Back from the Dead
Five years ago, no one would bet on Best Buy. The poster child for showrooming, Best Buy appeared destined for the same graveyard that housed vanquished competitors Circuit City and Radio Shack. Best Buy appointed Hubert Joly as its new CEO in 2012, and he developed a plan dubbed Renew Blue that featured:
- Matching rivals prices, which sent the message to consumers they did not have to shop anywhere else.
- Expediting shipping by expanding its distribution center and improving the website and Best Buy app to enable consumers to buy online and pick up in store. Today, 40% of online orders are picked up in the store. This omnichannel option enabled Best Buy to compete with Amazon Prime’s free shipping.
- Enhancing customer experiences both online and in-store to enable customers to experience products firsthand. You can’t tell the difference in picture or sound quality of electronics online. Consumers need to go to a brick and mortar store to see those characteristics firsthand. Additionally, Best Buy invested in employee training so that they could better explain differences in products. Best Buy realized technology can be confusing, and since consumers are going to spend a lot of money on a new television, they want to be reassured and confident that they are making the right choice.
- Dedicating store space to start-up businesses. Best Buy’s partnerships with product innovators make it easier for customers to be the first to see and buy innovative products (Wal-Mart, Target and Amazon also are providing space for start-ups to showcase their products and services).
- Eliminating obsolete products such as CDs and DVDs to provide space for stores within Best Buy stores. Samsung galleries replaced these products in 1,400 stores. Other partners that are featured at Best Buy stores are Microsoft, Verizon, Pacific Sales and Magnolia.
- Expanding Geek Squad offerings by rolling out an in-home advisory service that offers consumers free advice to connect all of the electronic and Bluetooth-enabled devices in a home.
- Trimming the fat by eliminating jobs and tweaking its supply chain to generate savings.
What are the lessons for BKBG Members?
- Improve the customer experience. Train your teams to look through the lens of their customers. It’s not about how many finishes a product offers or number of wood species available. What’s important is what the customer believes is important.
- Many customers don’t want to wait for products. Have a set of core products that can either be delivered quickly or shelved for cash and carry business.
- Provide innovative, cutting-edge, customized product areas in your showroom. Create a store within a store that features the latest technologies and showcases your partnerships with BKBG Preferred Partners that allow you to make one-of-a-kind products.
- Feature working displays that allow customers to experience products firsthand.
- Partner with local chefs and host cooking demonstrations in your showroom.
- Partner with local wine merchants to offer wine tastings in your showroom. Can you think of a better way to sell a wine cooler?
- Improve your website by answering the questions that customers ask most often, and provide guidance to help consumers in their purchasing journeys. Place reviews of different products on your website and feature before and after pictures of projects. Write project case histories.
Online etailers such as Amazon and others are not going away. The main lesson from Best Buy is that shopping is a sensory experience that does not occur when purchasing online. You need to go to a showroom to truly recognize what different finishes look like, appreciate the differences in wood grains and textures and see firsthand innovative storage options.