In 2012, Best Buy was on its last leg.
Amidst a scandal involving a CEO and an employee, stores that were hemorrhaging money and outdated systems that were only getting older by the minute while Amazon made huge strides in improving shipping speeds and inventory selection, Hubert Joly took the reigns at the big box electronic store. In the last five years, he’s left no stone unturned and has managed, through careful planning, to turn the entire Best Buy empire around.
Welcome to the New Best Buy
Anyone who hasn’t been into a Best Buy in the last two or three years should take a Saturday afternoon to wander into its closest location. The Best Buy of 2012 that was obsessed with monotonous shelving holding boxes of electronics, minimal displays and haphazardly trained employees has done a complete 180.
Joly’s Best Buy is all about the in-store customer experience. It’s practically the Disneyland of electronics retailers. Joly explained in an interview with the New York Times that the one thing he knew Best Buy could offer that Amazon couldn’t was customer care, so he was determined to maximize the customer experience.
That’s meant deconstructing the old Best Buy, to the footings, and rebuilding it, including such fundamental items as employee training programs, inventory search engine functionality and even supply chain structure. What today’s Best Buy offers is a showroom full of engaged employees ready to help customers with their purchases, no matter how big or small.
The Showcase-and-Ship Model
In the bleeding days, Best Buy suffered badly from showrooming, a phenomenon that occurs when customers visit a store to test a product, then buy it online for less.
It was no secret, so Joly decided he would leverage that oh-so-obvious weakness into a strength. He found other places where he could save money, like improving warehousing practices to reduce loss due to damage, which then enabled him to cut costs to match Amazon.
Then, he started making deals for branded areas in the store dedicated to products from suppliers like Samsung, Apple and Microsoft. Instead of being jammed onto identical shelves, these products are displayed in branded kiosks. For example, the Apple kiosk is a miniature version of an Apple Store, complete with the same sleek wooden tables and minimalist designs.
Now, customers can come in, touch and try out whatever products they’re considering, and take them home the same day. For out of stock items, the supply chain has been revamped to ship a unit from the location that can deliver to the customer fastest to minimize wait time. This is just one example of how the old guard big box store has managed to adapt to the modern consumer.
Its 50 percent stock value increase in the last year may only be the beginning.Google+