Best Buy Co. (NYSE: BBY), which recently gave a dire prediction about the state of its future sales, has decided to cut back on the amount of inventory carried in each store during this holiday season, as it weathers the consumer spending downturn caused by the current economic recession.Many industry titans have indicated that this is the worst retail environment they've ever seen, and that list now includes Best Buy President Brian Dunn. Dunn indicated that the speed and depth of the recession caught the consumer electronics retailer off guard and by surprise. As a result, the retailer is curbing television commercials and is doing more to pump its lower prices through email and cheaper marketing methods.
Although Best Buy is now offering zero interest for 18 months on all purchases $499 and up, that's not good enough. If Best Buy really wants to get feet in the doors -- even in a recession -- it should offer no interest financing for all purchases above $19.99.
That's right, anything from the price of a new DVD on up. Trying to push sales of its recently-unveiled and overpriced Blue Label goods won't cut it. It should pull those goods until the recession has ended and re-introduce them. Customers aren't looking for products created with their opinions in mind. Right now, it's all about price.
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Reader Comments (Page 1 of 1)
12-09-2008 @ 4:19PM
BHarrison said...
Well, "common sense" dictates that not only Best Buy, but lots of other companies (probably most of them) will reduce their inventories to reduce their overhead costs due to the economic forecasts.
This will inturn SHARPLY reduce factory orders, and will create MORE UNEMPLOYMENT . . . it is all a vicious cycle. No one is sure what it will take or how long it will take for all of this to bottom out . . . That may be at the endo of 2009, 2010, or even longer. Nothing happens that quickly in the recovery process, does it?
"Common sense" would seem to be more meaningful than a lot of political / economic B.S. at this time. And once this bottoms out, it will take a long time for recovery to occur.
Now perhaps the American people will begin to realize why it is important for them to take an active interests in the politics of our country . . . now they can begin to see what it is going to costs them PERSONALLY. If you don't take care of "your business", then someone else will, and to your detriment also.
12-10-2008 @ 7:30AM
Dave McBlues said...
I get your point, but it is completely senseless. If 300,000,000 Americans take advantage of no interest financing of a $19 video, that is an additional $5.7 BILLION in consumer debt we don't need. We'd just have to bail that sector out sometime in the future.
My advice to retailers is to price items to sell rather than use gimmicks that lead consumers to even more debt. If they can't be competitive at that, or if they just don't have the right concept and/or goods, they should just go out of business.