marketing

The retail meltdown of 2017 has been well documented, with some reportsestimating 8,600 brick-and-mortar locations will close by the end of the year. At the same time, Amazon is growing exponentially by adding cat- egories, sellers and consumers.

In the age of Amazon, consumer electronics retailers like RadioShack and Cir- cuit City were hit especially hard, and just fi ve years ago, Best Buy looked as if it could be headed for the CE retailer graveyard.

Today, with an emphasis on consumer education, customer experience, and bridging online and in-store buying experiences, Best Buy is holding its own. The linchpin in Best Buy’s stand- out success as the No. 1 CE retailer may be its CEO, turnaround expert Hubert Joly, who joined the company in 2012. Criticized by some for choosing a CEO without consumer electronics or retail background to replace previous chief executive Brian Dunn, Best Buy has fl ourished under his leadership.

Joly’s “Renew Blue” transformation strategy is at the center of Best Buy’s revival. Consistently topping Wall Street ex- pectations, Best Buy has grown earnings per share at an average rate of 9 percent each year. Joly recently announced the next phase of Best Buy’s transformation, called Best Buy 2020, in which it will roll out in-home services, exclusive brand partnerships, and off erings in emerging categories like smart home solutions.

So, what can other retailers take from Best Buy’s playbook to help them compete?

1Don’t be reduced to a showroom: When Joly joined Best Buy in 2012, oneof his fi rst moves was to examine the retailer’s pricing and align it more closely with what consumers might fi nd online so consumers wouldn’t have a reason to shop elsewhere. Many consumers still like the idea they can achieve instant gratifi cation for what they want to buy. This is especially true in many CE categories like games and games systems. Additionally, Best Buy realized that if it created a diff erentiated in-store shopping experience in which product pricing rivaled what customers could get on Amazon, people would purchase in-store.

2 Embrace the omnichannel experience: Best Buy doesn’t view itselfas a brick-and-mortar retailer with an online presence; it sees itself as a multichannel retailer, giving consumers lots of opportunities to re- search, shop and buy the products they want — on their own terms.

Best Buy is a leader in connecting in-store and online experiences by off ering consumers diff erent shopping and purchase combinations, whether it’s in-store or online.

3Invest signifi cantly in employee education: Best Buy has more than 1,000 stores and about 125,000 employees. That’s a lot of people charged with

delivering Best Buy’s brand experience. Under Joly’s leadership, Best Buy focuses on educating and empowering employees to lead discussions with customers about complex consumer technology.

Many consumers need a guide to help them navigate bits, bytes, and mega- hertz; knowledgeable sales associates can help consumers connect the dots be- tween complex consumer tech and how they’ll use it in their homes. In some test markets, Best Buy is taking the notion of the knowledgeable employee to the next level by rolling out an in-home service in which staff ers go to customers’ homes and consult with them on technology deployments and upgrades.

4 Look for partnerships: Best Buy takes advantage of the halo of brandawareness and favorability with a “store within a store” model. Well- known consumer electronic brands like Samsung, Sony, Apple and Micro- soft pay “rent” to Best Buy. This is a unique win-win-win scenario in which Best Buy gets additional revenues from the big brands; brands get an experien- tial showcase for their products within Best Buy stores, and customers get ac- cess to specialized shopping experiences supported by consultative salespeople.

5 Think of your brand as an experience, and walk the talk: Joly comes from a travel background, a category that by defi nition empha-

sizes experience. In a post-Amazon world, retailers must focus on the ex- periences of consumers shopping in their stores and on their websites. In a category in which the products themselves are commodity, a diff erentiated shopping experience from a retailer that aligns with customers’ values and beliefs will win. If you examine the value propositions of both Amazon and Best Buy, it’s at least equal — and in many cases better — for customers to buy from Best Buy. Customers get similar prices and shipping terms, but Best Buy allows customers to pick up or return their online orders in local stores and also receive great aftermarket support.

While Amazon is planning to roll out in-home advisory services to help cus- tomers make sense of complex home technology, Best Buy will likely continue to maintain its experiential edge for years to come.

Deb Gabor is the founder of Sol Marketing, a brand-strategy consultancy focused on building winning brands. Since 2003, Sol Marketing has led brand-strategy en- gagements for such organizations as Dell, Microsoft, NBC Universal, Allrecipes, Cheezburger, HomeAway and RetailMeNot.

www.twice.com August 7, 2017 5

P E R S P E C T I V E

Retail Is Dead! Long Live Retail — At Best Buy, That Is 5 ways the chain is more than holding its own

Executive Insight Deb Gabor, Sol Marketing

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