I’m not a huge fan of schlepping around needlessly when I can do most of my shopping from the comfort of my chair, but Apple fans don’t seem to have much trouble going to their local Apple store when the urge strikes. According to their recent earnings call, 110 million people went to an Apple store in Q1, which breaks down to roughly 22,000 customers per Apple store per week.

It looks as though those stores have been pretty busy to boot, as $6.1 billion of Apple’s insane quarterly revenue came courtesy of their retail stores. In case you were interested, that breaks down to just over $17 million coming each of the company’s 358 retail stores. Apple CFO Peter Oppenheimer also noted that in-store iPhone sales have doubled, and sales of the iPad were up “significantly.”

Not too shabby, especially moves from players like Amazon have people foreseeing the demise of brick-and-mortar retail as we know it. Apple pegged the continued success of their retail operations on endeavors like in-store pickup and their relatively new EasyPay system, which allows customers to effectively ring themselves out for products without having to flag down employees.

Of course, Apple didn’t hit their record-breaking sales figures by selling at Apple stores alone — CEO Tim Cook notes that Apple has around “130,000 points of sale in the world” for the iPhone and that they’re continually adding new points of distribution. Think big box electronics retailers, carrier stores, and the like. With the company’s popularity in China, CEO Tim Cook also had little to mention on expansion on that front, but noted that Apple would continue to “look at how to grow” that particular market.

A new startup called Euclid Elements emerged from stealth mode today to debut its customer-tracking solution for brick-and-mortar merchants it’s calling “Google Analytics for the physical world.” The name is an apt description for the new solution, which employs sensors and wireless technology to track customer behavior, as its founding team actually includes former Google Analytics engineers.

Euclid also announced its $5.8 million in Series A funding from New Enterprise Associates (NEA), Harrison Metal, Triple Point Capital and other angel investors.

Euclid Co-founder Scott Crosby previously co-founded Urchin, which was acquired by Google in 2005 and became Google Analytics. His brother, Brett Crosby, also an Urchin Co-founder, now sits on Euclid’s board. The company’s CEO, Will Smith, has an interesting background too, as the grandson of John Smith, an early shopping center developer and co-founder of the International Council of Shopping Centers (ICSC). You can kind of say that retail runs in his blood.

The rest of the 15-person team, primarily engineers (save for one new hire), has backgrounds that include experience at ShopperTrak, IBM, Ariba, TIBCO/Reuters, Google, Playdom, Qualcomm, 23AndMe and Mint/Intuit.

So what does Euclid actually do? It uses preconfigured in-store sensors plugged directly into switch in the network closet to track the Wi-Fi signals on customers’ smartphones. In doing so, Euclid can map out and analyze customer shopping behavior, including things like foot patterns (the movement in and out and through the store), plus customer loyalty, retention rates, “dwell time,” and even things like “window conversion rates,” which can be thought of as the offline “click-though.” (A window conversion means a customer sees a window display and then decides to enter the store).

The technology has been in development for a year and nine months, says Smith. He also explains that the sensors don’t collect personally identifiable information on customers themselves, despite their ability to track an individual’s movements throughout the store. “The phones ping for access points in the store, and the sensor listens for that,” he says. “It then hashes the MAC address on the phone.” What that means is that the sensor isn’t storing the actual unique identifier (the MAC address) itself, but a representation of that. For customers who still feel uncomfortable, stores will display a sign indicating how to opt-out of the data collection process.

Although the data is not available in real-time (there’s a 12-hour delay), it is presented in an online dashboard similar to Google Analytics. The focus for the team’s efforts now is on improving the dashboard’s interface.

The analytics service will be sold to merchants on a subscription basis at a cost of $200 per sensor per month. One sensor covers around 1.3 zones (departments), so a large retailer like a Macy’s might need a few sensors to cover its whole store.

Palo Alto-based Euclid Elements has been in private beta testing with select retailers in the San Francisco Bay area like Philz Coffee, but is now open to all U.S. merchants.

Mobile shopping app aisle411 is partnering with ZipList, a recipe search and shopping list platform, in the newest release of the aisle411 iPhone app, out now. With the update, aisle411 version 2.0, is also adding better aisle navigation, mapping out an optimized path through stores, whether that’s to help you locate a single item or all the items on your shopping list.

For those unfamiliar, aisle411 is an indoor navigation app designed to help you find your way through large retail stores, like Lowe’s or Home Depot, as well as in grocery stores like Albertson’s, Giant, Safeway, Von’s and others. It’s certainly a useful service where available, but is currently only offered in a limited subset of stores in just a handful of regions in the U.S. (Boo!)

For the lucky few who can take advantage of the app, the updated Shopping List Manager will let you built lists online or in the app using typing, scanning or by speaking, the latter thanks to voice recognition technology powered by Nuance.

The new Recipe Search feature will now provide access to over 130,000 recipes, which can be integrated with shopping lists and routed through the app’s trademark Aisle Navigation.

Also new today is the launch of the aisle411 API and SDK, which will be provided to app developers for free. (Contact the company for more info on that.)

This summer, aisle411 was one of 3 apps that impressed the judges at the Plug and Play Tech Center’s EXPO, a showcase of the best of the startup accelerator’s latest group.

The updated app is available now in iTunes. An Android version will launch later this year.

Tagtile is a new company (and recent TechCrunch Disrupt Startup Alley participant), which is using the Square model involving free hardware to address the issues surrounding customer loyalty, management and rewards for brick-and-mortar merchants.

Like mobile payments service Square, which uses a free hardware dongle that attaches to a mobile phone, Tagtile also provides its merchants with a free hardware device – in this case, a white cube for customers to tap with their phone at checkout.

The cube is meant to serve as a stopgap solution until NFC (near field communication) really takes off in mobile. “In spite of all its promise,” explains Tagtile Co-founder and CEO Abheek Anand, “NFC has always been a technology that’s 3 years away…We want to focus on only one thing – changing consumer behavior.”

(Devices in stores – this is a thing now! See also: the iPod-based Perka, launched today). 

What Tagtile provides is a simple way for customers to register their visit to a participating merchant, in exchange for points, coupons, discounts or whatever other loyalty rewards the merchant wants to distribute. The customer simply launches an app on their smartphone (iPhone or Android, BlackBerry soon) and taps the cube at checkout to get the rewards. They can also check-in on Foursquare or Facebook via the app, or (soon) tweet about their visit.

The experience is very much like what an NFC-enabled solution would provide – it just doesn’t use NFC. Instead Tagtile leverages sensors common to mobile phones today to make the connection, but Anand doesn’t want to publicly discuss which sensors or how Tagtile is using them.

On the merchant side, the cube either plugs into a PC via USB to integrate with any existing point-of-sale system offering an SDK (software development kit). For those merchants without the USB option, Tagtile can plug directly into a wall outlet. In that case, the cube borrows the data connection on the user’s smartphone to send data back to Tagtile servers.

For consumers with privacy concerns, Tagtile is clear in that personally identifiable isn’t shared with merchants, only with Tagtile itself. Focused on the security of that data is Tagtile’s other founder, Soham Mazumdar, who spent six years at Google working on infrastructure and data mining for Google Search. Meanwhile, Anand previously worked in Product Management at Engine Yard, as an investor at Lightspeed Venture Partners, and as an early engineer at VMware.

Tagtile merchants can go beyond the basic “punch card” rewards system with service, getting access to something that’s more akin to a “Google analytics” for their store. Who shopped there, how often, when, etc. is displayed in a dashboard-like interface. Merchants can also narrowly target customers via campaigns – e.g. “everyone who hasn’t been back to the store in the past 2 months.” Tagtile serves as the middleman, delivering the message from the merchant to the shopper.

Currently, the company has 35 merchants across different verticals testing the service in San Francisco, New York, Florida, and the Maryland/New Jersey area. Tagtile is a few weeks away from closing its first seed round, expected at around $1 million. The round may also coincide with its public launch, also a month out.

In the meantime, interested merchants can sign up here.

After the discovery of a fake Apple store in Kunming, China caught the blogosphere’s attention, MICGadget ran down a selection of some of the more impressive fakes that have cropped up over the years, perhaps culminating in a Giger-esque egg pod version full of iPhones, Macs, and (though not for sale) the iPad 2.

Apparently the owner of the Kunming store was once an Apple authorized reseller until he jacked the prices and lost his license. Now he sells grey market hardware and grabs all of the marketing collateral from the Apple reseller portal.

Apple’s success and popularity in retail is its curse in China and it’s clear that Apple is paying for its failure to grab that continent early (although clearly they’re making up for lost time). Outright piracy in terms of sales dress, design, and trademark infringement aren’t half of the problem, I suspect. In fact, I support and after-sales activity are the biggest issues at these stores but, as anyone knows, if you’re dedicated to a brand you’ll do anything to grab the latest gear. While you can pop into an Apple Store in Beijing and Shanghai, it’s probably considerably harder to find one in Kunming, unless someone rigs one up with some wooden furniture and kliegs.

However, these fake stores will give folks who may not have been acquainted with the “magic” that is Mac a bit more experience and, as long as their not selling outright fakes, it probably doesn’t hurt Apple’s bottom line. Besides, it’s always fun for snarky tourists to take pictures in front of the iCool store.

The best thing? They’ve gotten a Wikileaks-like dump of data that is password protected.

Employees have had to download gigabytes of data from Apple corporate labeled, “training” in a password-protected zipped folder that won’t accessible to managers or anyone else until Saturday afternoon.

What could it be? A robot? A new iMac? A Steve Jobs replicant?

The holidays are usually an extremely brisk time for online sales and retailers are hoping this year will be better than last. Most retailers reported at least a 16% increase in sales last month, which bodes well for the rest of the season. Another interesting data point is the estimated Kinect sales numbers topping out at 425,000 since launch. This either suggests consumers aren’t ready to dance around in front of their TVs or, a more likely scenario, the Kinect will be the must-have item this season and parents are waiting before they buy.

As for the free shipping, the NYT isn’t very keen on the idea:

But given Wal-Mart’s scale and influence in the marketplace, its free pass for shipping sets a new high — or low — in e-commerce. And it may create an expectation among consumers — free shipping, no minimum, always — that would make it harder for smaller e-commerce sites to survive.

Free shipping, to be fair, will definitely make it much harder for the smaller sites to thrive this year. Incidentally, this Wal-mart deal on a previous-gen iPod Touch isn’t bad if someone has to play Secret Santa at the office.

The redesign, shown here, adds a bit of an edge to the previous white on black design. It’s not a huge change but they’ve take a more “headline” approach to the product lines and are featuring bolder photos.

Before

After

The takeaway, obviously, is that ecommerce sites still can exist even in the shadow of Wal-Mart and Amazon. The key, however, is to pound the niche.

BONUS – The first 1,000 users to pop over here will get instant membership and a $10 credit towards purchase. N.B. they will send you emails, so feel free to opt-out.

On the surface, Tecca looks like a pretty cool service. You download an app, browse it for devices you’re looking at in store, and figure out if the price is right. How? By checking out online prices, most notably the prices available from Best Buy, one of the investors in Fuse Capital, creator of Tecca. Even if the app brings up 50 other prices from 50 other stores, the assumption here is that BB has the best price.

Best Buy is already in the cat bird seat when it comes to electronics purchases. Companies that support “lowest price” challenges (we visit P.C. Richards in New York for appliances, for example) are beholden to their low prices and although they’re often draconian when it comes to checking your wallet on the way out the door. But they’re the only game in town and services like Tecca, even if they don’t immediately bring up Best Buy pricing, is an effort to solidify that concept before any upstarts come into the market.

The app will be available on Android and iPhone.

I don’t think the end of big box electronics shops is nigh. In fact, Apple Stores are doing great traffic and Best Buy and places like Target and Wal-Mart, with their limited electronics selection and surly employees, are probably not going to force their CEOs to eat cat food to survive. I’m instead worried about smaller chains in major cities – P.C. Richards, for example – being smashed under the weight of these behemoths. God wants us to be capitalists, but inherent in capitalism is the idea of competition.

Anyway, Tecca should launch soon and I doubt anyone will use it. After all, you just have to type the model number into Google and you’ll get hundreds if not thousands of strongly-held opinions on any product.

Best Buy‘s move to the UK has been known for a little while now, but, to quote Jim Ross, business has just picked up. Other stores in the UK are planning how to best confront the store when it makes its debut this spring. (The first one opens in May.) Luckily for the local guys, Best Buy doesn’t exactly have the best reputation out there. Fair or not, that’s the way things are.

Right, so Best Buy will (at first) open four big stores all over the UK: one in Essex; in Southampton; near Birmingham; and near Liverpool. Finally, Fernando Torres will know what it’s like to have the Geek Squad “optimize” his laptop.

That’s the initial plan. Should the stores end up being a hit, Best Buy would be willing to open more stores in more locations. Imagine: that big yellow logo somewhere on Oxford Street.

Best Buy will try to differentiate itself from other UK stores by focusing on a few things. One, its sales staff won’t work on commission, so that should help eliminate the scourge of the Pushy Employee. Two, Best Buy will offer to set up your purchase (computer, speaker system, etc.) the day you walk out the door. Three, the Geek Squad will be available 24 hours per day.

It’s 3am, and your Internet doesn’t work? Don’t worry, the Geek Squad will plug in the modem that you didn’t notice your cat knocked over.

Best Buy will be going up against the likes of Currys, a local electronics store. In response to the Best Buy invasion, Currys will open 33 brand new “megastores” in the UK. Some of these stores will be as large as a football pitch—that means “soccer field,” my fellow Americans.

Big, yes.

I sorta feel talking about retail and customer service is not exactly my strength—or, really, anyone who knows how to order something from Newegg or Amazon. People like us don’t need the Geek Squad to set up our laptop, or to string speaker across our living room. We can do all of this (and more!) completely on our own, and we enjoy doing so. So the value of all this customer service from the likes of Best Buy (or otherwise for that matter) is sorta lost on us. Best Buy can say, “We’re emphasizing customer service!” and we’re like, “Whatever, dude, you violated my civil rights. I can install Firefox on my own, thank you very much.”

Good luck to all parties involved, though. Nothing wrong with trying to make a few dollars, or quid in this case.

Free shipping from Kohl’s was the most popular online coupon in January, while a 20% off coupon for The Gap was the most printed coupon. The whole report is available online.

Top 10 most searched stores in online coupons in January:

1. Victoria’s Secret
2. Amazon
3. Domino’s
4. Kohl’s
5. JCPenney
6. Macy’s
7. Papa John’s
8. Bath & Body Works
9. Best Buy
10. Barnes & Noble

Top 10 most searched brands in printable coupons in January:

1. Fantastic Sams
2. Dave and Buster’s
3. Kentucky Fried Chicken
4. IHOP
5. Mellow Mushroom
6. Stanley Steemer
7. Moe’s Southwest Grill
8. Sport Clips
9. Cost Cutters
10. Dick’s Sporting Goods

Top 10 most searched categories in printable coupons in January:

1. Food
2. Apparel
3. Restaurant
4. Clothing
5. Oil + Change
6. Car + Wash
7. Hair + Salon
8. Sit-down + Restaurant
9. Haircut
10. Dining

Top 10 states using online coupons in January:

1. New York
2. Massachusetts
3. New Jersey
4. Connecticut
5. Virginia
6. Maryland
7. Rhode Island
8. Illinois
9. New Hampshire
10. Missouri

Top 10 states using printable coupons in January:

1. New Jersey
2. Minnesota
3. New York
4. Illinois
5. Pennsylvania
6. Connecticut
7. Georgia
8. Delaware
9. Arizona
10. Florida

Via BusinessWire

I noticed the fellas from PoketyPoke each carrying around an iMac box after the Digital Experience event at CES last week. “Wow, you guys really went all out,” said I. “Yeah,” said they, “Did you know you can rent an iMac for two weeks for $120?”

I had not heard of this, no sir. But it seemed like a smart idea, especially if you’ve got a product to show off at a large gathering full of reporters. And people love iMacs, from what I understand. I wondered aloud what kind of program Apple had in place for such rentals.

Apparently Apple’s iMac rental program is called “a 10% restocking fee.”

Jamie Siminoff of PoketyPoke did a little math for us:

1.  Cheapest iMac rental I could find was $295.75 per week or $42.25 per day.

2.  Our Macs cost us $119.90 for 14 days or $8.56 per day.

3.  Instead of getting old beater Macs, ours are brand new.

4.  If you buy using Platinum American Express (I did) you get loft and damage insurance that covers the duration of the “rental”.

5.  Because Apple charges re-stocking, I am paying them for the service (the moral side of this). Also I am displaying Apples at a trade show, hell they should pay me.

I actually used to have a supervisor at Best Buy waaaaay back in 1995 who would swap out for a new computer every month. Back then there was no such thing as a restocking fee and the return window on computers was a full 30 days. The managers at my Best Buy (Store #5, Edina) finally told my supervisor that he couldn’t keep swapping out computers like that, to which he replied something along the lines of “Yes, I can. There aren’t any rules or fees to make what I’m doing illegal.”

And that’s how we got restocking fees and 14-day return windows. At least, I’m almost convinced that he was singlehandedly responsible for restocking fees and shorter return windows becoming commonplace in retail electronics stores. That might just be my own personal urban legend, though.

My predicament, in pictures:

BestBuy.com’s holiday ordering deadlines (see here). I needed to have ordered an item before yesterday at 11AM Eastern that says “Usually leaves our warehouse in 1 business day” in order to receive it by Christmas.

I order the above item. It says “Usually leaves our warehouse in 1 business day.”

But wait! There’s more!

I ordered the item last Thursday, December 17th – four full days before the deadline.

And when checking the tracking number via UPS.com last night, here’s what I got:

Shipment sent out on Friday, December 18th – fair enough – with a scheduled delivery date of December 29th, a full four days after Christmas. Santa will be long gone by then!

To its credit, Best Buy is offering people who don’t get their stuff by Christmas the following:

So that’s $20 plus $6.95 in reimbursed shipping charges. Fine, I guess. I just reordered everything via in-store pickup instead but let this be a lesson to everyone to DOUBLE CHECK THE SHIPPING INFORMATION FOR YOUR ONLINE ORDERS. The person who’s receiving this gift would have understood if it didn’t show up until the 29th, your small child may not.

Cyber Monday might have turned out to be better than expected. Online retailers saw a 13.7 percent increase in sales compared to last year, and 24.1 percent more than on Black Friday 2009. The latest data comes from Coremetrics, a Web analytics service used by more than 500 retailers including Abercrombie & Fitch, Bath & Body Works, Bloomingdale’s, Macy’s, Nordstrom, Office Depot, and Williams-Sonoma.

The average online order was $180.03, compared to $170.19 on Black Friday and $130.24 last year. Consumers also bought 10 percent more indivual items than on Friday, and 30 percent more items than last year.

The average session length across Coremetric’s sample was 7:32 minutes, down from 8:23 minutes last year, but the percentage of visits that actually resulted in an order increased to 5.26 percent from 3.99 percent last year.

Coremetrics is just one set of data about Cyber Monday sales, and reflect the large retailers who use its product. Those retailers did better on Black Friday (up 24 percent) than broader estimates from comScore suggested for the online retail sector as a whole (up 11 percent). ComScore has not yet released its Cyber Monday data.

Photo credit: Flickr/garethjmsaunders

So why by all that’s holy, is “Transformers 2″ the best selling DVD/Blu-ray (in first week sales) of 2009? I think the issue is that this year has been somewhat dry as far as good movies go. “Transformers 2″ does appeal to a wider audience, and that’s why Paramount has sold 7.5 million copies in the first week that it’s been available. “Transformers 2″ did fall short of the 8.3 million discs sold in the first week by the original Transformers film.

This has been confirmed by both employees and witnesses. Microsoft has stated that the machines sold in their stores will be considered to be part of their signature line, and therefore will not include any unnecessary third party software. They will come preloaded with the optional Windows Live Essentials pack, Bing 3D Maps, Security Essentials, and the Zune client. Previously, the only PC manufacturer that has promised ‘craplet’ free systems has been Toshiba, however Sony and Dell have made such configurations available as an option.

[via electronista]

According to the press release, “Thousands of items are now available for Local Express Delivery. Amazon Prime members pay just $5.99 per item for the service.” Amazon Prime costs $79 per year and extends free two-day shipping or overnight shipping for $4 per item to subscribers. I have it and it’s totally worth it if you order a lot of stuff from Amazon.

Non-Prime members will pay quite a bit more for same day shipping, with items carrying a shipping fee based on the type of item ordered and, in some cases, the weight of the item. Certain items, like CDs and DVDs for instance, cost $10.99 per same-day shipment plus $2.99 per item. So order three CDs and it’ll cost you whatever the CDs are priced at plus $10.99 + $2.99 + $2.99 + $2.99. Not cheap but, hey, the heart wants what it wants.

Each of the seven eligible cities has a cutoff time by which products need to be ordered. In Seattle, where Amazon is headquartered, the cutoff time is 1:00 PM. In New York City and Philadelphia, it’s 10:00 AM; in Boston, Washington, D.C. and Baltimore it’s 10:30 AM; and in Las Vegas it’s 11:00 AM. Future cities include Chicago, Indianapolis, and Phoenix.

Amazon Launches Same Day Delivery in Seven Major Cities and Expands Saturday Delivery Options [Amazon.com]

Is it to early to proclaim—loudly, as you do—the practice of buying video games at retail dead? Yes, it probably is too early; yet we continue. Microsoft’s announcement today that it will make available, sometime this year, full retail games available for download via Xbox Live, may well be more important than Project Natal, or “Project Christmas” as I like to call it. (All those months spent learning Portuguese have finally paid off!) And while, yes, it make be too early to make any sort of rushed pronouncements, I’d say it’s say to start thinking about the future.

Now, to PC gamers, the ability to download full games via the Internet isn’t exactly shiny and new. Steam‘s legitimacy has long been established, and smaller outfits like Good Old Games seem to be gaining traction. And, to be fair, console gamers have been able to buy older gamers, like Genesis-era Sonic, NES/SNES-era Mario and the original Halo, for a while. But the ability to buy something like Halo: ODST on launch day, right from the comfort of your couch, should be celebrated. (Note: I have no idea if Halo: ODST will be available for download. I just needed a new game to illustrate a dumb point.)

It’s a simple as this: would you rather download the game directly to your hard drive, and start playing it immediately, once the release date hits, or would you rather go to a store—wherever that it!—or wait for UPS to show up, care of Amazon.com? Provided you have the hard drive space—come now, Microsoft, you really ought to lower the price of the 360′s hard drive—I’s say the choice is obvious. Send me a PDF of the manual and we’re all set.

(I write this wondering how Sony will handle the PSP Go!. Assuming it is, indeed, UMD-less, will it totally move PSP game buying to the PSN Store, or will you still be able to walk into Wal-Mart and buy a box with a downloadable code inside? After all, not every young teen has access to a credit card; how will these kids buy games, hence?)

And you do wonder how companies like Best Buy and GameStop will react to this. Probably with some quick-fire PR speak: “We think gamers value the experience of going to a store, and speaking to a knowledgeable sales rep about all the latest titles.” Well, I don’t, but I’m not exactly Joe Sixpack when it comes to such things.

I, for one, welcome our download-only overlords.

Photo: Flickr

Though the kiosks, which are from a company called e-Play, are currently located in almost 80 Wal-Mart stores across the Northeast, you don’t actually get in-store credit for games and movies you trade in. Instead, the money is put onto your credit or debit card within 2-3 days. A Wal-Mart rep told Kotaku that if the program is successful, the retail giant would eventually let people receive Wal-Mart credit — presumably instant credit — that could be spent in the store.

Trade-in prices are set by e-Play and are “based on a proprietary algorithm that can change as regularly as daily based on a number of different factors,” according to Kotaku. A quick glance at the step-by-step trade-in instructions on e-Play’s website shows a $3.60 credit for either NCAA March Madness 06 or 08. The basic process involves scanning the UPC barcode of your game or movie, agreeing or disagreeing with e-Play’s price quote, and then swiping your drivers license and credit card before inserting the disc into the machine.

It’s a pretty good idea in theory. Yes, you might be able to get better trade-in values elsewhere but these machines will likely appeal to a more impulsive crowd, and the proposed Wal-Mart credit would certainly be a plus. “Hey, Ma! I’m on’ take muh video diskettes to Wal-Mart and wrangle me up a swap fur some Sam’s Choice cola bev-a-rines!” That’s how I talk in real life. I’m not making fun of anyone.

[NeoCrisis via Kotaku]

With retail electronics stores closing down faster than the backwards-spinning water in an Australian toilet bowl, Best Buy is now trying to figure out how to compete with remaining high-volume, low-price super retailers like Wal-Mart.

And while trying to take on Wal-Mart’s ultra aggressive pricing isn’t necessarily in the cards, “Best Buy supposedly intends to create differentiation by playing up its product demonstration ability,” according to Electronic House.

The problem with that strategy, however, is that in order to pull off effective and informative product demonstrations, you need a relatively highly-skilled workforce which, in turn, demands relatively high wages.

Take Magnolia Home Theater, for instance, Best Buy’s premium home electonics division. Average hourly wages currently hover around the $17-$18 range. However, effective June 3rd, Best Buy will be cutting pay for Magnolia personnel to $12.56 an hour according to CE Pro. Best Buy contends, however, that the wage cuts “aren’t that cookie cutter” and are ultimately a strategy to get more salespeople in front of customers.

Specialty electronics dealers aren’t convinced, though. Richard Gilkes, executive director of Home Theater Specialists of America (HTSA) says:

“I don’t want Magnolia to fail. It’s very important for consumers to have a step-up buying opportunity that eventually leads to an HTSA member. It’s also important for vendors to have a company like Magnolia to fill their capacity. [However] when you’re going to offer $12.50 per hour to your sales people, you’re not going to get an educated sale. Quite frankly, the next step will be to shut the whole thing [Magnolia] down.”

Whatever the case, cutting the salaries of relatively skilled workers by around 30 percent will undoubtedly cause many of those workers to quit. In turn, their jobs will be filled by relatively unskilled workers willing to work for $12.56 an hour. If this all sounds familiar, it should, because it’s pretty close to what happened at Circuit City.

The major difference now, however, is that there are far fewer competing stores remaining for former Magnolia salespeople to find new jobs. Best Buy is quickly becoming the only big-box electronics game in town, a fact the company surely realizes.

Retailers: Big Changes Coming to Electronics Stores [Electronic House]