Electronics retailer Best Buy prides itself on its low prices and customer service. Unfortunately, that care didn’t extend to its employees with the closure of 15 stores and 900 employee layoffs in Canada.
Like many consumers, I wasn’t surprised to see Best Buy and Future Shop store closures.
Analysts expect Best Buy to close another 200 to 250 of its 1,056 US stores in 2013.
You’d have to have been asleep for the past five years not to recognize the growing impact of “show rooming” by consumers. That is, browsing bricks and mortar stores, then buying online elsewhere for the best price. Online retailers like Amazon and other fierce competitors and electronics retail discounters have bitten deep into Best Buy’s market share and profits.
Best Buy simply failed to plan and position itself for these challenges. Now it’s playing catch-up in a tough retail environment.
Bad Best Buy Communications Equals Bad PR
I have no issue with managing your business costs. Even with layoffs and store closures. However, the devil is always in the details and how you communicate with employees, customers, the market and other important audiences.
I have a problem with their callous communications and how they handled their employees.
Employees arrived at stores on the day of the closures in Canada to be met by security guards. No advance notice was given.
Terse, unsigned announcements posted on locked store doors, like this Toronto location, read in part:
“We will be informing all of you today that the F5 store on Regent will be closing permanently effective today. We have been forced to make this difficult decision to close a story based on financial analysis, favorable store lease terms, and to respond to market demands.
This store closure means the end of employment for up to 58 employees with Best Buy Canada Ltd. ["Best Buy"], effective January 31, 2013 or February 1, 2013.
As you may imagine, this was a very difficult decision to make. You will be provided with specific details of what will be happening and how this store closure impacts you personally by a member of the District support team this morning. Throughout the day there will also be one-on-ones scheduled with every one of you to answer any questions you may have….”
Fine. Standard HR, lock-the-doors, lay-off-the-employees stuff. Schedule meetings to inform them of their benefits, job assistance and options, if any. Still, insensitively presented and poorly handled.
Employees deserve better.
News Release Announcing Best Buy Layoffs Sucked
A news release on its website buried the layoffs under the following breathless corporate strategy and bafflegab headline and subhead:
Best Buy Canada Announces Real Estate Optimization Plan in First Phase of Transformational Strategy – Best Buy Canada
Renew Blue Focus towards enhanced customer experience through modernized multi-channel approach
Oh sweet. Ignore the layoffs. We’re excited about our “real estate optimization plan in the first phase of our transformational strategy.” And a renewed “Blue Focus” for “enhanced customer experience through modernized multichannel approach”. WTH? With fewer employees and store locations? Whatever!
Of course, you’d expect the CEO to mention the hard work and dedication of employees with a quote. Nope.
Not even in its sole, on-record media comment by Mike Pratt, President of Best Buy Canada in an “exclusive” statement to The National Post:
“We believe strongly that the changes being introduced this year will enable us to optimize our retail footprint, expand into new markets and allow us to better serve our customers across the country.”
Hmmm. Optimized retail footprint and expansion together with layoffs and store closures somehow don’t translate to the better customer service.
Shades of Citigroup’s similar insensitive layoff announcement in December 2012.
No mention of the layoffs or thanks to the former and current Best Buy employees in the company blog either. Just relentless product promotion. Wonder how the remaining employees are feeling these days? Stay tuned for more in the US.
Gutless and Insensitive Communication
So, where were the expressions of thanks and concern by senior executives? No quotes. No signed messages at the stores. No sympathy, no empathy, no CEO facing photographers and TV cameras to express regret and say the actions needed to be taken for the company to survive.
Back on December 21, 2012, Best Buy posted its “Open Media Policy” for reporters to cover Christmas sales. Good enough for products but not when it comes to employees and layoffs.
I recognize transparency in social media would generate much negative comment and require a team to manage it successfully for several days. Ignoring it is not a best practices social media strategy.
Nice try. But I’m still wondering about employees who seem to gone missing in action, literally.
It’s also time to rewrite the corporate boilerplate which still claims:
“Best Buy is Canada’s fastest-growing specialty retailer and e-tailer of consumer electronics, personal computers and entertainment software…”
Better Best Buy Layoff Communications Next Time?
All in all, you’d expect better communication and implementation of a layoffs and closures strategy from a large company like Best Buy.
In my view, it looks like legal, HR and marketing managed the process. Poorly. They could have used some help from their PR department.
A few suggestions for the next round of store closures?
- Never mix marketing with layoffs.
- Don’t try to bury the bad news with a fuzzy, jargon-filled news release that sounds illogical and inappropriate for the situation.
- If you want to keep your best employees, treat the ones leaving with respect.
- Transparency rules. Especially in social media.
- Express regret. Speak directly to employees. Let your consumers and the public know you care.
- Have a CEO step up and show leadership too would you? One exclusive statement to a national newspaper doesn’t cut it.
I’m not optimistic things will be handled better in the future with Best Buy, Sears or other retailers who face tough business decisions. Clearly, they can all do a better job with their communications than they have so far.
This one qualifies as Best Buy – Worst Communication.
Author: Jeff Domansky
Visuals: Ubergizmo, Best Buy
More Reading on Best Buy Layoffs & Store Closures:
Amy Poehler Best Buy Super Bowl Ad 2013 Seeks to Improve Retailer [lalate news]
Best Buy, Sears, Barnes & Noble among retailers that will close the most stores in 2013 [Detroit Free Press]
Best Buy Stores Are Closing In Canada, Employees Were Not Informed [UberGizmo]
Best Buy to close 15 stores in Canada; lay off 900 workers [The Financial Post]
Customers and workers surprised as Best Buy shutters 15 stores, including Future Shop at Forum [CTV News]