"They're taking the right steps," says Co, "really looking at their inventory and aligning it with customer needs."
Circuit City simply hasn't done as good a job at meeting shoppers' expectations. In addition, the fact that the company's sales staff work on commission may erode shoppers' trust. Best Buy salespeople, who are paid salaries, have no vested interest in whether a shopper buys the most expensive TV or not.
Overall, says Co, electronics as a category has held up relatively well compared to apparel and home goods over the past year. But sales of big-ticket items have slowed, and Best Buy certainly won't be celebrating when it looks over its year-end financial statements.
But by focusing relentlessly on customers, Best Buy has weathered the economic crisis relatively well. If you can win shoppers' loyalty now, they'll be back when money isn't quite so tight, ready to spend.
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