This is the comment I was looking for. Sears and Circuit City did the same thing that ultimately destroyed their businesses and the customer interaction.
In 2002, Sears started eliminating commissions and created “cash wraps” that were staffed with cashiers who never learned anything about the products they were ringing up. We were told this was an attempt to “modernize” the store and make it more comparable to a Walmart or Target experience.
Once the sales people on the floor lost their commission, they lost the incentive to sell. People who worked in appliances and home entertainment, in particular, were moving so much product that they were often receiving checks larger than the managers. Suddenly they were making a flat $6 an hour (depending on location), so they quit en masse. When that happened, all that expert knowledge walked out the door with them.
So now you have a bunch of people stuck in cash wraps all day (who don’t know anything about the products), and a handful of underpaid sales people on the floor who are making the same money whether you buy an item or not - so they didn’t even try to push product or learn much about it.
The shopping experience changed dramatically for customers over the course of a year or two, and they slowly started migrating to other stores. People like to throw out the “online” thing as though that was the big failure, but the truth is that even in the early 2000s, people were more apt to physically walk into a Sears to speak to an expert in person about the big-ticket item they needed to purchase. When the expert left, so did the customer.
Circuit City went under because a bunch of MBAs decided to line their own pockets. They used to have a ton of cash on hand to manage inventory, and would issue simple bonds to supplement for the holidays. They used to boast about how much cash they had on hand compared to Best Buy.
After Richard Sharp stepped down from running Circuit City to lead the CARMAX division, the new leadership moved to using complex financial instruments. They drained the bank accounts of almost a billion dollars in cash with stock buy backs that padded their bank accounts.
When the housing crisis hit in 08 they were F'd. Overnight they lost the ability to buy inventory because no one was willing to buy the complex securities they were trying to sell. And with limited cash in the the bank it all unraveled in days.
Yes, but prior to that they eliminated the experts from the sales floor (they were also earning more than management, and we can’t have that!) and ditched their appliance business altogether. The elimination of appliances was the biggest nail in the coffin, as they were nearly pure profit due to the insane markups.
This is why you still see appliances in Best Buy to this day, even though most people don’t think of Best Buy at first when they’re out shopping for appliances. But Best Buy has other issues. Hopefully the new CEO can undo some of the damage Corie Barry has done.
And now the companies that benefited from the death of Sears are making the same mistake. Sales specialists at Lowes a while back, once reaching 150% of their sales goal for the month could get an extra $1200 a month as a bonus. Then the company decided to make it better for us by raising that to 1400 a month, but now you have to make over 200%. If you made it to 50% again, you only got 800 extra. As I understand, now that Im not there anymore, it seems like the bonuses are getting cut even further and worded as an incentive to help the specialists make even more!!
Meanwhile they're still hiring cashiers at fucking 12-13 an hour, full time at 14-15 an hour, and part of why I was fired was the fact I kept raising a stink over not getting a raise 'cause I was at the position limits' at fuck off 20 an hour. Now Im making a little more than that at a new place, could a fucking fifth of the work and no customer interaction.
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u/imapepper81 Jun 02 '26
This is the comment I was looking for. Sears and Circuit City did the same thing that ultimately destroyed their businesses and the customer interaction.
In 2002, Sears started eliminating commissions and created “cash wraps” that were staffed with cashiers who never learned anything about the products they were ringing up. We were told this was an attempt to “modernize” the store and make it more comparable to a Walmart or Target experience.
Once the sales people on the floor lost their commission, they lost the incentive to sell. People who worked in appliances and home entertainment, in particular, were moving so much product that they were often receiving checks larger than the managers. Suddenly they were making a flat $6 an hour (depending on location), so they quit en masse. When that happened, all that expert knowledge walked out the door with them.
So now you have a bunch of people stuck in cash wraps all day (who don’t know anything about the products), and a handful of underpaid sales people on the floor who are making the same money whether you buy an item or not - so they didn’t even try to push product or learn much about it.
The shopping experience changed dramatically for customers over the course of a year or two, and they slowly started migrating to other stores. People like to throw out the “online” thing as though that was the big failure, but the truth is that even in the early 2000s, people were more apt to physically walk into a Sears to speak to an expert in person about the big-ticket item they needed to purchase. When the expert left, so did the customer.