Best Buy Accelerates Store Conversions
Best Buy will adopt its “customer-centric” model in 150 to 200 more stores this year, with plans to convert all 700-plus stores by 2008.
Customer-centric stores each tailor merchandise and marketing to two of Best Buy’s five key customer groups: affluent older men; family men; early-adopter young men; soccer moms; and small-business owners. Each store pinpoints its two biggest audiences, based on local demographics.
Best Buy has already adopted customer-centricity in 85 stores (mostly in California); meanwhile, marketing zeroes in on the chain’s most loyal—and profitable—customers (April PROMO). Between conversions and new-store openings, Best Buy will have 250 to 300 customer-centric stores by yearend. Meanwhile, all traditionally formatted stores will get customer-centric training in the new customer service model, the new model for managing employees, and a deeper understanding of the customer segment (or segments) on which the store will be focusing.
Customer-centric stores reported that same-store sales rose 8.4%, far better than the average 2.3% gain in traditional stores, per Best Buy CEO Brad Anderson.
“Customer centricity empowers employees to recognize unique sets of customers and to build offerings and experiences that meet their needs,” Anderson said in a statement. “Our employees also like this model because it gives them more power to make decisions about how to satisfy their customers. Over time, we believe that our customer centricity work will help us attract new customer segments to our stores, which leverages our existing assets. In addition, it gives us an engine for continuing to innovate and respond to changing customer needs.”
Separately, Richfield, MN-based Best Buy will expand its Geek Squad computer services, nearly doubling its staff this year (to 12,000 technicians from 7,000) and adding services for small-business customers (network installations, server installations and server maintenance services). Best Buy bought Geek Squad in 2000; technicians service customers’ computers in-store and via house calls.
Geek Squad is “a uniquely trusted resource for driving high-margin service revenues,” said Goldman Sachs analyst Matthew Fassler. “As home entertainment networks become more commonplace, Geek Squad can become an increasingly valuable resource.”
