Just in time for the Thanksgiving holiday shopping rush I come across evidence that at least one high-profile US-based entry into China’s cut-throat, price-sensitive retail market isn’t working out exactly as planned. I’m talking about Best Buy, North America’s largest electronics retailer. Three years ago they entered the Chinese market with plans to counter China’s aggressive sales culture with a low-key, service-oriented sales method (I wrote about these plans in early 2008 for MinnPost). They might have succeeded – but I’ll leave that question for another time. Tonight I’d like to talk about where they’ve clearly failed: security.
Case in point. This evening, around 6:00 PM I wandered into the third floor mobile phone section at the chain’s store in Shanghai’s Xujiahui neighborhood. As I came off the escalator, and approached a display of smart phones, a slight man in his late twenties sidled up beside me and pulled out a used iPhone 3G. He said ‘hello’ in English and made a quick price offer. After telling him where to put his (presumably) stolen iPhone, I walked to another kiosk and watched him. Nearby was another man, older, who watched him and the staff in the area – he looked like a partner to me, possibly muscle of some kind. A kind of shady, cigarette stained fellow. The staff, meanwhile, watched the man with the used iPhone and DID NOTHING, either unperturbed by his presence, or in no reasonable position to do a thing about him (I’m inclined to the latter – which raises other questions). A moment later, Mr iPhone approached a tallish Chinese man in his mid-twenties. The two appeared to discuss a price at length, and then the tall man wandered off to look at new phones. All through this, the store staff was watching and DOING NOTHING.
So what to conclude? Alas, I only had a few minutes to observe this situation AND look for a new phone (chose not to buy due to a lack of time and an aversion to retailers with used phone operations on the same premises). But I watched long enough to conclude that most of the staff knew what was going on – it would’ve been awfully hard to miss – and didn’t feel like they were in a position to do anything about it. On a deeper level, I conclude that Best Buy’s much celebrated retailing and staff culture has suffered a complete and total collapse at its flagship Shanghai store. If security has failed so completely on the mobile phone floor, you’re likely taking losses elsewhere – and alienating customers (like me). I’d like to make a few more conclusions, but I’m not interested in getting sued so … Conclusion: Best Buy Shanghai has serious human resources problems, ie Best Buy Shanghai has serious problems.
[FYI to Best Buy Security and Best Buy's legal: on the security tapes you'll see me come off the escalator and take a right into the mobile phone section just in front of 6:00 PM. I'm wearing a Minnesota Twins baseball cap. The phone hawker approaches me within a minute. The aforementioned interaction with the much taller Chinese customer happens within five minutes of me telling off the hawker. You'll note the hawker's partner standing on the other side of the escalator. You'll also note store staff staring at both of these guys, and doing nothing.]