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This from Bloomberg:

I shopped at CompUSA before Best Buy came to the Midwest, and before Wal-Mart carried much in the way of computers. In fact, there weren`t any stores that really focused on computers and software, so CompUSA sort of had a lock on the market.

I always felt I`d gotten good value for what I paid, and found many of the products I wanted on the shelves. Quality, in relation to Best Buy, convinced me I would shop at CompUSA rather than the deep discount stores. Customer service was pretty okay, and they had repair techs right there.

So how come the company is going out of business? What exactly does that mean: "competition from...?"

I also stopped shopping at CompUSA several years ago, but not at all because of the store or the prices. Some of it was convenience, having to drive a ways, but the much larger part is that I have a quality machine and it doesn`t really need to be changed much.

When I`ve wanted various new toys, accessories, or peripherals, they mostly have been available online, or through places like eBay and other used item locations. Wouldn`t that mean that competition from online shopping locations matters?

What about Tiger Direct, Global Computers, and Dell? And what does this mean for the brick-and-mortar computer store?

I`ll propose that the closing of CompUSA is representative of the overall concept of competition in retail. Did the company fail to compete? Yes, I get that Bloomberg is *saying* that`s the cause of the closure, but does your critical analysis agree with Bloomberg?

What do you think competition means in today`s new world of online outlets and secondhand merchandise sources?

I think online shopping is taking over. 5 years ago, best buy or circuit city didn`t do any website sales...now, it`s nearly 30%+ of their sales. I think 1st generation and compulsive shoppers who want the item now now now, will now and always and forever shop at stores direct. The more patient and value-oriented will always shop online or at second hand discount stores, because they would rather spend the time to find a better deal.

In my opinion, I think competition will always be there, but will almost be benificial, since different types of customers are targeted by different types of businesses. All they can do is utilize everythink their competition has and just keep building more stores....in the end, after all, it`s all about patience and convenience.




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Maybe I`m just lucky but my local BestBuy beats the snot out of our local CompUSA (and our Circuit City too) store in every way (customer service, knowledgeable salespeople, etc.)

Well, I guess the problem I`m having with the story is that I can`t really see why competition is listed as the reason for the closing. CompUSA wasn`t all that different from Best Buy, and certainly has more variety than Wal-Mart. If I shopped there, I didn`t have a bad exeperience, and usually found whatever it was I wanted to buy.

But if it isn`t competition, then why else would the chain go out of business?

Craig,

I think the reason for CompUSA closing is because of competition from companies like DELL, WalMart and Best Buy. I think at one point in time, CompUSA was on top of their game. But let`s be honest, CompUSA was never a place for the average joe-schmoe computer user. For programmers, computer savvy folk and the like, CompUSA was great -- they carried all the hardware and software needed to do whatever they needed.

But the average joe, who only uses computers for word processing and surfing the web, needs only the basic e-machine and nothing else. I think competitors of CompUSA did a great job of enticing "average joe" customers to buy their computers. After all, the average joe are a lot more plentiful and they do spend more money.

In that sense, CompUSA became not so friendly for average computer users, hence they flocked to Best Buy and Wal Mart or Dell to buy simple machines with no upgrades needed.

I think it`s not so much competition that killed CompUSA, but their inability to "dumb down" to the needs of the common consumer.



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My site: www.entreplanet.com

The community for entrepreneurs!

Ah...now that`s a good point! I guess I hadn`t really thought of it as from the average buyer`s perspective, and indeed, computers have come down to where they`re considered an ordinary tool now. I think you`re right, that`s what did it. Great post!

I`m actually going to suggest something of the opposite.  I don`t think it was their "inability to dumb down", rather I think it was that they did dumb down.  CompUSA was the "computer superstore", right?  Computers were their thing.  But they began to compete with the aforementioned stores.  They dumbed themselves down with TVs, game consoles, cameras, even a small selection of DVDs.  They tried to be Best Buy.

Our local CompUSA (of which I actually frequent for supplies, though for not much longer) kept their computers in the BACK of the store.  When I walked in, big flatscreen TVs were displayed up front.  Sure we could get into the theories of retail layout but the point is, what kind of store image are they projecting?  Were they computers?  Were they regular electronics?

I think they lost ground because they became just another commodity.  They didn`t set themselves apart from the rest.  Perhaps if they remembered that they were a COMPUTER store first and not an electronics store, they would have found (or kept) a unique segment of the computer buying market.  I think they did indeed considered the average buyer`s perspective, maybe TOO MUCH.



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Steve Lowtwa

Fry`s is another huge technology superstore from the West coast, and they moved into the area. They cover the hardcore technology, but also anything from refrigerators to telescopes. I can see the reasoning that CompUSA should have stayed specialized for brand differentiation, but I wonder if they could have competed (compette?...compied?) with something like Fry`s.

Another aspect of this whole topic that caught my eye is how stores maneuver in the fast-changing consumer products environment. If CompUSA had stayed with the "geek" type services, would they still have had to add in the other consumer products to keep up with Fry`s?

Consider Penney`s and Sears, who used to sell home electronics and things like kitchen appliances. They stopped carrying the products, so Best Buy filled in the vacuum.

I`m still liking Entreplanet`s thoughts about the average crowd--meeting the middle needs of the masses. After all, computer technicians would also likely buy online or through small custom shops, right?

Meeting the middle needs of the masses.  I agree.  My point isn`t that they could have been the high-tech computer geek store.  No, they were a big box brand for sure with their aim on the masses.  However, they did not differentiate themselves from the countless other retailers in the same market.

My point was they could have made themselves the top choice for buying a computer for the average joe.  Instead, they tried to play Best Buy`s game and spread their brand thin on all sorts of other electronics.  And I`m also not saying that they couldn`t have carried other electronics, especially ones that mesh well with computers like digital cameras.

But instead, they lost the `computer` aspect of their competitive edge and went straight for commoditization.  CompUSA became just another place to get well-priced electronics and not THE place to go for computer needs.

You don`t think of Best Buy as a computer store.  Nor Walmart.  Nor even Fry`s (though maybe a little more computer-y).  CompUSA did have that going for them.  But they didn`t use it to their advantage.  They dumbed down that advantage and lost at someone else`s game.



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Steve Lowtwa

Good clarification, Steve. And you`re right, CompUSA did go the diversification route. Actually, other than online, there aren`t many stores that sell only to computer people. Maybe the local repair stores, if they can stay in business. I guess computers have also fallen to the "commodity" item level, where if it breaks, just buy a new one. Yeesh!