What's Wrong at Best Buy?

Electronics retailer Best Buy is in hot water. Near as I can tell, they shouldn’t be. What’s gone wrong at the Minneapolis-based company seems to be a lack of coordination rather than the underhanded scheme that characterizes reporting about the crisis.

And it is a crisis, make no mistake. The company stands accused of maintaining a “secret” intranet that duplicates its consumer website but with higher prices. When customers come into the store asking for the price they saw on the web, employees reportedly show them the look-alike page on the intranet claiming the price isn’t as low as they thought, forcing them to pay more.

The story was originally broken on February 9 by Hartford Courant consumer watchdog reporter George Gombossy, who spoke with consumers who were taken in by the practice and a couple of employees who confirmed the existence of the site. Best Buy denied it, but the Connecticut Attorney General launched an investigation, after which Best Buy confirmed the site’s existence. In his one blog, a comment refers to Best Buy as “Those miserable, low life, scum sucking, bottom feeding, slime of the earth.” A Technorati search on the very specific query “Best Buy,” “intranet,” and “secret” produces 374 posts, 24 from blogs with a lot of authority. Google News produces CIO Insight has done:

The initial question raised by the reports were whether this was simply a matter of having Web site prices for Web purchases—requiring the delay of shipments for the consumer and the lack of brick-and-mortar costs for the retailer—being different from in-store prices. But the initial defenses offered by Best Buy—both to local media and to the Connecticut Attorney General’s Office—make no mention of this. If that were the case here, one would think it would be the first defense offered.

and…

The initial reports of the incident suggested the possibility that Best Buy was simply displaying a local version of the Web site, so that consumers could peruse their Web content but be unable to surf over to a competitor’s site or a price-comparison site or even to a publication such as Consumer Reports.

If that had been the case, then the pricing disconnects might have been nothing sinister, but merely a result of the fact that the external Web site is updated much more frequently than a static version in the stores.

But some of our own conversations with Best Buy employees March 3 cast doubt on that theory, with employees saying that they are only aware of the public version. (Gombossy’s reporting also found many Best Buy employees who were unaware of two sites.)

Whatever is happening at Best Buy, we can be certain that communications are in the toilet. Employees aren’t clear on what this intranet page if for or what they can and can’t do with it. It’s not beyond the realm of possibility to imagine some aggressive employees on the floor using the page for purposes beyond its original intent. The communications coming from the corporate office are uncoordinated to say the least, incompetent at worst. (There’s not even a statement or press release dealing with this on the corporate site.) It strikes me that there is probably an explanation for this, but that the company has thoroughly mishandled the communication, landing it in much hotter water than it needed to be.

I’ll definitely be watching this train wreck unfold.