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jerryking : best_buy   10

Best Buy’s Secrets for Thriving in the Amazon Age
SEPT. 18, 2017 | The New York Times | By KEVIN ROOSE.

Here are the keys to Best Buy’s turnaround, according to Mr. Joly:

1. Price, price, price

The most worrisome trend in big-box retail was “showrooming” .....To combat showrooming and persuade customers to complete their purchases at Best Buy, Mr. Joly announced a price-matching guarantee....Price-matching costs Best Buy real money, but it also gives customers a reason to stay in the store, and avoids handing business to competitors.

2. Focus on humans

Mr. Joly also realized that if Best Buy was going to compete with Amazon, which has spent billions building a speedy delivery system and plans to use drones to become even more efficient, it needed to get better at things that robots can’t do well — namely, customer service & customer experience....Best Buy fixed its internal product search engine. It also restored a much-loved employee discount that had been suspended and embarked on an ambitious program to retrain its employees so they could answer questions about entirely new categories of electronics, such as virtual reality headsets and smart home appliances.....Customers had always loved Best Buy’s Geek Squad.....sometimes, people needed help before they bought big and expensive gadgets. So it started an adviser program that allows customers to get free in-home consultations about what product they should buy, and how it should be installed....a pilot program last year, the service is now being rolled out nationwide.

3. Turn brick-and-mortar into showcase-and-ship

Best Buy’s online ordering system was completely divorced from its stores. If a customer placed an order on the website, it would ship from a central warehouse. If that warehouse didn’t have the item in stock, the customer was out of luck.....Mr. Joly realized that with some minor changes, each of Best Buy’s 1,000-plus big-box stores could ship packages to customers, serving as a mini warehouse for its surrounding area. Now, when a customer orders a product on Best Buy’s website, the item is sent from the location that can deliver it the fastest — a store down the street, perhaps, or a warehouse five states away. It was a small, subtle change, but it allowed Best Buy to improve its shipping times, and made immediate gratification possible for customers. Now, roughly 40 % of Best Buy’s online orders are either shipped or picked up from a store.

Best Buy also struck deals with large electronics companies like Samsung, Apple and Microsoft to feature their products in branded areas within the store. Now, rather than jamming these companies’ products next to one another on shelves, Best Buy allows them to set up their own dedicated kiosks. (Apple’s area inside a Best Buy, for example, has the same sleek wooden tables and minimalist design as an Apple Store.) It’s a concept borrowed from department stores, and it’s created a lucrative new revenue stream. Even Amazon has set up kiosks in Best Buy stores to show off its voice-activated Alexa gadgets.

4. Cut costs quietly

Almost every business turnaround plan includes cutting costs. Best Buy has used the scalpel as quietly as possible, gradually letting leases expire for unprofitable stores and consolidating its overseas divisions, trimming a layer of middle managers in 2014, and reassigned roughly 400 Geek Squad employees within the company. No public rounds of layoffs, which can crater employee morale and create a sinking-ship vibe.

Best Buy has also found more creative penny-pinching methods. Once, the company noticed that an unusually high number of flat-screen TVs were being dropped in its warehouses. It revamped the handling process, reducing the number of times TVs were picked up by a clamp lift and adding new carts to prevent TV boxes from falling over. The changes resulted in less broken inventory and bigger profits.

5. Get lucky, stay humble and don’t tempt fate

It’s lucky that the products it specializes in selling, like big-screen TVs and high-end audio equipment, are big-ticket items that many customers still feel uncomfortable buying sight unseen from a website. It’s lucky that several large competitors have gone out of business, shrinking its list of rivals. And it’s lucky that the vendors who make the products it sells, like Apple and Samsung, have kept churning out expensive blockbuster gadgets.

“They’re at the mercy of the product cycles,” said Stephen Baker, a tech industry analyst at NPD Group. “If people stop buying PCs or they don’t care about big-screen TVs anymore, they have a challenge.”

Mr. Joly knows that despite Best Buy’s recent momentum, it’s not out of the woods yet. To succeed over the long term, it will need to do more than cut costs and match prices. Walmart, another big-box behemoth, is investing billions of dollars in a digital expansion with the acquisition of e-commerce companies like Jet and Bonobos, and could prove to be a fierce rival. Amazon has been expanding into brick-and-mortar retail with its acquisition of Whole Foods, and is moving into Best Buy’s home installation and services market....
“Once you’ve had a near-death experience,” he said, “arrogance, if you had it in your bones, has disappeared forever.”
Amazon  Best_Buy  big-box  CEOs  turnarounds  pilot_programs  nationwide  contra-Amazon  brands  kiosks  cost-cutting  luck  Wal-Mart  Jet  Bonobos  pricing  showrooming  price-matching  customer_service  search_engines  in-home  BOPIS  Samsung  Apple  Microsoft  store_within_a_store  consumer_electronics  product_cycles  customer_experience 
september 2017 by jerryking
No place for Future Shop as shopping’s future shifts - The Globe and Mail
MARINA STRAUSS - RETAILING REPORTER
The Globe and Mail (includes correction)
Published Sunday, Mar. 29 2015
Marina_Strauss  retailers  e-commerce  consolidation  Future_Shop  Best_Buy  marketing  branding  bricks-and-mortar 
march 2015 by jerryking
Internet’s creative destruction in retail just getting started - The Globe and Mail
ROBERT CYRAN

Published Monday, Apr. 29, 2013
the Web's creative-destructive powers are best seen in the overlay of the Internet on traditional industries. Online sales of shoes, furniture and fashion all made the list of rapidly-growing sectors. E-commerce giants like Amazon and Walmart.com usually offer lower prices than traditional retailers – and convenient home delivery. That's bad news for struggling retailers like Sears, Best Buy and J.C. Penney.

Specialty websites, like Zappos for shoes, also offer a wider selection than can be found in rival DSW's bricks-and-mortar shops. The shoe retailer warned that same-store sales are now falling. And the Web's ability to remove middlemen with high fixed costs means nimble startups can dislodge entrenched players. Warby Parker sells eyeglasses for a fraction of the price of the local optician. That also threatens the $25-billion business Luxottica has built in making and selling high-margin spectacles in its LensCrafters, Pearle Vision and Oliver Peoples shops.

The impact of electronic delivery of digital goods, from books to music to games, has long been evident. And it hasn't been pretty for the incumbents. If this latest survey is on the mark, traditional retailers will soon feel the same pain.
creative_destruction  digital_artifacts  retailers  e-commerce  bricks-and-mortar  Amazon  Warby_Parker  value_destruction  home-delivery  Sears  Best_Buy  department_stores  J.C._Penney  bad_news 
may 2013 by jerryking
Best Buy Details Store Closings - WSJ.com
April 14, 2012 | WSJ | By MIGUEL BUSTILLO.

Best Buy Details Store Closings
Best_Buy  big-box  retailers  consumer_electronics 
may 2012 by jerryking
HOW LESSIONS LEARNED IN CANADA ARE FUELLING A $100-BILLION AMBITION
May 12, 2009 | Globe & Mail | by DAVID EBNER.

http://www.theglobeandmail.com/servlet/story/LAC.20090512.RBESTBUY12ART1933//TPStory/Business

Multiple brands in different businesses are not unusual.

In beverages, Coca-Cola Co. sells an array of products.

In the automobile industry, it's a hallmark of companies such as General Motors Corp. In retail, examples include Hudson's Bay Co., which operates higher-end Bay and lower-end Zellers stores.

In electronics, however, it can be more challenging to differentiate between brands. According to Best Buy Canada president Michael Pratt, the difference is in the details. "Anything that is customer-facing should be a different experience for the consumer," he said, referring to both the look of a store and the products.

In general terms, Best Buy's brand is positioned as a no-hassle electronics retailer, with ready-made packages and wider aisles designed to attract women (who appreciate having room to manoeuvre strollers or keep toddlers in tow, as well as being able to move around in a neat space without bumping into displays). Future Shop, in contrast, is the place for tech geeks.

While both brands sell computers and televisions, the selection isn't the same. More than 50 per cent of the models in various categories offered at Future Shop will be different from Best Buy.
lessons_learned  consumer_electronics  branding  Future_Shop  Best_Buy  big-box  sub-brands  customer-facing  brands  product_portfolios  Canada  Canadian  retailers 
may 2009 by jerryking

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