Best Buy gains customers

By May Wong
Wire Service Correspondent

PALO ALTO, Calif. (AP) – Ralph Devoe’s hunt for a new computer monitor didn’t include a stop at Circuit City, even though one of its stores was only a few doors down from the Best Buy where he went shopping this week.
“ They often don’t have what I want,” the retired physicist said. “And Best Buy just seems a little better. The salespeople actually know what they’re doing.”
Though Best Buy also has its detractors, Devoe’s dislike of Circuit City illustrates a challenge facing the electronics retailer as it competes in the shadow of its larger and younger rival. Its sales staff at stores is thinner and product selections are often more limited and less organized.
The companies’ financial results are telling. Best Buy, the nation’s No. 1 electronics retailer, this week posted an 18 percent rise in fourth-quarter profits despite a bruising environment of flat-panel TV price drops. No. 2 Circuit City, on the other hand, swung to a loss in the quarter and is shaving its total work force by 8 percent, laying off 3,400 of its most experienced (and expensive) clerks.
Analysts say Best Buy is executing well on all fronts. Its rapid expansion and earlier investments in its Geek Squad tech support service and high-end Magnolia home theater segment – all part of its “customer centricity” strategy – are paying off.
“ Circuit City has spent a lot of time catching up, and right now, they’re not catching up fast enough,” said Stephen Baker, analyst at market researcher NPD Group.
Yet the tale of the dueling electronics chains goes beyond numbers.
It also boils down to consumers, where they like to shop and where they spend their money.
For sure, bargains and good rebates could be found at the stores of either chain – an important draw for the price-conscious American public.
But other times, it’s as basic as how a store feels, how the products and aisles are laid out, how the workers there treat you.
A friendly greeter is stationed just inside Best Buy’s front door.
“ How’s it going? Welcome to Best Buy,” he repeats.
Within a minute of browsing in a section, a Best Buy associate swings by to offer assistance. The staffer casually dispenses product info or comparisons, and just as quickly lays back if you decline the help.
At the Circuit City, it took some effort to find a store employee to ask where to find the cables – and the red-shirted employee who was tracked down misdirected this shopper to cables for TVs.
At Best Buy, the greeter at the door quickly responded with a more specific question, “What kind of component video?” By asking, he learned the cable’s purpose was for a game console and pointed to the video game section..
That kind of attention to detail goes a long way in a shopper’s experience.
“ I like how it’s easier to find things (at Best Buy), and it’s cool when you walk in and they greet you,” Dustin Durham said outside the store, clutching a new projector.
In some cases, it just comes down to location. With more than 800 Best Buy stores in the U.S., compared with Circuit City’s 650, Richfield, Minn.-based Best Buy Co. Inc. has an upper hand at the moment.
“ I don’t have anything against Circuit City, but this one is just closer to me,” Daisy Zhao said, as she stepped out of a Best Buy with a new digital camcorder.