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Are you a Best Buy "angel" or "devil" ?

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Are you a Best Buy "angel" or "devil" ?

Old 11-26-04, 10:03 AM
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Are you a Best Buy "angel" or "devil" ?

Monday, November 22, 2004

Retail's holy grail
Best Buy aims to attract 'angel' shoppers and exorcise its 'devils.' But chain's CEO acknowledges the strategy could backfire.

The Wall Street Journal

Brad Anderson, chief executive officer of Best Buy Co., is embracing a heretical notion for a retailer. He wants to separate the "angels" among his 1.5 million daily customers from the "devils."

Best Buy's angels are customers who boost profit at the consumer-electronics giant by snapping up high-definition televisions, portable electronics, and newly released DVDs without waiting for markdowns or rebates.

The devils are its worst customers. They buy products, apply for rebates, return the purchases, then buy them back at returned-merchandise discounts. They load up on "loss leaders" - severely discounted merchandise designed to boost store traffic - then flip the goods at a profit on eBay. They slap down rock-bottom price quotes from Web sites and demand that Best Buy make good on its lowest-price pledge.

"They can wreak enormous economic havoc," Anderson says.

Best Buy estimates that as many as 100 million of its 500 million customer visits each year are undesirable. This year, Best Buy has rolled out its angel- devil strategy in about 100 of its 670 stores, including the one in Westminster. It is examining sales records and demographic data and sleuthing through computer databases to identify good and bad customers. To lure big spenders, it is stockingmore merchandise and providing more appealing service. To deter the undesirables, it is cutting back on promotions and sales tactics that tend to draw them and culling them from marketing lists.

The trickiest challenge may be to deter bad customers without turning off good ones.

"I want to be very careful," Anderson says. "The most dangerous image I can think of is a retailer that wants to fire customers."

It couldn't bar devils from its stores. But this summer it began taking steps to put a stop to their most damaging practices. It began enforcing a re stocking fee of 15 percent of the purchase price on returned merchandise. To discourage customers who return items with the intention of repurchasing them at an "open-box" discount, it is experimenting with reselling them over the Internet so the goods don't reappear in the store where they were originally purchased.

A corporate task force concluded that 20 percent of Best Buy's customers accounted for the bulk of its profit.

The most-desirable customers fell into five distinct groups: upper-income men, suburban mothers, small-business owners, young family men, and technology enthusiasts. Anderson decided each store should analyze the demographics of its local market, then focus on two of the groups and stock merchandise accordingly.

The Westminster store targets upper-income men with an array of pricey home-theater systems and small-business owners with network servers, which connect office PCs, and technical help unavailable to other customers.

On Tuesdays, when new movie releases hit the shelves, blue-shirted sales clerks prowl the DVD aisles looking for promising candidates. The goal is to steer them into a back room that showcases $12,000 high-definition home-theater systems. Unlike the television sections at most Best Buy stores, the room has easy chairs, a leather couch and a basket of popcorn to mimic the media rooms popular with home-theater fans.

Anderson says early results indicate that thepilot stores "are clobbering" the conventional stores. Through the quarter ended Aug. 28, sales gains posted by pilot stores were double those of traditional stores. In October, the company began converting 70 more stores.

Best Buy intends to start exorcizing the devils and rewarding the angels at the remainder of its stores in the next three years.

Three types of 'angels'

Store clerks at Best Buy receive hours of training in identifying desirable customers based on their shopping preferences and behavior. Here are three of the categories of "angel" shoppers and the nicknames the store uses for them:

Barrys: High-income men, who tend to be enthusiasts of action movies and cameras.

Jills: Suburban moms, who are busy but usually willing to talk about how a purchase could help their families. The company hopes to lure Barrys and Jills by helping them save time by alerting them to sales on preferred items, coordinating service calls and offering the services of a "personal shopper" to hunt for unusual items.

Buzzes: Male technology enthusiasts, "early adopters" who are interested in buying and showing off the latest gadgets. At stores popular with young Buzzes, Best Buy is setting up video-game areas with leather chairs and game players hooked to mammoth, plasma-screen televisions. The games are conveniently stacked outside the playing area, with the glitzy new TVs a short stroll away.

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Old 11-26-04, 10:59 AM
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I'm pretty sure this has been posted before. I read it bfore and think that before I was in between but now will do my best to be a devil.
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Old 11-26-04, 12:17 PM
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1. I don't consent to the value judgment
2. I could give a shit about any store engaged in profiling

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Old 11-26-04, 11:41 PM
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Old 11-27-04, 02:54 PM
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screw best buy. i dont condone the scammers who try to take advantage but if they are gonna try and "lure" me into buying their big, overpriced stuff so the CEO can make an extra buck they f them. if i want to buy one dvd or a "loss leader" i will. you price it, if i want it, i but it. period. dont try and make me buy something else and dont you dare try and ban me from the store.
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Old 11-27-04, 07:33 PM
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I'm an angel. I don't give a crap about the bargains, I don't ask for help, I don't return stuff. I just go there to pick up stuff they have in stock (since their stores are everywhere) when I don't want to wait a week to get it online. Add the rewardzone points and my cashback points on my credit card, I get a bonus as well.
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Old 11-28-04, 10:40 AM
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Somewhere in between. I usually by CDs and DVDs on release day/week when they are super cheap, and generally don't buy anything else.

But I never price match, rarely bother with rebates etc. Usually too much effort to save a couple bucks, given that 99% of the time I'm just buying DVDs and CDs there.

I'd never buy an expensive tv or anything there as there's always better deals to be found elsewhere on those kind of items at places that you can barter with.
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