December 13, 2007

Where the Big Boxes Went Wrong

Any one who has been in the technology industry for a significant amount of time has seen several major changes. Changes in the way technology works, the speeds in which we can process data, and even the way we buy and sell technology. In the last 10 years we have seen the rise of the Big Box Technology Stores like CompUSA, Best Buy, and Circuit City, and now we are beginning to see the fall of them. But what is causing this fall? Why is it that stores that were like a geeks candy shop only a few year back are all of a sudden closing their doors?


Sales is a fine balance of knowledge and personality. Someone who nows tons about computers and technology, but isn't very introverted and not a "people person" (basically me) is not a good sales person. Someone who is a smooth talker, a charmer, and is very personable but knows nothing about technology will be able to sell a lot, but will also get tons of returns because they don't know how to fill peoples needs. So to find the right person is very hard. Then trying to find this person and get them to work for a low pay and a low commission it becomes almost impossible, so the companies begin to settle on what they can get. During the "take what you can get" search, they go for the sales people who really don't know much about technology since teaching a person the basics of a computer is much easier than teaching how to be a good sales person. Now give that average sales guy with little knowledge of technology and offer him 8 bucks and hour and tell him to meet outrageous goals and if they don't, they get fired. Oh and the only way to make more than that 8 bucks an hour is to sell a warranty that statistically is not good for the customer.

What you end up getting is an unhappy person pushing sales of products they either know little about or don't believe in. In addition to that, they are trying to sell to a group of people who for the most part want to spend as little money as possible and get the absolute best. Sales is a tough game, and unless you are willing to pay a premium for good sales people, your customers get sub par service.

Some stores luck out and get some really smart people on their sales floor, but they aren't there long. Most are there while in school or while looking for a better job. Someone who is good at sales and knows about technology will find a better paying job then a big box store if they look, I promise you that.

Internet Sales:

As the internet becomes more and more wide spread, many people will turn to it for purchasing a computer (and everything else). Internet stores have lower overhead and because of this can offer much lower cots. Combine this with giving the customers as absolutely pressure free sales experience, and it really is a good environment for buying if you know what you are looking for. It is hard for stores to compete with this, and really the only thing brick and mortar stores offer now is convenience and customer service. Most fail at the customer service aspect, and fail miserably. And unless you are in a pinch, convenience really doesn't matter.

The Tech Shops:

The tech shops in these stores have a problem from the time computers get checked in to the time they leave.

Problem 1. The people checking the computers are not techs. They, for the most part, do not know how to trouble shoot issues, and because of this don't know the right questions to ask in order to determine what the real problem is. Since they can't determine the real problem, many times the tech who ends up getting the computer looks for the wrong thing to fix, and when they can't find what is broken (because they are looking for the wrong thing) they say it's fixed and move on. The customer comes back unhappy and the process starts again.

Problem 2. The techs they hire are either new to the game (fresh out of school or just read a book and decided they want to be a tech) and have little experience. And while this wouldn't be a problem in many cases, it becomes one because they don't yet have the experience to translate what a customer thinks is the problem to what the problem actually is so they only try and fix what the customer wrote down is the problem.

In addition to being "green", they are put under enormous amounts of pressure to get as many computers fixed as fast as possible. In some cases they are forced to out source their own jobs (Best Buy, I'm looking at you). This causes huge drops in moral for people who would ordinarily like their jobs, and because the store wants to be profitable, they keep pay really low and force these techs to sell product if they want to make any money.

Who loses in these situations? the customers do. All the good employees find better jobs, and customers are left with those who either don't care about their jobs, ore really aren't good enough to do better. (with the exception of those who are in the job while looking for a better job or in school, but these people are all temporary)

In Hawaii, some of the stores are lucky. Because cost of living here is so high, many people (techs especially) have their normal day jobs, and then need a second night job to keep up with bills and have some spending money. Because of this they get really good techs who just take the lower paying job for the extra money. CompUSA had a handful of these guys, but because of the bad processes in place and all the red tape and sales bullshit they had to deal with were never allowed to get the tech shop up t their full potential. It was sad to watch hundreds of customers walk away unhappy because the store was unwilling to invest to analyzing the problems in the processes and fix them. under the right managements and with the right training, the CompUSA Tech Shop would have been great. I just hope the other Big Boxes take what happened to CompUSA as a warning and shape up.

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