Best Buy Forced to Cancel Some Online Orders…Just Days Before Christmas
- Posted on December 22, 2011 at 1:53pm by
Becket Adams
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“The list of reasons that Best Buy’s board should fire CEO Brian Dunn just got longer,” writes Douglas A. McIntyre of 24/7 Wall St. Why? “A number of orders made by customers from BestBuy.com will not be delivered by Christmas. And, Best Buy told some of the customers about the problem in only the last day or so.”
It’s true, Best Buy only now alerted some customers that it will not be able to fill their online orders, just days before Christmas, and that even some of the orders have been cancelled completely.
The largest U.S. specialty electronics retailer said late Wednesday that:
Due to overwhelming demand of hot product offerings on BestBuy.com during the November and December time period, we have encountered a situation that has affected redemption of some of our customers’ online orders. We are very sorry for the inconvenience this has caused and we have notified the affected customers.
The Minneapolis company declined Thursday to specify exactly how many orders are affected or which products are out of stock.
The shortages are a black eye for Best Buy, which has beefed up its online campaign to fight off intense competition from online retailers and discount stores. And the holiday season is crucial for retailers like Best Buy because it can make up to 40 percent of annual sales.
Don’t try and placate me with your faux Jennifer Garner, Best Buy.
Some glitches should not be a surprise with such a massive surge in online shopping this year, analysts said, but there is a risk of a backlash.
“It is a hiccup for the company,” said Morningstar analyst R.J. Hottovy. “They were kind of behind the curve building out their online channel. They’ve done a good job investing in it, but if you make a lot of rapid changes, inevitably there are going to be growing pains.”
Hopefully, for Best Buy’s sake, the canceled orders won‘t make a big difference for Best Buy’s holiday sales this year, but it may lead to more customers looking elsewhere in the future, he said.
“The risk is any consumers affected by canceled orders will be willing to explore other alternatives for online shopping in years to come,” Hottovy said.
Online sales are up 15 percent to $32 billion so far this holiday season, while total sales are up just 2.5 percent.
Even though online sales are a huge boon for retailer, the shift has already created some problems. Discount retailer Target Corp’s site crashed in September because of overwhelming demand for Missoni for Target, a limited designer line of clothing, home goods and accessories.
Best Buy benefited when its now-defunct rival Circuit City went out of business more than a year ago, but its suffering as Americans hold off on big ticket items and search for deals online and at discounters.
In order to compete, Best Buy has expanded its online offerings, cut back on square footage in the U.S. by closing stores and sought to expand internationally.
However, despite these efforts, in its most recent third quarter ending Nov. 26, Best Buy said its net income fell 29 percent as it cut prices in popular categories such as tablets and TVs to drive sales and traffic during the holiday season.
This has left some analysts wondering , “What the hell happened?”
“Best Buy has been one of the most poorly run large companies in America for a number of quarters,” writes McIntyre. “Wall St. was deeply disappointed recently when the retailer posted a 22 percent drop in earnings to $.42 for the quarter that ended on November 26. Best Buy said same-store sales in the next fiscal year will drop 3 percent.”
What do they think an appropriate remedy would be for Best Buy’s multiple financial problems? They believe that the majority of the mega-retailers woes stem from the company’s CEO.
“Dunn says he ‘loves’ Best Buy. If so, he should do his investors and customers a favor and leave.”
The Associated Press contributed to this report.
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Comments (55)
JediKnight
Posted on December 22, 2011 at 11:53pmIf I had to guess, since the story doesn’t have very many details, I’d say that part of this has to do with the flooding in Thailand that caused a shortage of hard drives. So BB probably ended up with a shortage of computers, laptops, game consoles, etc. Basically, anything that has a hard drive (or even needs parts that are used in making hard drives), ended up in short supply. The flooding is only just now starting to get cleaned up and drive prices are finally starting to stabilize.
Report Post »FaithfulFriend
Posted on December 23, 2011 at 1:29amYou are exactly right. The Thailand shortages are extreme and affecting all supply chains.
Report Post »TomFerrari
Posted on December 23, 2011 at 6:29amI’m in complete agreement.
What I would do, as CEO, is, put pressure on my suppliers to pay for the shipping costs of all these unfulfilled orders, and/or to pay for deep discounts on the products that failed to arrive on time, or to be drop-shipped on time.
Furthermore, before next year, I would ASSURE that I had supply-chain management systems in place that would provide real-time product availability, linked to the merchant website, such that items would accurately reflect shipping schedules, product availability, etc.
Once that is in place, and thoroughly tested, I would GUARANTEE ON-TIME DELIVERY – OR – THE PRODUCT WOULD BE FREE ! (ala Domino’s 30-minutes-or-less, ca 1970s, before litigious lawyers and customers sued and blamed the guarantee for car accidents)
Besides, I’d hate to see Best Buy come to any harm –
THEY ARE A CONSERVATIVELY RUN COMPANY ! ! !
RESTORING LOVE, July 26 27 28, Dallas, TX
Report Post »http://www.meetup.com/MercuryOneHQ
Do you GBTV?
Pendragon
Posted on December 23, 2011 at 5:32pmIt has nothing to do with a flood…I worked for them for 20 years In Sales Development…This is a calculated flub….When we ran ads for items on Sunday they only got 3-10 items total and a display and they were required to keep the display until the close of biz on Saturday then sell it off if it was a close out.. Here is the plan to avoid Bait and Switch…Say they have 5 items sell through them but the Ad runs the Week you offer them a Rain Check first and when you say no they ask lots of questions..to redirect you to an Item with Margin…That is the in store way..Way Around demand a Substitute on the spot…The on line offer is even better for them They are giving a Gift Card away that you can spend no where else and hence takes away market share and increases MARGIN. How you might ask?? You take the Gift Card which is like cash in your hand and buy regular price items with it 1 and 2 when you have cash in hand you, being the general public, spend more…If I have 20 dollars in hand Free now in my mind, spending an extra 10 is not a big deal..It is using the psychology of human nature..I trained it. So guess what that 1000 dollar I pad item now becomes 1300 at full cost with margin..You cannot spend the gift card at Amazon and it is a full margin Item so who got market share and profited off it?? Those Retailers who cut the prices to the bare bone or Best Buy which said opps sorry here is a gift card for just our store and our regular price items???
Report Post »ObserverOnTheHill
Posted on December 22, 2011 at 11:23pmBest Buy is now Goodbye
Report Post »SHIPMONEY100TRILLION
Posted on December 22, 2011 at 10:54pmBest Buy is going out of business soon.
Report Post »Scaz
Posted on December 23, 2011 at 1:34amI got one of their love letters tonight. They canceled my order and they are giving me an E-gift card for $8. I hope they do go out of business. They have a monopoly over electronics in my are and they certainly act like it.
Report Post »SHIPMONEY100TRILLION
Posted on December 22, 2011 at 10:53pmThe wil be out of business soon. Mark my words.
Report Post »SHIPMONEY100TRILLION
Posted on December 22, 2011 at 10:53pmby, by, Best Buy.
Report Post »shagstar
Posted on December 22, 2011 at 11:35pmanother lib business going down the drain! and you lib‘s thought that us capitolists didin’t know how too fight fire with fire!!! we are just getting started baby
Report Post »ODDOREVEN
Posted on December 22, 2011 at 9:53pmBest Buy’s business practices are less than desirable to begin with. After having dealings with them in the past they did not treat me with honesty and integrity in honoring their additional warranty coverage. I can recount numerous anecdotes from people I know with similar experiences. This news story ran sometime ago on my local station which only confirms concretely that they are less than honest. http://www.searchmarketinggurus.com/search_marketing_gurus/2007/03/about_a_month_a.html
Report Post »flatbroke
Posted on December 22, 2011 at 9:16pmI dont like shopping at beast buy, because they are very good at bait and switch, and because they will have a store packed with customers, and workers standing around doing NOTHING, and by the time you make your way to check out, only 2 registers will be open, and you are forced to stand in a line 25 deep. I have walked out of BB on 2 occasions due to long lines, and not during the holidays either. With as much money as BB makes, you would think they would hire more checkers.
Report Post »The_Almighty_Creestof
Posted on December 22, 2011 at 8:58pmYet…I received an e-mail from BB today announcing their massive “midnight only” sale tonight…which is all on-line.
Report Post »Worldsapart
Posted on December 22, 2011 at 7:42pmSo once BB and all the other brick and mortar stores die where are you all going to do your “window shopping”? Or are you just going to trust the “user reviews” of whatever site you’re on? What happens when Amazon starts writing their own reviews? This Race to Zero is great for the consumer while it’s happening. Once it gets to Zero, and there are no suppliers left, what do we as consumers end up with for choice? Vizios and $250 Samsung theaters in boxes? Hooray for that!
Report Post »JediKnight
Posted on December 22, 2011 at 11:50pmI can do “window shopping” in a web browser with multiple tabs open. If you can’t tell real reviews from fake ones, you need to look closer at the reviews. Plus, if the item has hundreds or thousands of reviews, there’s a good bet that most of them are real. I doubt that Amazon is going to pay people to submit hundreds of fake reviews. A few, maybe. But even those ones are pretty easy to spot.
You do also realize that not everything you buy at Amazon is sold directly by Amazon, right? I’ve had plenty of purchases that were merely “fulfilled” by Amazon, meaning that a small business was getting the order from Amazon and then shipping it directly to me. I’ve ordered from places all over the US like that. I have found plenty of items that even with shipping end up costing far less than buying local.
While I don’t want to see BB go out of business, I certainly will not shop there. I prefer NewEgg and Amazon.
Report Post »endgamer
Posted on December 22, 2011 at 7:05pmOh well.. In business ya snooze ya lose.. Best Buy is way overpriced anyway.
Report Post »jefferson-not-jackson
Posted on December 22, 2011 at 8:46pmGood point. :P
Report Post »KingCanon
Posted on December 22, 2011 at 6:42pmI say, send them to the Isle of Misfit Businesses where they can only dream about Christmas sales. Then, to the point of frustration where they haven’t any dreams left. :O
Report Post »LeadNotFollow
Posted on December 22, 2011 at 6:40pmI’ve never liked Best Buy.
Report Post »ErinLindsey
Posted on December 22, 2011 at 6:36pmI’m glad that I did most of my shopping thru Amazon.com this year. I had to. Got sick with a serious physical problem that is keeping me from walking around. I did manage to do a bunch of shopping at the local Target and Walmart stores before I got sick.
Really glad that I got the Amazon Prime membership this year. Saved my Xmas! I‘m only waiting on one gift and that’s because the seller sent it by Unusually Slow Postal Service (USPS) and it’s sitting in the city across the river from me. It’ll be here tomorrow. (unless something happens to the bridge between Omaha and Council Bluffs)
I quit shopping at Best Buy when one of their Geek Squad people wanted to hang my tv on the wall with just alligator bolts. He wasnt going to screw it into the wall studs. (ruined my wall I’d just had built) and when I told him that I wanted someone else, he stole half the bracket system that I’d bought for the tv. I had someone else finish the job. That tv’s not going anywhere.
Report Post »Worldsapart
Posted on December 22, 2011 at 7:25pmErin, that’s why you should use a local AV guy in the first place. You almost always get what you pay for. That goes for Amazon too. ;)
Report Post »ErinLindsey
Posted on December 22, 2011 at 8:45pmYeah, I’ve gotten a few things off of Amazon that werent the greatest, but for the most part I love Amazon. They have such a consistently good customer service that I sometimes dont mind paying a few extra dollars for an item there.
Best Buy’s problem is they lack decent customer service. The stuff they sell, when they have it in stock is usually great. It‘s the employee that grabs the wrong items from the locked cases and doesnt double check to make sure they’re getting the right thing, then giving me a lot of crud about exchanging it because I trusted that the employee wasnt a moron and got me the right thing when they actually gave me a completely wrong item and I didnt notice until after I got home. (happened more than once. I double check now) That Geek Squad kid damaged my tv screen with his fingers by pressing his thumbs into the screen. You can see the imprints of his fingers all over the corners of the tv. (yeah, BB wouldnt fix that either)
My dad is getting a new tv soon. I’m having a local real electrician/AV guy do the mounting onto the wall for that. Not the snotty teenagers that BB seems to always hire.
Report Post »408 CheyTac
Posted on December 22, 2011 at 6:26pmI would bet you anything that the people that didn’t buy best buys scam-warranty got their orders hosed, and everyone that bought the extended warranty got preferential treatment.
Best buy, the land of clueless sales people, and scam extended warranties. Anyone with any sense would avoid that place.
Report Post »swoods08
Posted on December 22, 2011 at 6:25pmLast week I went into Best Buy to buy a PS3 game (new release) and was told it wasnt in stock. The game launched that day and they didnt have a single copy in the store to sell me. Told me I had to “pre order” the game before launch day or use their convenient online store. Listen Best Buy, I go into your stores to physically buy what I want THAT DAY! No wonder they are going belly up.
Report Post »Worldsapart
Posted on December 22, 2011 at 7:28pmSwood, I wouldn’t necessarily blame BB for that. The whole gaming world is getting trashed thanks to Pre-order and DLC. It was probably the game studios fault. I’m only a little pissed at Activision, EA, and Firaxis. What a terrible year for gaming in what should have been one of the best years ever. I guess that‘s what I get for being a 30 year old in a 14 year old’s world.
Report Post »JediKnight
Posted on December 22, 2011 at 11:42pmI wouldn’t blame any retailer for that. Typically, when a new game finally gets a release date, the retailers start taking pre-orders. The pre-orders are filled first. For any new hot game, they will not have it in stock on day one. They get thousands for pre-orders. If you come in on day one expecting to buy it without pre-ordering, expect to leave empty handed.
I for one prefer pre-ordering a game online, especially when they have a “pre-load”. That way, as soon as the game is “released” (unlocked), I can play. No hassle with going to the store and dealing with a cashier. Even when they don’t have a pre-load, I‘d much rather download the game as soon as it’s available and install it. All the consoles have online stores so you can have instant access to any game without even having to go to a store anymore. The store might have it for a little less during a sale, but places like Steam have really good sales throughout the year too.
Report Post »beverlee
Posted on December 22, 2011 at 6:19pmI boycotted Best Buy this year. I found their Christmas commercials with Santa offensive. I bought a laptop from Staples. Great deal and friendly, helpful employees.
Report Post »408 CheyTac
Posted on December 22, 2011 at 6:27pmWeren’t those things horrible?
Insulting to the season, and just what this world needs, a bunch of jerks with a grudge against a seasonal icon. horrible.
Report Post »oldchevyguy
Posted on December 22, 2011 at 6:39pmAbsolutely right! Their Christmas commercials were bad this year and in years past.I don’t shop there anymore
Report Post »cheryllovestoread
Posted on December 22, 2011 at 6:04pmDitto on Best Buy’s lousy prices and customer service. Ditto on Amazon’s generally good prices and customer service. But, a word to the wise online shopper…Amazon isn’t always the best in price. I went directly to Mattel’s website to check on some toy/game prices and I saved about 30% over Amazon on the two items I had planned to purchase. And they had free shipping. And I had them two days later. I was pleasantly surprised!
Report Post »number9
Posted on December 22, 2011 at 6:02pmThey’re having a MIDNIGHT SALE TONIGHT. I wish you luck. I’m still waiting for a reply from their so called customer service department as of NOVEMEBER 15th and still nothing. AND let me tell ya what happened online with their Black Friday Sale. #epicfail Customer service? WHAT CUSTOMER SERVICE? ERRR.
Report Post »beaubird
Posted on December 22, 2011 at 5:53pmnot as bad as wal mart they gave out of xmas candy 7 days before xmaas !!!!!!!!!! What is up with that!!!!!!!!! they are busy puttin out valentines, that is sick !!!!!!!!!!!! get ovr 1 holiday befor going into another!!!!! Greedy!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Report Post »kaydeebeau
Posted on December 22, 2011 at 6:42pmhas nothing to do with greed – rather inventory / distribution / merchandising systems. I am assuming you are speaking metaphorically rather than literally regarding the candy thing
Report Post »freenj
Posted on December 22, 2011 at 5:51pmWhen Circuit City was still in business I did my electronic shopping there. Not much of a fan of Best Buy. Really like Amazon, especially with their Prime Deal and free shipping.
Report Post »betterthantv
Posted on December 22, 2011 at 4:43pmI gave up on Best Buy a couple years ago. Once in a while I’ll go in and “look” then come home and purchase online. The inventory is terrible, prices are ridiculous, and management is pathetic. I don’t even know how they keep the doors open. I tried to buy just an average DVD player last year and was told they had NONE IN STOCK! How is that even possible? And who actually spends $25 for a DVD anymore?
It’s just simply to easy to shop online. I would expect to see a number of the big box stores to close in the years to come. I did 100% of my Christmas shopping online this year. You simply cannot beat Amazon! I ordered a Kindle Fire on Monday at 2:00, it was delivered Wednesday at 4:00. How can anybody beat that?
Report Post »DrFrost
Posted on December 22, 2011 at 5:10pmI‘ve been a long time customer of Best Buy but they aren’t keeping up with the times. Some of their pricing is great…. and some is simply too high. When Amazon is 30% cheaper on an item… I’m buying it from Amazon.
This latest event has a lot of people upset though. I have a coworker who says she is done with this retailer. At the very least they need to come out and explain what they are doing to ensure this never happens again.
Report Post »Dinkiecb
Posted on December 22, 2011 at 4:27pmOne of Obama‘s loyal followers didn’t order enough stuff
Report Post »Dinkiecb
Posted on December 22, 2011 at 4:26pmIt‘s Obama’s fault!
Report Post »Dinkiecb
Posted on December 22, 2011 at 4:26pmNo wait…it‘s Bush’s fault!
Report Post »408 CheyTac
Posted on December 22, 2011 at 6:30pmgeorge bush’s fault!
oops, someone beat me to it.
Report Post »nocalifornia
Posted on December 22, 2011 at 4:11pmNext time go Amazon, at least they have a customer service department that takes care of customers.
Report Post »Cant steal my joy
Posted on December 22, 2011 at 4:27pmAmazon is not the answer. Amazon canceled all of the Asus tablet pre-orders before Best Buy even started canceling some of theirs. I know because we order one through Best Buy and it is on a UPS truck now and is due to arrive just after Christmas. My son has been eagerly awaiting it’s arrival. Don’t get me wrong I do love Amazon.
Report Post »COFemale
Posted on December 22, 2011 at 4:06pmI could understand if the orders were just placed this week or last week, but if some of these orders were from November or even the first week of December, then that is a problem. If you know you can‘t guarantee something for heavens sake don’t advertise that you can. At least cover yourselves and state that orders that exceed supply, inclement weather, and/or orders placed two weeks prior to 24 December will not be guaranteed for delivery by 25th of December and/or may be cancelled. Then at least they were warned.
Report Post »408 CheyTac
Posted on December 22, 2011 at 6:35pmI don’t buy that logic at all. If they can’t keep a site going, they need to close it. After all, when napa online can tell me if I can find an odd-ball-$5.00-part in my local store ten minutes later, and best buy can’t tell me is they have a 1000$ tv, then I would say bb needs to can the IT dept, and go try to hire someone that isn’t an idiot.
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