Monday, February 04, 2013
How To: Save Best Buy (@BestBuy)
Since I'm in the process of reading "Start with Why," it seems easy to suggest that Best Buy lost its why. Originally founded as a music store, eventually expending into electronic and musical instruments and lately toying with electric motorbikes, it may be time for its next bold move. Here are five themes to consider.
Help People with the Paradox of Choice
Offering so many different choices, Best Buy actually drove people to the internet for research. Mobile allowed them to do it while they were in the stores. It was only a matter of time before it was only logical to move from researching to buying online.
Reduce the number of choices in order to help customers more quickly find what they need. It will help employees to be more informed about the products being sold.
Embrace the internet. If people are going to showroom and then buy online, might as well make sure they buy on BestBuy.com. Promote in-store pickup as well as same-day delivery using the Geek Squad and some of the space freed up by reducing the number of distinct items sold in-store. Install kiosks all over the store to offer an expanded product line and to allow customers to do more research.
Go Where the People Are
One of our local malls features a Best Buy Mobile store that seems to be doing really well. Allows you to compare phones and plans across cellular providers and seems to be doing well as a really popular concept. Now that televisions are all flat and hang on the walls, it would be easy to create a Best Buy Entertainment store that has a TVs mounted on the wall on movable panels, and a comfortable couch and markings on the floor. You can come in (or make a reservation) to figure out what TV (or projector) is best for you. Bring your measurements and they'll move the couch to match so you can see what size screen works best for your room. A few end tables and lamps, decent wall treatment and flooring and it will feel like a medium room. That will make people be able to imagine their own home, or buy a device to match the aspirations of the medium room they don't yet have. After you've made your purchase, you head home and hope you get there before the Geek Squad who's on their way to install it.
Also, perhaps a few acquisitions would put Best Buy in more people's line of vision...
Tine for the Next Expansion?
Originally, Best Buy was a music store, even the name didn't come until later (after a tornado). In time they added more technology and home appliances, but now they end up competing with a number of other companies but not at scale -- do too many things and it's hard to do one thing well. Maybe it's time to move beyond technology and become a household retailer. The brand is still valuable and the name is great in its ambiguity.
Consider purchasing Radio Shack, Game Stop and Sears/KMart. This will give additional mall and non-mall presence, brand extension, new lines of private label items to sell (or competition to eliminate) and small verticals for video games and hobby electronics the same way Best Buy Mobile seems to be working. (Though according to Wikipedia, Sears Holding is looking for some other take-over purchases. It doesn't list Best Buy as one of the theorized choices, but I think it's something to be aware of.)
Brand Expansion ideas: Best Buy Hobby Electronics (Radio Shack), Best Buy Home (Sears), Best Buy Express (KMart), Best Buy Gaming (Game Stop). With Geek Squad geeks everywhere you look.
Many, Many Private Labels: Dynex, Init, Insignia, Craftsman, Kenmore to name just a few. (Sears has a million others, including Allstate and Discover to name a few. Might be a big fish to try to swallow, but to make anything a "Best Buy" is smart and aspiration and affirms the customer even as they consider the purchase.) Might as well pick up Vizio while you're at it.
Recognize the Interconnectedness
As things become more interconnected, rows of products no longer make sense. Is it a phone? A camera? An alarm clock? Re-arrange around lifestyle, such as Home, Home Office, Office-Office, Car, Exercising/Outdoors, Coffee shop, etc.) Build out those environments within the Big Box.
Establish a partnership with a leading car manufacturer who's investing in technology and environmental concerns, like Ford. Cars are shiny, take up floor space (and I'd argue that right now Best Buy has too much floor space) and they're becoming part of our interconnected nature now, too, whether it's using our smart phone as our GPS or plugging your car in when you get home from work.
Home automation is also finally getting close to mainstream. It would be a good time to buy a small home security company and a small automation company. merge them. invest in new products. If there's a "house" environment inside Best Buy, it's a great place to showcase products and integration and sell the ease of self-installation for security systems. (The monthly monitoring also becomes an annuity product.) Also, being able to buy door and window sensors easily locally is much handier than having to go online. Lets the customer build up their security system over time even - they will probably buy more than having them shipped from their security company.
Also, the Big Boxes offer a place for an expanded Smart Phones offering. Smart phones are amazing, but most people don't appreciate the potential of how you can use them. You could have a place to showcase apps and a non-denominational Geek Squad Answer-Desk to help people get the most out of their phones.
Make the Box a Destination Again
I used to enjoy stopping by Best Buy with my young daughter, even if I wasn't planning on making a purchase. I could look at lots of technology and imagine future purchases and she always looked forward those colored circles at the four corners of the main aisle. (She's run around the edge of each circle.) Without the free time to regularly return to the store and be reminded of future purchases I want to make, I'm making fewer purchases.
If the Big Box is now too big, here are some additional ways to make use of the space:
Offer more free and paid training at the store. Make it more obvious. PetCo and PetSmart have their training areas out in the open where other customers can see it. They might get a little bit of the training without paying, but they will also be exposed to the opportunities and come back to get the whole training. There are probably other software and hardware companies that would pay to rent the training space.
Also, get lots of younger people with disposable income coming in. Create some sweet rental rooms for "LAN Parties" - spaces where people can come together and eat junk food and rent XBoxes to play games together with their friends on massive TVs. Sell games and snacks.
Create space for MakerFaire type activities as well as rentable spaces for LAN parties.