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A Big Brand Tumbles from Bluster to Fluster

brand management

by Kenneth Rudich

A big brand name mired in trouble has recently unvieled the steps it will take to try to regain a firm footing.  If or until it succeeds, it likely will be living off the fumes of its once admirable past.  And who knows how long those fumes will actually last?

A Broken Brand

Best Buy, who managed to outlast big box competitors like CompUSA and Circuit City, is currently in a fight to curb the exodus of customers to other retailers such as Amazon, Apple Stores and Walmart.  It turns out that consumers have been using Best Buy’s stores as a product testing ground before making a final purchase elsewhere.  This trend has taken a significant bite out of its sales, especially among tv’s, digital cameras and video game consoles.

In response, Best Buy will retool by concentrating more of its effort on mobile.  It also intends to layoff 400 employees in management and support areas, close 50 big box locations in the U.S., and decrease its cost of goods sold.  It estimates a yield of more than $800 million in cost savings by 2015.

According to Best Buy Chief Executive Brian Dunn, the company will reinvest part of the savings “into offering new and improved customer experiences and competitive prices.” 

How the Brand Broke

No doubt this idea sprang, at least in part, from the wealth of customer complaints the buying public has been seeing for quite some while now on many social networks.  There’s been an indelible focus on substandard customer service and support, as well as the absence of truly competitive prices.  In short, it doesn’t offer the best buy.

To wit, here’s one real-life example: ‘Actually, it’s mostly Best Buys (sic) fault. Their customer service is really bad.  I was once told “too bad, you’re only one customer.” And I haven’t been back for a major purchase since.  Appliances come from Spencer’s, TV’s from anyone but Best Buy, since every other store has about the same inventory and they all price match.”

And here’s another: “If the savings was only $5 I would have bought my TV at Best Buy instead of Amazon.  The savings was $300, plus another $60 in sales tax.  And I didn’t get the hard sell to buy a $200 service plan.”

And one more for good measure: ‘It’s the customer service.  During the holidays I was attempting to purchase an item under $50 and they acted like they could care less.  Then I asked a question where I could find another item and the service rep replied “don’t know” and walked away.  Two days later I purchased a $900 computer at a different store.  Why go back to a store who acts like they don’t want your business.’

Brand Management

Best Buy executives surely must have been aware of this issue — if not acutely aware — long before now (March 2012).  They couldn’t have missed it, not even through super expensive rose-colored glasses. 

Heck, we at MSM shared the news about their brand management problem in a post titled “Branding Blunder Bedevils Best Buy.” 

It was published one day after Christmas in 2011: According to a report by (with also providing a link to it), some online customers received emails from the brand just days before Christmas to let them know their orders had been canceled and would not be shipped as promised.  The problem was apparently due to a lack of inventory for some of the hotter items requested since the Black Monday shopping spree began.

Then we noted: Though less than 1% of online customers were affected — which meant 99+% had reason to believe they would be treated to a customer fulfillment experience – the severity of an already tarnished image came to light when reader comments at the end of the article grew to 61 in hardly any time at all; and not only were the majority of them unflattering, they mostly focused on the two themes of a poor customer service experience and unimpressive pricing. 

Such public zeal in so little time speaks volumes – doesn’t it?

The once mighty Best Buy apparently forgot that electronics consumers have high high high value expectations, and a low low low tolerance for any sort of betrayal.  They do and they can because the stiff industry competition allows it.

In forgetting that — and that alone – this new uphill battle for Best Buy may well be its last.

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  3. […] really hit home.  Best Buy CEO Brian Dunn announced the initiation of a massive restructuring (see A Big Brand Tumbles from Bluster to Fluster) for the Big Box retailer.  He insisted he was the best person to lead it, and he appeared poised […]

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