Economics/Geekonomics

Best Buy CEO Resigns. Now what?

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In case you were too busy posting pictures on Instabook or Facetagram, the CEO of Best Buy has resigned. This caused a lot of discussion and some weird stock fluctuations.

Bruce Upbin at Forbes says he felt Dunn had to quit, citing the famous Downes article on why Best Buy was going out of business.

My take?

  • The departure of CEO Dunn indicates that Best Buy plans to keep making massive shifts and is at least vaguely aware they have to. We haven’t seen it all yet.
  • Dunn’s background is telling. He literally worked his way up from sales associate in 1985 to CEO. He’s experienced – but also he may have been tragically old-school. Wether he can’t move with the times or his replacement is symbolic . . . his replacement is symbolic if you get my drift.
  • Best Buy is going to be fighting public opinion here since their challenges, cuts, and now this make them look quaintly old-school. This could be another case of a tarnished brand – and that’s a challenge they’ll have to overcome.
  • Best Buy’s challengers are many – sure there’s Amazon and Apple, but they were – and are – being nickeled and dimmed by others. Streaming replaces DVDs, DLC replaces in-store game purchases, Target is expanding to be an everything store, and you can still get your fancy appliances at a number of different places. There is, simply, no reason for Best Buy to exist as a unique entity.
  • The kiosk-like approach to stores may be viable, however. If they can leverage a few big warehouse stores and a lot of “starlets,” get some brand awareness, and find the right niches/services they may make it.
  • That being said, I see one advantage they may have being service, and it hasn’t been too impressive.
  • I still wonder what they can do in the age of vending machines for tech. I just don’t see them taking advantage of that.

In the end, I’ve got a gut feel that Best Buy is going to fade away in a Radio Shack like way. I can see a way out, but until I see what Dunn’s replacement does, I’m not going to count on it.

Now, ask what happens if they fade into obscurity. Who’s going to get blamed? Who will others target? Who will step into their place?

– Steven Savage

Best Buy Layoffs and A Sign Of The Future?

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Best Buy Lays off 400+ people, closes stores.

I know, I’ve been of the opinion Best Buy is in trouble.  I’ve agreed with those various analysts on the issues.  So on the surface, the fact I’m not surprised by this is, well, not surprising.  I figured it was coming.  In fact, I figure more will come.

But what is interesting is how Best Buy seems to be putting more focus on Best Buy Mobile, smaller, “Kioskesque” stores.  A focus on smaller stores, more on mobile and related gadgets?  There’s a lot to that . . .

  • First of all, this seems like a viable strategy.  Focused, organized, standardized stores that are small and cheaper to run make sense.
  • Secondly, these stores could be easily resupplied from a central location (suggesting to me that, much like the Safeway delivery service, stores could serve as warehouses).  This could mean big stores being repurposes may be a logical focus (and may limit layoffs).
  • Third, these smaller stories could get more easily set up or torn down as needed.  Limited risk, faster adaption, and faster to take on rivals.  These stores could even be piloted easy.
  • Fourth, and this may seem out there, but in an age where you have vending machines with iPods and DSes in them, I could see experiments with a Best Buy vending system.  If we’ve got automated convenience stores, Redbox, and iPod dispensers, this isn’t too outrageous.  Oh, and it’s 24/7 . . .

– Steven Savage

Flight Control Rocket: Taking New Payments WAY to far?

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I have to say, it sounds like it.  It sounds like they’re monetizing the crap out of the game, and not in a good way, but in the “pay for anything, including a high score way.”

I’ve only just heard about this, but my first impressions are the game is a bit of an experiment/overindulgence in the free-to-play/more-you-pay strategy that’s way, way out of hand.  I’m not surprised – some people are going to take advantage of the model.  I’m concerned about how this plays in modern media.

Of course we know that even if this “isn’t it,” some egregious, bizarre variant of the Freemimum/Pay-to-play monetization model(s) is coming.  That variant will be so annoying, it will get a lot of publicity.  At that point, predictably, many will question the model.

The model in question is just that – a model.  How you use it is the real question, but I’m suspicious in the world of freemium and other different monetization models, mixing up the application and the model is a risk.  In a 25/8 news cycle, things move fast, including predictions of demise of something (ask Twitter), and the brave new world of  new monetization can be called into question in an instant, leaving us to sort out the reality from the bull.

So this story doesn’t surprise me.  But I’mm waiting for the inevitable “freemium/whatever-method is evil” news fest that I feel is likely.

– Steven Savage