Renderings: Best Buy
Best Buy offers a new way to shop with its first-ever digital-first small box store
Best Buy is today opening a new digital-first, small box store concept that it believes will change the way consumers shop for the products it sells.
The new 5,000-square-foot store, located in Monroe, NC, features a curated selection of “best-on-category products” in audio and home theater, cameras, cellphones, computing, small appliances, smart home tech and wearables.
Shoppers entering the store are greeted by a seven-foot digital display that will explain how to shop.
Most of the products on display in the store are there just for that — display. Shoppers can test how a product works and, if they decide to buy, simply scan the QR code on the item’s price tag. An order is then sent to the store’s Blue Shirts who pick it up in the backroom and bring it to the register for the purchase to be completed.
The store also features some grab-and-go items such as cell phone cases, charging cables and gift cards. Customers with the Best Buy app can scan an item’s barcode and use mobile self-checkout to make a purchase.
The traditional Best Buy customer experience is often defined by the experience of working with the chain’s Blue Shirt associates to get questions answered. Customers in the new store will have that option or they can shop live with an expert from Best Buy’s virtual store. This can be done via call, text chat or video chat while shopping in the store.
Best Buy CEO Corie Barry, last August, announced that the retailer was piloting a virtual store in the lead-up to the 2021 Christmas selling season.
“We are building out a physical store in one of our distribution centers that will have merchandising and products and will be staffed by dedicated associates, including vendor-provided expert labor, but it will have no physical customers,” Ms. Barry said at the time. “Instead, customers can interact with our experts via chat, audio, video and screen sharing depending on their preference and be able to see live demos, displays and physical products.”
Best Buy has been testing a variety of store concepts, including outlet stores. The chain earlier this year said it would open four new outlets this summer to its 16 existing locations as it moved toward its goal of doubling the number of outlets by the end of 2023.
Discussion Questions
DISCUSSION QUESTIONS: Do you expect customers to respond favorably to the shopping experience offered in Best Buy’s new small format store in Monroe, NC? How likely is the chain to migrate some of this experience to its bigger box stores?
Poll
Loading …BrainTrust
Liza Amlani
Principal and Founder, Retail Strategy Group
Brian Delp
CEO, New Sega Home
This is a dramatic shift from what a typical Best Buy shopping experience feels like. And while this small store concept will resonate with some shoppers, others may feel put off by the lack of frontline engagement. Also, relying on vendor provided labor makes me concerned that Best Buy will lose some control over the shopper experience.
Many of you won’t recognize this format. Some of us do. It’s the late Service Merchandise model of the ’70s. Had Service Merchandise understood the power of computerization, they would have survived, just like Best Buy has survived. The trick in execution is going to be maintaining an in-stock position and, as in airport luggage carousels; get it to the customer fast! A walk down memory lane….
You just triggered a core memory of the Service Merchandise store we used to go to as kids with our parents in the early ’80s. This is not a new model at all. It’s just a digitized version of the micro fulfillment center.
We tried to tell Service Merchandise how they could improve many of their processes with (then comparatively crude) technology. It would have been like letting a kid loose in a candy store, or a “fertile field of opportunity.” Alas, they didn’t get it. They didn’t do it. They died.
Yes indeed! Another case of retail Darwinism and how Service Merchandise refused to evolve with the changing times.
I was thinking the same thing!
Remembering Best Products back in the day.
A Service Merchandise redo was exactly what came to my mind. I’m hoping that BBY will do a better job of getting the product to customers quickly. Out-of-stocks and lengthy waits won’t be tolerated.
Spot on Bob! That was exactly what I was thinking about as I read the store concept recap. In-stock is key. See my post here … terrible experience over past two weeks.
Ripped directly from Apple stores, I do think the smaller, new concept has tremendous upside for Best Buy. The key measure for success or failure will depend heavily on associate’s expertise, customer service training and problem solving cycle time. If shoppers can walk in/walk out in an expeditious manner with feelings of high satisfaction, then this concept will fly. Otherwise, it will be back to the drawing board for Ms. Barry and her leadership.
This is a positive move and forward-thinking strategy from Best Buy. And this is exactly what retailers should be doing — meeting their customers where and how they want to shop.
Testing a digital-first shopping experience is smart and relevant for a category like electronics, where shoppers may need more guidance in what to select.
We have all been disappointed with trying to find the best headphones or the right iPhone case when buying online — this experience removes the guesswork.
This is the old Service Merchandise model. It’ll be interesting to see if it works in the 21st cenutury.
We surveyed over 2,500 people (US) about 4 years ago on the idea of a showroom store and for CE in particular with spectacular results, so, this is going to work. Point is, if we knew that, BBY had to have known as well, which then begs the question; what took so long? Such an obvious test should’ve been executed, de-bugged and rolled out by now, reducing space (cost), improving fulfillment and making it easier for customers and modern shopping in general. Does not bode well for them to be so far behind, IMO; too focused on short term thinking is the message.
Showrooming isn’t new, but kudos to beta-testing new format that meet the needs of the customer post-pandemic. The customer has more of a digital mindset so perhaps the engagement will elevated because people usually want to walk into a store and be greeted by a person, not a 7′ digital panel.
So, the first new Best Buy store is essentially a Google/Apple/Amazon 4 Star store concept, and the second is a website on steroids where shoppers connect with store associates digitally?
E-commerce customers will love the digital version, provided sales help is quick, smart and efficient, and the retail world will herald the new small store concept as amazing and new. Given the choice to visit a “best in category” location vs a full blown Best Buy store, I am betting most brick and mortar shoppers will choose the latter. Consumers are exhausted; they just want a consistent shopping experience with a generous, in-stock assortment and great service.
Took my 16-year old daughter to a regular Best Buy on a Saturday night a few weeks ago as she wanted to look at and try gaming accessories. Back in the day that would have been a fun night out, looking through videos and music and playing with different console game systems. That’s all but gone now. It was as quiet as a dentist’s waiting room and we were the only customers in line at the checkout. So yes, we might as well collapse the space and make all the inventory same/next day deliverable, because it’s no fun to walk around in a big box anymore.
The BBY shopping experience has been unexciting for 20 years. I used to take both of my children to the store and we would spend half of our time shopping for music and new release videos. Then go over to the high-end component area in the back of the store and turn up the music with hard rock. They might as well down size as the productivity on a per square foot basis has to be killing them. That and the MyBestBuy reward program is weak at best.
The new Best Buy small format store is a new concept for the brand. However, consumers have enjoyed the smaller scaled stores that Apple and other DTC brands have been leading with for years. This showroom-like concept is far from new and has been part of the industry for a decade, well before the digital and mobile accelerations.
This new operating model for Best Buy will resonate with the customers who prefer little to no human interaction. These customers are purpose-driven, have the knowledge they need about their products, and want to view the product and have it fulfilled with minimal friction. The ability to touch and feel the product is a differentiator, especially for personal electronics.
It will be interesting to see how far this scales for Best Buy and how this plays out.
Showrooming brought to life! I see very little downside for the shopper, but wonder if they will find it appealing. It will be interesting to see how people react and I will be watching closely.
Hmmmm… That’s my best response. I’m typically not a big fan of any process that adds friction to a customer transaction, regardless of whether it’s in-store or online. On the surface this seems to add some friction as I have to navigate a process and get a blue shirt to intervene in every transaction. On the other hand, when I shop Best Buy for a big ticket item, I typically look to have a conversation with a blue shirt about options, features etc. In that scenario I want intervention to help me make up my mind. I’m not sure that this process doesn’t do the exact opposite of that.
Down memory lane with Best Products and Service Merchandise, as many other panelists have mentioned. (Maybe those of us at a certain age…) The concept is certainly viable in today’s drive to develop small format stores for more flexible locations, on top of the operating efficiencies involved in the model. Some customers will still look for the full-blown assortments of a Best Buy prototype, but many others will appreciate the work of curation being done for them.
Seems that small format today has two options. A traditional store with reduced sets of goods or a look and order store like this. Target has made the first work. Last I checked, the look and order stores haven’t worked and I’m not surprised. There are so many compromises to the Best Buy experience in what’s described here that I can’t imagine most customers liking the experience.
It’s an ok idea that could have easily launched years ago. However, I still think it’s too early to scale. There aren’t many consumer electronics stores where you can see a large assortment of options “live.” Part of the compelling experience of Best Buy for me is to wander the assortment and look at my options. Doing this in a smaller store will require them to have a pulse on (1) the right curation (2) not too narrow so a shopper thinks their choices are limited.
I wonder if the more interesting experiment here is in the virtual shop-along assistance. Imagine walking through a new TV with a remote agent in Iowa who is lending her expertise from her home. If shoppers warmed to that concept, not only could it help Best Buy, it could help other retailers that need expertise (THD, etc) and overcome the labor hurdle.
This sounds like a similar version of their current stores but with less friction. Any big ticket items at Best Buy already require an associate to go pick them up from lock boxes. Rather than having to track down an employee, the QR code scanning trims that whole process down. Their customers are already used to requesting access to items, just a new method now. This will likely prove much more efficient for all.
Since the Service Merchandise example has already been analyzed at length by my fellow Braintrusters, I’ll just say it was also the first thing I thought of. The second thing I thought of was that Best Buy’s advantage is the non-commissioned, ostensibly objective retail associates walking you through a solution that works best for you. Which is more important to shoppers? I guess we’ll soon know.
There is a lot of commercial space available and BBY can over time shut down the larger format stores and convert to the small store, digitally-engaged format. Save on rent and personnel costs. A much more productive physical store model. Chat is useless. Direct order call center is awful — try it sometime. Inventory is a mess. I tried unsuccessfully to order a new ARRIS modem with voice 3 count em’ 3 times over the past week and each time the order placed with a live representative who told me the product was in stock and one order I paid extra at their suggestion for same day delivery was cancelled by the system. After 3x of failure I ordered from Amazon and got the exact same modem with voice for less. As a Reward Zone loyalty member I wanted to order from Best Buy. Thus, the benefit of having a program. Now I have 3 charges and 3 credits on my VISA card. Satisfying the customer in real-time in these digitally smart stores where inventory will be fulfilled same day is a win — assuming BBY can deliver on the promise. Time will tell.
Yes, the Best Buy small format store concept sounds an awful lot like a digitally enabled catalog showroom, as others here have noted.
My recollection of the old Service Merchandise and Consumers Distributing shopping experience was one of sheer tedium: uninspired product displays, leafing through thick catalogs; filling out order chits; and a great deal of waiting around for a carton to appear at the pickup window. But if you needed a new clock radio or some 14-karat jewelry, it was the place to go.
For another comparison, consider b8ta, the now defunct “retail as a service” chain that sold consumer electronics products from multiple brands in an environment meant to emulate the Apple Store. It shuttered its brick and mortar operations in February, blaming near-zero foot traffic and multiple burglaries.
I sure hope BB’s digitized version is more inspiring than that. App integration holds some promise in this regard. Its “Best” aspect is a small footprint and lower labor cost — great for operational efficiency, but so-so for shopping experience.
***I can’t end this comment without expressing how little I think of the Net Promoter Score as a tool for managers: As I’ve said many times before, “likelihood to recommend” is a summary metric that is incredibly popular with CEOs but which offers zero diagnostic value. Any enterprise that is truly committed to cultivating customer loyalty must commit to look much more deeply into the granular elements of satisfaction and quality for actionable insights.
This has a lot of potential to find success for immersive experiences outside of traditional brick-and-mortar spaces. The process of executing the experience is make or break, but Best Buy has the resources to pivot past obstacles. I think customers are going to be curious about this experience, live shopping is no longer an idea and adoption continues to grow. Best Buy is actively investing in this model and the likelihood of a shift into the bigger stores is high.
One of the more obvious upsides to this test experience is at only 5,000 feet, Best Buy can fit into a much smaller footprint and get closer to neighborhoods. The ease at which you can drive and quickly get access to their top selling products is motivating in and of itself. If you still want something considered a “long tail” product, you’ll have virtual resources available and can receive those easily through next day shipping, etc.
A good testing ground to see what works, what could fit into the larger stores.
What differentiates BBY from online and Walmart is the army of Blue Shirt “experts” to answer questions. It sounds like these small stores will have few Blue Shirts which means interacting with virtual help which you can do at home, so I don’t see this concept attracting more female customers to BBY. Plus BBY discovered 10 years ago that customers do not visit stores to watch digital displays.
We have to give Best Buy credit for holding down the front lines of in-store innovation and putting customer experience first. This new digital-first format reckons to the not-so-long-ago days of mobile-first. It certainly is an evolution in consumer behavior that retailers should want to lean into vs play catch up later. Kudos to Best Buy for not being afraid to lean in.
Best Buy is coming up with an interesting futuristic concept. Replacing in-store assistance with virtual assistance from experts sounds promising. But to determine the viability, we’ll have to wait and observe how well the idea is brought into reality.
Revamping traditional practices and introducing the “Grab and Go” system will certainly make customers’ lives easier. With this, waiting in long queues and following the stringent process-oriented check-outs can be completely eliminated. If implemented rightly, the strategy could deliver favorable results.
Today consumers expect options. Brands must make sure they’re innovating and adopting new practices that ultimately provide customers convenience. It’s critical to remove as much friction for the customer as possible by meeting them where and how they want to shop. Best Buy is setting a good example by thinking about how to make the digital shopping experience a tangible one for consumers.