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jerryking : store_within_a_store   4

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
Mall makeover: A new retail fight heats up - The Globe and Mail
TARA PERKINS AND MARINA STRAUSS Jan. 28 2014,

"I said to him, 'Look, you're missing an amazing opportunity,' " Mr. Sullivan recalls. "'We have a mall [the Eaton Centre] that has 50 million people a year walk through it. We are going to announce that we've got a Nordstrom deal shortly. And you have a great store at the other end, the Bay, which you've done a terrific job re-engineering. Why don't you think about putting a Saks in as part of that?....Dramatic changes in the retail landscape are providing a wake-up call for mall landlords, prompting them to replace tired retailers with new ones and leading Cadillac Fairview to launch a makeover of its Eaton Centre. There has been an influx of savvy foreign retailers, and every mall wants to be the first to attract the next big brand that migrates to Canada....."The ultimate goal is to have the right mix of anchors and small shops such that you maximize traffic, you maximize sales, and everyone wins."
Cadillac_Fairview  shopping_malls  HBC  Saks  Nordstrom  Marina_Strauss  retailers  product_launches  makeovers  anchor_tenants  store_within_a_store  luxury  landlords 
january 2014 by jerryking
Unlikely expansion: When retail brands go wholesale -
Apr. 16 2013 | The Globe and Mail | MARINA STRAUSS - RETAILING REPORTER.

Aldo Group Inc. is on the hunt for retail space – inside the stores of other retailers, as the shoe specialist pursues a cost-conscious expansion in which it is teaming up with a growing roster of indirect rivals.

Merchants ranging from Aldo to fashion purveyor Joe Fresh (owned by grocery giant Loblaw Cos. Ltd.), Reitmans (Canada) Ltd. and Hudson’s Bay Co., have stepped up their partnering efforts, even as they raise the stakes by being tied to sometimes unstable chains....multichannel distribution allows rapid expansion into new markets without the expense or time needed to open new stores....Retailers are trying to cash in on brand awareness and production expertise to reach more customers in a cost-savvy way. But the business model isn’t without drawbacks, as merchants lose some control over the placement, prominence and marketing of their products....For years, in a reverse trend, manufacturers – from Nine West to Apple – have set up their own standalone stores to showcase their products and ensure their brands are not lost among many others within a larger retailer.

“Retailers want to be wholesalers and wholesalers want to be retailers,” Mr. Lichtszral said. “The lines are blurred everywhere … Wholesale distributors are opening their own websites and shipping directly to the consumer and, in doing that, are technically competing with their retail customers.”
growth  retailers  brands  distribution_channels  Aldo  Loblaws  Nine_West  Apple  wholesalers  multichannel  omnichannel  Joe_Fresh  partnerships  Reitmans  HBC  business_models  drawbacks  merchandising  manufacturers  expansions  store_within_a_store  cost-consciousness  Marina_Strauss  standalone  Fortune_500 
may 2013 by jerryking
Looking to Grow, J.C. Penney Tries to Carve New Niches
NOVEMBER 11, 2010 | - WSJ.com | By RACHEL DODES .Looking to
Grow, Penney Tries to Carve New Niches. Since shedding its Eckerd
drugstore division in 2004, Penney has focused on sprucing up its
dept.stores by upgrading merchandise & improving customer svce.. The
company expects most of its growth to come from expanding such
initiatives as Sephora cosmetics boutiques inside its stores and
increasing distn. of its exclusive brands, such as MNG by Mango. But the
company is also betting on retailing ideas developed through its new
Growth Brands Division as a way to build on Penney's sourcing, branding
and logistics expertise. Under pressure to show it can grow,
mass-market J.C. Penney Co. is betting on niches. The retailer, whose
1,100 stores offer a wide range of moderately priced merchandise, is
gearing up for some specialty ventures, including an e-commerce site for
gift givers and a clothing chain for big and tall men,
growth  retailers  J.C._Penney  diversification  Sephora  hedge_funds  niches  store_within_a_store  cosmetics 
november 2010 by jerryking

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