Well, except for the fact that they changed their entire strategy and format. They had moved to a zero lock up program years ago, every laptop computer box, camera, etc. was customer accessible. They put all the cages back, lockups back, and put backroom storage back. Now they're remodeling stores and expanding the backrooms even further so they take up a quarter to a third of the building and adding pickup counters as they recreate the late, famous electronics industry leader in shrink, Circuit City who secured everything and fired managers for getting over 0.40% shrink (I am dead serious). I should mention that the backroom model is actually a labor savings too, less planograms to set, less labor to stock sales floors. Just a handful of people unload the trucks and put all the boxes into their pallet racking where they're not touched again until they're sold. No need for daily restocking of the sales floor and recovery processes and such. Usually just one person in the warehouse, and if they need help loading a big box they page an available floor worker to help.
So maybe Best Buy had the foresight to predict the shrink problems today and secure themselves against it? Because there is absolutely no resemblance between what Best Buy looked like in the early and mid 2010s versus today from a security perspective. They've locked down the stores like a bank vault and just keep adding security.
And they've already closed 15% of the chain, nearly all of the closures being in higher shrink areas.
The reason they added workers is because they slashed so many last year and this year that they were losing sales to Amazon and Costco because they were so bare bones that they had a wait for hours to just get a cashier to ring up a TV that's in the back room. So they forced the customer to buy online which usually translated to no sales of the high profit cables, warranties, mounts, installation services, etc. that are the only thing that keeps the store open since the margins on the electronics themselves are less than 5% while the add ons are 90% profit.
They didn't add staff to prevent shrink. They are also finishing the process of fully outsourcing their entire delivery department as well as Geek Squad service and installation businesses to 3rd parties. So basically they've slashed staffing more than ever this year.
They are so reckless and incompetent at the C-suite that they have executed the same layoff programs of all their best salespeople three times in the last decade. Circuit City did it once and they are still in business school textbooks over it. Best Buy keeps repeating the same staffing and business model mistakes, expecting a different result every time.
They need to offer Hubert Joly a "blank check" to return and save the company, again. Unlike Howard Schultz and Starbucks, Joly's services are so desperately needed to right the ship that I could see the liquidation of this $50 billion a year company occurring in the next 5 to 10 years. They have an overreactive C-suite that makes massive scale changes to every aspect of the business model every few months or years in an effort to portray their worth to Wall Street who unfortunately doesn't have any other national competitor to compare them to. Massive, expensive and costly changes do not work in a low margin business dependent on offsetting loss leaders with high profit add-ons.
Really misleading article.
