July 23, 2024
iStock.com/Thomas De Wever
Will Best Buy’s New Initiative Make a Difference?
Best Buy has announced plans to shift its retail strategy from a traditional approach to a newfound focus on technology and customer engagement.
Over the years, Best Buy has marketed itself as a tech authority with knowledgeable salespeople, especially with its team of experts known as the Geek Squad. But now, according to the company, “The role they want us to play in their lives and with technology has evolved. They don’t always need us to be the expert anymore.” Nowadays, shoppers do more research independently and are more familiar with technology.
With its new plan of action, the retailer has decided to concentrate on fostering customer discovery and personalization. In the announcement, the company explained that customers now want Best Buy to “play a bigger role in helping them discover new technology, how it can elevate their lives, and the extraordinary things it can do for them.”
The company’s new tagline, “imagine that,” aims to explore all of the new possibilities of technology, along with an all-new brand aesthetic, including modernized colors.
“We’re embracing this change, and we’re excited about it, because we know it’s where our customers want us to go. This new world of discovery is personal to every customer, their passions and the moments in life that matter most. They want technology to level up their lives — to help them do more of what they love — and there’s no one more passionate and better positioned to do that than Best Buy.”
Jennie Weber, Best Buy’s chief marketing officer, via Best Buy
Additionally, Best Buy will be introducing a new character named “Gram,” who is a futuristic hologram, in its upcoming ads and commercials.
Gram is currently on Best Buy’s YouTube channel as well as various back-to-school ads across multiple media platforms. Gram will help the retailer reinvigorate its YouTube channel, with a promise of offering over 500 new videos in 2024 that feature spotlights on new products, innovators, buying guides, technology tips, and more.
Furthermore, Best Buy’s new “imagine that” strategy includes a more personalized customer experience.
The Best Buy app now “includes a new personalized home page, a Discover tab where customers can explore new tech, a Shop with Videos experience with personalized video content, personalized push notifications, a new Digital Wallet payment and rewards experience and much more.” Customers can also opt to get personalized notifications, ensuring they don’t miss out when a product they’ve been watching goes on sale or when their exclusive member deals become available.
Another change is in the stores themselves. Best Buy’s locations are being transformed by adding more experiential spaces to showcase the latest technology from major brands.
Additionally, partnerships with CNET and Google Cloud aim to integrate expert advice with AI-powered assistants and enhance tech support capabilities, aligning with the company’s commitment to empowering customers through technology discovery and support.
Best Buy’s Blue Shirts and Geek Squad Agents are also being upgraded to feature at least 30,000 expert employees, separated into various specialties such as computers, home theater, and appliances — areas where customers have specifically requested support.
Back in April, the company also announced a combined effort with Google Cloud and Accenture. This move aims to improve customer and employee experiences with generative AI. As a result, AI will be implemented into all of Best Buy’s platforms by the end of summer 2024, helping customers with self-service options for troubleshooting and managing all of their orders and subscriptions. AI tools will also allow customer service agents to analyze interactions and offer accurate recommendations in real time, along with product guides and more.
BrainTrust
Dick Seesel
Principal, Retailing In Focus LLC
Joel Rubinson
President, Rubinson Partners, Inc.
Lisa Goller
B2B Content Strategist
Recent Discussions
Discussion Questions
How might Best Buy’s shift toward technology and customer engagement redefine the role of retail in enhancing consumer lifestyles?
What are the potential implications of Best Buy’s “imagine that” strategy for fostering personalized customer experiences in the retail industry?
In what ways could Best Buy’s integration of generative AI across its platforms improve customer service and operational efficiency, and what challenges might arise from this implementation?
Poll
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There currently isn’t enough innovation and newness in electronics to cajole consumers into upgrading existing products, especially during a time of constrained finances. So Best Buy’s strategy of getting more newness into stores is sensible. Unfortunately, this isn’t down to them, it’s down to the big electronics firms and, here, the innovation pipeline remains weak.
And I don’t buy that the innovations around new AI computers are going to drive a massive replacement cycle. These machines are gimmicky, and few people are going to fork out lots of cash to get an integrated AI chatbot that doesn’t really do much and is similar to those already available online. There needs to be way more advancement in the application of AI to drive purchasing activity.
The one thing I do like about Best Buy’s strategy is focusing more on what technology can do and communicating this better. This may help drive sales of things like health wearables and smart home products.
I agree 100%- the category is a bit tired at the moment. Consumers are less and less likely to pay $1200 to upgrade to the next iPhone when they need an expert to really explain to them what new functionality they’re getting to justify the spend. (spoiler alert: not much)
Yes, very tired. And not helped by a sluggish housing market which is not helpful for stimulating upgrades and new purchases
It is a great time to pivot to innovation from commodity products and traditional support. Every generation of consumer is now much more comfortable with solving tech problems via an internet search or a call to a friend. Providing innovation zones and hands-on emersion in trends will allow them to differentiate from other physical and on -line retailers. they are smart to recognize the wind-down of an era and bold enough to try formulating the next consumer experience..
Best Buy’s new “experience the tech possibilities” direction could be great for older consumers who are late adopters, but the secret sauce of this new direction depends on the tech itself. Our traditional tech innovators, such as Apple and Google, have been slow to fill the pipeline as of late, since some of the latest and greatest failed to launch. Google Glass, anyone?
The challenge, of course, is to remember customers – the “they” referred to, I assume – aren’t a monolith: despite the claim of “evolution” I believe there are still plenty of clueless, unevolved people looking for someone to point them to what to buy; minimize their presence at your peril.
Best Buy’s shift toward technology and customer engagement sounds good, including it’s “imagine that!” However, Best Buy will not be able to make it all happen on their own. Their strategy will be dependent on available new technologies, full cooperation from innovators and manufacturers, and seamless operations. Db
I still remember when I worked in SOHO about 15 years ago how I went to the apple store on PRince street. I did not own anything by Apple and was not going to buy. this was more of a shopper insights mission. It seemed like half of SOHO’s foot traffic was in that store that day at lunch time!. I think Best Buy has to capture that magic of discovery and connection to stay competitive. Otherwise, it’s all about laziness and simplicity and just going to Amazon to get what you need.
Best Buy is counting on the new AI-enabled hardware to spur consumers to upgrade their technology. And while this might be compelling for some consumers, I’m skeptical that it create the buying pressure that Best Buy and the manufacturers expect. Adjusting store personnel roles to focus on engagement and personalization makes sense and won’t hurt, but the question remains: Will consumers respond to the new technology products? Best Buy’s expanded use of generative AI for customer service and operations seems like a smart enough move, but many of these AI tools are still works in progress and so real operational gains may take time to be realized.
Hasn’t Best Buy been involved in technology for a long time? Isn’t this their specialty? So, when they say they are ‘pivoting to technology’, what does this really mean? Is it just a new ad campaign featuring “Gram”? (I did like the spot). Or an intense focus on exceeding customer expectations every time someone comes into the store or wants to chat via e-comm? If it’s the latter where they can wow and create immersible experiences unlike other tech retailers, they have a real strategy with multiple opportunities they can capitalize on, and it will serve them well. If it’s just a re-branding effort with some funny commercials, I don’t think it will move the needle much.
Hey David, I thought that at first as well, but in reality, they have always been a legacy/traditional retailer that just happened to sell consumer electronics without much back-end tech driving their operations or approach to customers.
I am a regular at Best Buy. It seems their new image of themselves is different from mine. When I go to Best Buy, I want answers to my questions, or I want to buy something specific (e.g., a new tablet). When I am looking for answers, I want the answer, not a trip down the technology lane. So far, the BB staff has met my needs.
When I am looking for a new product, I want to know which meets my needs. BB has always been good at that. I don’t want a show; I want an expert. I am not interested in the latest and greatest unless it specifically meets my needs.
Best Buy needs to do something and this something sounds like a good approach. Fact is, we are way past the days when you go into a store to browse, say, movie DVD’s. Ditto for Xbox games…and going in to see the 90 inch flat screen that you cannot afford gets old fast. So more engagement in a compelling format (yet another reason to look at our phones!) sounds like a great idea to me. Integrating all of these technologies will be difficult-that is my prediction-but the various parties listed here will have ample reason to make the rollout seamless.
Best Buy’s culture has embraced innovation and change. They reinvent themselves more frequently than almost any retailer I can think of. In this case I’m a bit lukewarm on how this change will make a difference for them. Consumers’ budgets are severely constrained. Their discretionary income is getting squeezed especially hard. To motivate consumers to keep running on the upgrade treadmill is getting harder and harder. Accentuating the problem is the lack of inspiring innovation from the electronics category. I think this is the right thing to do, but more in the vein of needed upgrades than a game-changing strategy.
The new direction may change the way Best Buy conducts business and interacts with its customers but it is not going to alter ‘retail and how it enhances customer lifestyles. Being a C-E retailer, Best Buy’s approach is by definition different than say, apparel. As to reducing the need for product knowledge and expertise; good luck with that! “Imagine that” will work with most of Best Buy’s clientele but there are customers who will enter a store with little or no ‘imagination’ and will need to start from scratch. The rest of the announced effort will work with a majority of customers.
It’s admirable that Best Buy sees the need to evolve, but its stated goals sound a bit “warm & fuzzy” to me, without clearly stating what the customer experience is going to look like. If the objective is still to convert store visits to sales, then the customer experience needs to focus on selling merchandise, not just exploring new technology. Both things can be true at the same time, and the company’s merchandise, presentation and sales associates need to tackle both goals.
Best Buy deepens its technology leadership by acting like a trusted IT department ready to serve customers’ unique needs. Applying AI and retail media content to anticipate and solve shoppers’ needs will make the customer experience more personalized, relevant and attractive.
Of course the customer still wants Best Buy to be the expert. What a silly statement. And of course more customers are doing more homework before entering a store these days. When they get to the store they want either deeper discovery or confirmation of what they have already learned. Those shoppers disinclined to do any homework just want to show up to the store and get the full download…from the experts. I keep saying that customers want to Explore + Experiment. That’s discovery! That’s why the retailer always has to Execute to that Expectation.
I would have said that Best Buy was always about technology and customer engagement. So this sounds to me more like a marketing update than some big paradigm shift for Best Buy. There’s nothing wrong with a clever marketing update. It’s just that this sounds more evolutionary than revolutionary.
I work in tech and love innovation but I wish more electronic retailers would go back to the basics in their core categories. At the risk of dating myself, I miss appliances that can do their basic functions for longer than a year. It’s clear users are willing to pay a premium for products as long as they last and/or have an affordable warranty plan. I’m curious to know Best Buy’s existing penetration and margins.
Yes, more discovery with wearables or smart home products which might be new categories for many shoppers but I bet many would accept a recurring revenue model for a quality fridge that doesn’t require wifi to work or break down in a couple years.
I like how Best Buy is moving into the future of retail with this new initiative. Customers want to know what they don’t know and want clarity and confidence in making decisions. In addition, they want a personalized experience, knowing whatever they are buying (or considering) is right for them.
I’m not very much moved by the Gram character, I’m afraid, and this commercial just seems to make Best Buy customers look silly. What’s the value prop here?
As long as Best Buy stays focused on selling the next new models of the same old product categories, the message seems stale to me, with or without an AI ‘bot. But the company has an opportunity to position itself as a trusted lifestyle enabler and host of a personal tech enthusiast community.
They should take that seriously, because consumer electronics have become quite commoditized and easy to price-shop on line. Margins are skimpy. But a service partner who can help home users fine-tune their home theater, or configure their mobile apps, or set up a gaming system, or de-tangle their MS Office installation has a real value to offer.
Great observations Neil. On the AI computers I think you are spot on. No one has articulated a clear case for why you’d want that local on your machine versus online. Until there is a compelling case, many consumers are going to buy lower priced alternatives.
We’ve spoken to a lot of consumers on our panel about this and most either aren’t aware of new machines with AI or really aren’t inspired by them. And in this kind of economy, people will not buy things for the sake of it.
“Another change is in the stores themselves. Best Buy’s locations are being transformed by adding more experiential spaces to showcase the latest technology from major brands.” This is key, making physical retail channels more immersive and experiential and connecting it to personalization and easy tech is one key to relevance and growth.
Best Buy’s modernization of its retail experience is a brilliant example of a brand identifying and positively reacting to shifts in consumer behaviors. Today’s shoppers seek personalized, immersive experiences across all retail channels. As recently reported by Deloitte, nearly three in four consumers are likelier to buy from a brand that delivers personalized experiences.
Best Buy’s “imagine that” strategy enables consumers to discover products that best fit their lifestyle and personal needs, setting it apart in the highly competitive consumer electronics market. Its investment in generative AI adds the necessary efficiencies to make the program scalable.
Integrating generative AI can streamline customer service and operations by providing instant support and suggestions, but it also lead to issues with data privacy and system reliability.
If Best Buy can handle these challenges, they can likely set a benchmark for blending tech and retail, pushing the industry to offer more personalized and immersive shopping experiences.
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There currently isn’t enough innovation and newness in electronics to cajole consumers into upgrading existing products, especially during a time of constrained finances. So Best Buy’s strategy of getting more newness into stores is sensible. Unfortunately, this isn’t down to them, it’s down to the big electronics firms and, here, the innovation pipeline remains weak.
And I don’t buy that the innovations around new AI computers are going to drive a massive replacement cycle. These machines are gimmicky, and few people are going to fork out lots of cash to get an integrated AI chatbot that doesn’t really do much and is similar to those already available online. There needs to be way more advancement in the application of AI to drive purchasing activity.
The one thing I do like about Best Buy’s strategy is focusing more on what technology can do and communicating this better. This may help drive sales of things like health wearables and smart home products.
I agree 100%- the category is a bit tired at the moment. Consumers are less and less likely to pay $1200 to upgrade to the next iPhone when they need an expert to really explain to them what new functionality they’re getting to justify the spend. (spoiler alert: not much)
Yes, very tired. And not helped by a sluggish housing market which is not helpful for stimulating upgrades and new purchases
It is a great time to pivot to innovation from commodity products and traditional support. Every generation of consumer is now much more comfortable with solving tech problems via an internet search or a call to a friend. Providing innovation zones and hands-on emersion in trends will allow them to differentiate from other physical and on -line retailers. they are smart to recognize the wind-down of an era and bold enough to try formulating the next consumer experience..
Best Buy’s new “experience the tech possibilities” direction could be great for older consumers who are late adopters, but the secret sauce of this new direction depends on the tech itself. Our traditional tech innovators, such as Apple and Google, have been slow to fill the pipeline as of late, since some of the latest and greatest failed to launch. Google Glass, anyone?
The challenge, of course, is to remember customers – the “they” referred to, I assume – aren’t a monolith: despite the claim of “evolution” I believe there are still plenty of clueless, unevolved people looking for someone to point them to what to buy; minimize their presence at your peril.
Best Buy’s shift toward technology and customer engagement sounds good, including it’s “imagine that!” However, Best Buy will not be able to make it all happen on their own. Their strategy will be dependent on available new technologies, full cooperation from innovators and manufacturers, and seamless operations. Db
I still remember when I worked in SOHO about 15 years ago how I went to the apple store on PRince street. I did not own anything by Apple and was not going to buy. this was more of a shopper insights mission. It seemed like half of SOHO’s foot traffic was in that store that day at lunch time!. I think Best Buy has to capture that magic of discovery and connection to stay competitive. Otherwise, it’s all about laziness and simplicity and just going to Amazon to get what you need.
Best Buy is counting on the new AI-enabled hardware to spur consumers to upgrade their technology. And while this might be compelling for some consumers, I’m skeptical that it create the buying pressure that Best Buy and the manufacturers expect. Adjusting store personnel roles to focus on engagement and personalization makes sense and won’t hurt, but the question remains: Will consumers respond to the new technology products? Best Buy’s expanded use of generative AI for customer service and operations seems like a smart enough move, but many of these AI tools are still works in progress and so real operational gains may take time to be realized.
Hasn’t Best Buy been involved in technology for a long time? Isn’t this their specialty? So, when they say they are ‘pivoting to technology’, what does this really mean? Is it just a new ad campaign featuring “Gram”? (I did like the spot). Or an intense focus on exceeding customer expectations every time someone comes into the store or wants to chat via e-comm? If it’s the latter where they can wow and create immersible experiences unlike other tech retailers, they have a real strategy with multiple opportunities they can capitalize on, and it will serve them well. If it’s just a re-branding effort with some funny commercials, I don’t think it will move the needle much.
Hey David, I thought that at first as well, but in reality, they have always been a legacy/traditional retailer that just happened to sell consumer electronics without much back-end tech driving their operations or approach to customers.
I am a regular at Best Buy. It seems their new image of themselves is different from mine. When I go to Best Buy, I want answers to my questions, or I want to buy something specific (e.g., a new tablet). When I am looking for answers, I want the answer, not a trip down the technology lane. So far, the BB staff has met my needs.
When I am looking for a new product, I want to know which meets my needs. BB has always been good at that. I don’t want a show; I want an expert. I am not interested in the latest and greatest unless it specifically meets my needs.
Best Buy needs to do something and this something sounds like a good approach. Fact is, we are way past the days when you go into a store to browse, say, movie DVD’s. Ditto for Xbox games…and going in to see the 90 inch flat screen that you cannot afford gets old fast. So more engagement in a compelling format (yet another reason to look at our phones!) sounds like a great idea to me. Integrating all of these technologies will be difficult-that is my prediction-but the various parties listed here will have ample reason to make the rollout seamless.
Best Buy’s culture has embraced innovation and change. They reinvent themselves more frequently than almost any retailer I can think of. In this case I’m a bit lukewarm on how this change will make a difference for them. Consumers’ budgets are severely constrained. Their discretionary income is getting squeezed especially hard. To motivate consumers to keep running on the upgrade treadmill is getting harder and harder. Accentuating the problem is the lack of inspiring innovation from the electronics category. I think this is the right thing to do, but more in the vein of needed upgrades than a game-changing strategy.
The new direction may change the way Best Buy conducts business and interacts with its customers but it is not going to alter ‘retail and how it enhances customer lifestyles. Being a C-E retailer, Best Buy’s approach is by definition different than say, apparel. As to reducing the need for product knowledge and expertise; good luck with that! “Imagine that” will work with most of Best Buy’s clientele but there are customers who will enter a store with little or no ‘imagination’ and will need to start from scratch. The rest of the announced effort will work with a majority of customers.
It’s admirable that Best Buy sees the need to evolve, but its stated goals sound a bit “warm & fuzzy” to me, without clearly stating what the customer experience is going to look like. If the objective is still to convert store visits to sales, then the customer experience needs to focus on selling merchandise, not just exploring new technology. Both things can be true at the same time, and the company’s merchandise, presentation and sales associates need to tackle both goals.
Best Buy deepens its technology leadership by acting like a trusted IT department ready to serve customers’ unique needs. Applying AI and retail media content to anticipate and solve shoppers’ needs will make the customer experience more personalized, relevant and attractive.
Of course the customer still wants Best Buy to be the expert. What a silly statement. And of course more customers are doing more homework before entering a store these days. When they get to the store they want either deeper discovery or confirmation of what they have already learned. Those shoppers disinclined to do any homework just want to show up to the store and get the full download…from the experts. I keep saying that customers want to Explore + Experiment. That’s discovery! That’s why the retailer always has to Execute to that Expectation.
I would have said that Best Buy was always about technology and customer engagement. So this sounds to me more like a marketing update than some big paradigm shift for Best Buy. There’s nothing wrong with a clever marketing update. It’s just that this sounds more evolutionary than revolutionary.
I work in tech and love innovation but I wish more electronic retailers would go back to the basics in their core categories. At the risk of dating myself, I miss appliances that can do their basic functions for longer than a year. It’s clear users are willing to pay a premium for products as long as they last and/or have an affordable warranty plan. I’m curious to know Best Buy’s existing penetration and margins.
Yes, more discovery with wearables or smart home products which might be new categories for many shoppers but I bet many would accept a recurring revenue model for a quality fridge that doesn’t require wifi to work or break down in a couple years.
I like how Best Buy is moving into the future of retail with this new initiative. Customers want to know what they don’t know and want clarity and confidence in making decisions. In addition, they want a personalized experience, knowing whatever they are buying (or considering) is right for them.
I’m not very much moved by the Gram character, I’m afraid, and this commercial just seems to make Best Buy customers look silly. What’s the value prop here?
As long as Best Buy stays focused on selling the next new models of the same old product categories, the message seems stale to me, with or without an AI ‘bot. But the company has an opportunity to position itself as a trusted lifestyle enabler and host of a personal tech enthusiast community.
They should take that seriously, because consumer electronics have become quite commoditized and easy to price-shop on line. Margins are skimpy. But a service partner who can help home users fine-tune their home theater, or configure their mobile apps, or set up a gaming system, or de-tangle their MS Office installation has a real value to offer.
Great observations Neil. On the AI computers I think you are spot on. No one has articulated a clear case for why you’d want that local on your machine versus online. Until there is a compelling case, many consumers are going to buy lower priced alternatives.
We’ve spoken to a lot of consumers on our panel about this and most either aren’t aware of new machines with AI or really aren’t inspired by them. And in this kind of economy, people will not buy things for the sake of it.
“Another change is in the stores themselves. Best Buy’s locations are being transformed by adding more experiential spaces to showcase the latest technology from major brands.” This is key, making physical retail channels more immersive and experiential and connecting it to personalization and easy tech is one key to relevance and growth.
Best Buy’s modernization of its retail experience is a brilliant example of a brand identifying and positively reacting to shifts in consumer behaviors. Today’s shoppers seek personalized, immersive experiences across all retail channels. As recently reported by Deloitte, nearly three in four consumers are likelier to buy from a brand that delivers personalized experiences.
Best Buy’s “imagine that” strategy enables consumers to discover products that best fit their lifestyle and personal needs, setting it apart in the highly competitive consumer electronics market. Its investment in generative AI adds the necessary efficiencies to make the program scalable.
Integrating generative AI can streamline customer service and operations by providing instant support and suggestions, but it also lead to issues with data privacy and system reliability.
If Best Buy can handle these challenges, they can likely set a benchmark for blending tech and retail, pushing the industry to offer more personalized and immersive shopping experiences.