Best Buy announced that it will be closing 50 of its stores nationwide, two of them in Massachusetts. Best Buy has weathered many storms and consumer trends. They’ve outlasted Circuit City, Comp USA, and a dozen other electronic stores. Over the years, they’ve invested more heavily in internet transaction. However, this strategy has only taken them so far. Amazon continues to battered them and may threaten to eclipse them forever.

Best Buy projects that it will save 250 million dollars in the next fiscal year. The online retailer Amazon continues its scorched earth policy that has lead to the demise of all but the most hearty of contenders. When Amazon began selling books, it sold them at a loss in order to gain more repeat customers. Then Amazon switched models to accommodate e-books in which it let customers set their own price. Combine the ability to shift market prices with low overhead and Amazon turns itself into a giant amongst big box stores.

Brick and mortar stores face stiff challenges from their online counterparts. One thing to be noted is that 82% of consumers will not return to a store or brand if they experience bad customer service. Seven-three percent of those consumers cite rude staff has their primary complaint. That’s outrageous. Face-to-face customer service is the major advantage of the physical store front. Just from personal experience, Best Buy has been very hit and miss with its customer service. They should invest more in a better customer service experience. In a 2010 Customer Experience Impact Report, Rightnow technologies reported that customers will pay up to 25% more if it ensures a good customer service experience. That should certainly help with Best Buy’s shortfall. Everyone more the mail room clerks to the IT Consultants should listen up.