The rise of hhgregg could be the second coming of Best Buy, reports Miguel Bustillo in the Wall Street Journal (2/5/10). "Barring a major setback, this looks like the next national chain in this space," says analyst Brad Thomas. One reason is that hhgregg has been "getting cut-rate rentals on locations once held by Circuit City, Inc., which closed last year." Another is that hhgregg sells relatively more appliances than its rivals, and appliance sales are up these days.

But the main reason is that hhgregg has differentiated itself by empowering its sales staff to negotiate deals with shoppers. Unlike Best Buy, and other national chains, hhgregg does not place its fortunes in the hands of "an hourly-wage workforce." Instead, it hires experienced personnel, pays them on commission, and lets them haggle with shoppers in hopes of talking "customers into buying higher-priced televisions and washing machines."

It appears that at least some shoppers like this. "You can work with them," says Michael Rodriquez "who recently haggled and won a reduced price on a washer, dryer and refrigerator." He adds: "We looked at the traditional options, like Sears. But at hhgregg, there was also more of an ability to negotiate." Hhgregg plans to open "40 to 45 stores in the ... coming months as part of a broader plan to expand to 600 stores this decade from 127 currently." The retailer projects fiscal 2010 sales of $1.53 billion, up 51 percent since 2007.

Much of the success of Nintendo's Wii can be attributed to its roots in early videogames like Pong and Space Invaders, suggests Jesper Juul in "A Casual Revolution," as reviewed by Jonathan V. Last in the Wall Street Journal (12/16/09). It's been largely forgotten, but when those early games arrived back in the '70s, they were "intergenerational hits." In fact, the Los Angeles Times wrote that "never before has an amusement game been so widely accepted by all ages. Everyone from teenagers to senior citizens enjoy the challenge that Video Games offer."

But within a short time, "a distinctive videogame culture ... developed and gamer demographics narrowed ... Both mall arcades and home consoles came to be dominated by adolescent boys." As Jesper explains: "When videogames developed a new expressive and creative language of their own ... they also shut out people who did not know that language." For one thing, games were embedded with secret codes, creating a certain syntax that only gamers knew. For another, game controllers evolved from simple joysticks to incomprehensible monstrosities.

And so "the videogame industry wandered into a ghetto" of "pimply-faced middle-schoolers and ne'er-do-well twentysomething" males. This didn't change until 2006, when Nintendo introduced Wii, which centered on both simple games and, of course, the now-famous "mimetic" controller that, as Jesper says, "encourages short game sessions played in social contexts." Anyone can play because the games are "based on activities with which most people are passingly familiar." Jesper refers to this as "casual games" and notes that they are shifting videogame demographics back toward females and older folks -- to where they were in the first place, the great mainstream.

It turns out that the happier you are while shopping, the more likely you are to spring for an extended warranty, reports Damon Darlin in the New York Times (11/9/09). Retailers know this, of course, and price the warranties accordingly: "For instance, a four-year warranty on the Nikon D3000 camera at Best Buy is $150, or more than 27 percent of the $550 price. The warranty on a Hewlett-Packard N270 netbook is $130, or just short of a third of the computer's $400 price."

However, Consumer Reports says that overall failure rate of 10 brands of cameras over a three-year period is just 10 percent. For televisions, it is just three percent. For laptops it is 43 percent, "but that includes accidents and keyboard spills (which often aren't covered by basic extended warranties)." Meanwhile, "washing machines, which typically have a far higher failure rate than television sets, carry extended warranties that are about eight percent of the product's price)."

Apparently, this is because it's harder to sell a shopper on a warranty for a product that they're just not all that excited about. A study by the Journal of Consumer Research (link) "found that people were more likely to buy warranties on products that brought them pleasure ... than on ones that were merely useful." The study "also found that people were more likely to buy an extended warranty if they received a discount on the product, especially an unexpected one. The windfall makes people feel good. And a positive mood makes people more risk-averse because they are afraid of losing that good feeling, which makes potential losses look greater."

"Wal-Mart is trying to copy us," says Brian Dunn, Best Buy's CEO-designate, reports Miguel Bustillo in the Wall Street Journal (3/16/09). "But there is one thing nobody can copy, and it's this," he adds, as he grabs "a Best Buy employee wearing one of the company's blue polo shirts." Brian should know. His first job at Best Buy, 24 years ago, was as a stereo salesman. He never went to college, but has worked his way to the top -- from salesman to store manager to district manager to regional v.p. to head of retail to COO to CEO.

"Brian's particular gift is that he is genuinely interested in the blue-shirts as people, and they can tell," says Brad Anderson, Best Buy's outgoing CEO. "What that gives you that a lot of leaders miss, is that you understand what is happening in an organization on a more granular level." Or as Brian himself explains things: "We want our stores to morph into a series of experiences ... To do that, you have to go where the rubber meets the road, the sales floor." So, instead of trying to compete against Wal-Mart on price, Brian plans to win with the shopping experience.

Brian's idea is "to leapfrog competition from Wal-Mart by transforming the retailer's stores into lively showrooms for the latest gadgets ... to win customers by matching Wal-Mart on prices, and then offering something more, building on Best Buy's existing strategy of helping customers navigate increasingly complicated technology." He envisions "more interactive stores, where customers can step into the world of a new videogame or see their faces captured by a high-definition video camera, instead of trolling aisles stacked with merchandise." ~ Tim Manners, editor.

It's not just your imagination if you feel like you're on the set of the "Royal Tenenbaums" while staying at the Jane Hotel in Manhattan, reports Fred A. Bernstein in the New York Times (2/15/09). The hotel actually is one of a number that is inspired by a film with a goal of creating "an environment that has the drama and specialness of a film." In the Jane's public spaces, the idea is to create something of the feeling of "a grand but slightly shabby mansion," like the one in which the Tenenbaums resided in the film.

Sean McPherson of the Jane says successful hotel design is achieved when "the ordinary qualities of life (are) edited out." For the Jane, as in the film on which its design is based, the secret is "making things 10 percent off reality -- not just surreal, just a little bit odd." The Jane actually also draws on two other films. It's motto, "A day or a lifetime," is taken from the fictional Hotel Earle from the 1991 film, Barton Fink, as are the hotel desk clerk uniforms. The Jane's rooms, meanwhile, are based on the staterooms in The Darjeeling Express, a 2007 film "about a surreal train trip through India."

Sean also created The Bowery Hotel based on Stanley Kubrick's The Shining, a horror film, but, he says, "hopefully without the creepiness ... The idea is to create something that is old and grand and hopefully slightly bigger and more storied than its guests and owners." The bellmen's uniforms rely "on another Kubrick film, A Clockwork Orange," by evoking "the film's violent hooligans." Sean says he tries not to be too literal, and really just wants people to feel like they're somewhere distinctive and memorable. "It's very much as if you're building a set and everyone becomes a character in the film you're making there," he says. ~ Tim Manners, editor.

"Like eating only locally grown food or majoring in gender studies at college, Macs have become luxuries that command a premium out of all proportion to their utility," writes Dan Akst in the Wall Street Journal (1/16/09). Dan says he's a former PC guy who two years ago switched to Macs, but is now back to PCs. "The reason," he writes, "is simple: Macs nowadays are computers for the rich." He says he switched to Macs because of the PC's "random glitches and security problems," but switched back because of the Mac's price.

"Today," writes Dan, "a Mac costs roughly twice as much as a comparably equipped PC -- and in my experience, the PC performs impressively indeed." His box of choice is a "$646 Dell ... complete with 20-inch flat panel display and gigantic hard drive." He says it "runs superbly, thanks to ample RAM and a discrete video card." He adds that he even likes "the much-maligned Vista operating system." As for security issues, he feels that Norton Internet Security software has proved to be a useful antidote."

Dan's issue, then, is that it's just too expensive to be cool. "It's cool, for example, to spend a fortune on solar panels or hybrid SUV's that will never pay for themselves in saved energy, even though the money could do far more for the environment spent in some less ostentatious way," he writes. This particular "kind of cool disdains luxury labels like Rolex and Coach yet works just as hard to impress." As for the Mac, Dan notes that Apple's response to trends toward tiny $350 netbooks "that focus on the basics" is a 17-inch, $2,700 laptop with all the bells and whistles. "Cool just isn't worth it anymore," he concludes. ~ Tim Manners, editor

One thing in particular separates the winners from the losers at retail, reports Jayne O'Donnell in USA Today (7/23/08). That thing is "service," according to Chris Denove of J.D. Power and Associates. "Across many industries, we've seen that the retailers that grow customer-service ratings the fastest have greater sales growth," he says. The phenomenon is perhaps most pronounced in the consumer-electronics category, he notes, because as prices have come down, the complexity of the products has gone up. "Expert advice is more important than ever," he says. That may be the best explanation why Best Buy is doing really well and Circuit City, not so much.

Where Best Buy has invested in knowledgeable salespeople as well as its vaunted "Geek Squad," which helps customers set up their laptops and HDTVs, Circuit City has gone the opposite route. As Chris Denove points out, Circuit City "decided to cut out its high-paid commissioned salespeople in favor of a younger and less experienced sales force. While the move saved money in the short-run, it also triggered "a downward spiral in sales," says Chris. Circuit City also laid off some 200 workers from Firedog, which is its version of Geek Squad, and completely shut down its "cable-TV installation unit."

Circuit City does say it is taking steps to improve its service. And it can take heart in that J.D. Power rates its service higher than that at either Wal-Mart or Target (where most shoppers are more likely interested in a low price than in great service). But both Best Buy and Circuit City should be keeping an eye on "small specialty stores," where the prices may be high but the service tends toward fantastic. Indeed, "J.D. Power found it took more than three times as long to be helped at either Best Buy or Circuit City than at specialty stores." According to D.L. Baron of Experticity, "research shows at least 20 percent of customers will leave a store if they aren't helped quickly. In this economy, few companies can afford that risk." ~ Tim Manners, editor

Meet the iBand -- Seb, Roger and Marina -- three Austrian art students who use their iPhones and Nintendos as musical instruments and are the latest YouTube sensation, as reported by Eric Taub in The New York Times (3/3/08). "Of all the things you can do with a mobile phone, what could be more meaningful than to create music?" says Seb, 24. "We have been thinking about forming a band that would only use iPhones as musical instruments," he adds. But first, Seb and his bandmates had to hack into their iPhones (something Apple discourages) so they could install the necessary software.

In this case, this included a program called PocketGuitar, along with piano and drum programs from Moo-Cow Music. The trio also used a Nintendo DS videogame called Electroplankton. iBand's first effort, described as a "jam session" was "fairly rudimentary ... more songlike noise than melody." Uploaded to YouTube, it "had been viewed more than two million times as of Sunday (video here), with more than 13,000 viewers leaving comments." Surprised but also encouraged by the results, iBand has now posted encores, including "Life Is Greater Than the Internet," featuring "vocals, in accented English, by Marina (video here).

Pretty catchy, if you ask me. Some fans have requested MP3s of the songs, which iBand has now done (link here). However, as Seb observes: "To use the iPhone as a musical instrument isn't about getting a technically perfect song together ... It has very innovative input methods, but we could use any sort of synthesizer and full band equipment; with today's technology there are no limitations. But we think that exactly the limitation is what creates a spirit." Yes, one of their songs is interrupted by a phone call! Apple, meanwhile, plans to introduce "an iPhone software developers' kit" later this week. Hopefully, that won't spoil everything. ~ Tim Manners, editor