The news report that Best Buy CEO Hubert Joly will be working as a salesperson in a Minnesota Best Buy is great news just ahead of the holiday season as is the idea of managing supplier relations for competitive offerings. For Best Buy is in serious trouble with declining same store sales in eight of the last nine quarters.
Best Buy has become like a free showroom for Amazon where customers go to touch, feel and understand products from highly knowledgeable salespeople- and then buy online from Amazon or other online retailers or warehouse stores like Costco. If Hubert Joly can figure out the success model for a brick retailer like Best Buy - he'll do great service to a whole bunch of brick based customer interaction organizations. These include brick retailers, banks, education and yes healthcare. Why? Because think of any business "brick" building where a customer interacts with an expert (the Best Buy sales people are experts -comparatively speaking) which allows really understanding stuff that builds the customers basic 101 knowledge in terms of say product features like why should you care about the Random Access Memory (RAM) in a computer? After gathering this knowledge the customer is really free to shop on line. More so in the US where competition and going for the best "value" is seen as doing the right moral thing rather than paying a higher price just for the great experience and advice at Best Buy.
Based on news reports Best Buy and Hubert Joly's game-plan seems to be:
- Supplier Relations: If suppliers provide exclusive products, deals including bundles exclusively to Best Buy , it could be a huge plus. Think of an exclusive look HP laptop computer that comes with a printer at only Best Buy. The trouble is that when the customer goes checking online Amazon will automatically suggest printers. Enter the Geek Squad , particularly for those who are less tech savvy and do not wish to be bothered with the entire DIY effort. Will Best Buy be able to cleanly target customers who can afford and really value the Best Buy expertise and shopping experience? Also make sure that suppliers treat their supplies to Best Buy as truly exclusive in that - similar models are not available at online or other stores.
- Store Psychology: The Best Buy shopping experience is a great one for the customer and CEO Hubert Joly's idea of working as a salesperson should help the top leadership understand exactly how the sales force is organized, recognized and compensated. By sharply focusing on customer segments that are likely to buy from Best Buy (values experience, less DIY) and getting the promotions, merchandizing, sales force and service Geek Squad to work together, might just do the trick. For example, every salesperson across all stores should be able to articulate exactly why a particular product can only be found at Best Buy to a prospective customer.
Retail sales at Best Buy for the 2012 holiday season will be carefully watched by everyone interested in bricks vs. clicks business models. Contact StratoServe.