Tough times continue for Best Buy. The latest news is that the company’s cash-flow expectations were lowered because payments on inventory had to be made earlier than expected.
This was not Best Buy’s fault. It received inventory sooner than expected and had to pay for it sooner too. But this perpetrates the negativity surrounding the Best Buy brand.
The overarching problem with Best Buy is that nothing has been done to stabilize its brand. On top of that, the company refuses to adapt to the changing competitive landscape – which brought down Circuit City – and is fending off takeover bids from founder Richard Shulze.
The Best Buy brand extends only as far as one of its blue-shirted employees can take it. Online retailers have been devouring Best Buy’s market share. That cannot be attributed only to the overall woes of brick-and-mortar stores. Apple outlets, by contrast, are packed with customers.
The responsibility of any company with brick and mortar is to create enough of a brand that it becomes a destination. Best Buy should reexamine the experience its brand creates and figure out why it is no longer meaningful to its customers.
Why does the Best Buy customer use Best Buy? Why do others reject it? Who does the Best Buy customer believe they are? How does Best Buy reflect that? Is the Best Buy customer seeing Best Buy as easily interchangeable with other stores like Target or Walmart and what is driving those feelings?
These are important questions. The fact that little has changed at troubled Best Buy indicates that the critical questions are neither being asked nor answered.
Best Buy’s future is gloomy, unless it examines its brand closely.