums up Best Buy's problem thusly: "It can't be the showroom for electronic sales online." Best Buy's biggest foe is, of course, Amazon, and Dignan believes the only way to keep up in an e-commerce world is to improve customer service. Best Buy appears to have gotten the memo: It plans to bulk up its loyalty programs (sample perk: free Geek Squad house call for Reward Zone Silver members), switch to free shipping, and make returns easier. But Dignan still sees two issues: The company is selling more Apple products, which return less of a profit for Best Buy, and, well, there's still Amazon.
