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What’s Wrong at Best Buy?

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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 follow-up, Gombossy wrote:

Based on what (the Attorney General’s) office has learned…it appears the consumer has the burden of informing Best Buy sales people of the cheaper price listed on its Internet site, which (the AG) said “is troubling.”

What is more troubling to me, and to some Best Buy customers, is that even when one informs a salesperson of the Internet price, customers have been shown the intranet site, which looks identical to the Internet site, but does not always show the lowest price.

Blumenthal said that because of the fuzzy responses from Best Buy, he has yet to figure out the real motivation behind the intranet site and whether sales people are encouraged to use it to cheat customers.

The story is spreading like wildfire. On 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 nearly 200 results.

Thing is, I don’t buy it. I’ve done some work with Best Buy (although it’s been a few years), and I don’t believe for a second that they’re so stupid to think they could get away with a tactic so blatantly unethical and so easily exposed. What’s more, there’s nothing “secret” about the intranet, despite the fact that the adjective initially employed by Gombossy has been picked up by virtually every media outlete and blogger reporting on the story. Two years ago I had Best Buy representatives speaking at Ragan Communications’ Intranet Academy; they’ve also presented at other conferences.

The intranet is accessible by employees on the in-store terminals. From here, they can get to their benefits information and other typical intranet content, but also material that helps them serve customers (such as white papers on high-definition TV). The site is actually very impressive, a best-practice for providing intranet content to employees on the store floor that is relevant to their work.

So what is going on? We can only speculate, which is what 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.

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