Best Buy Sending ‘Agents’ Into Target Stores

Discussion
Aug 10, 2012
George Anderson

Best Buy sells consumer electronics and so does Target. That would make the two companies competitors, right? Maybe yes and maybe no, depending on whom you ask and when.

It was just over two years ago that we ran a report on this site on how Target, among others, was upping its game with the intention of grabbing share of the consumer electronics market. Heck, the headline read: "Target, Wal-Mart Say ‘Best Buys’ Are at Their Stores."

So, how is it that we now come across a report by The Denver Post that Target is bringing Geek Squad "agents" into its 28 stores in the Denver market?

"What we are looking to do is to really include all of the services that a typical guest could get at any Geek Squad in a Best Buy store," Scott Nygaard, Target’s vice president of electronics, told the Post. "These will be Geek Squad employees that are Geek Squad-trained and have all the same expertise."

Huh?

Okay, I guess we shouldn’t be surprised by this. After all, Target has worked with others that could be considered competitors. RadioShack began managing Target Mobile Centers across the country back in 2010. More recently Target made news when it was revealed the chain was testing Apple Stores within 25 of its stores.

But what about Best Buy? Wasn’t it just last month when management was making a big deal about its Connected concept and the central role that the Geek Squad was going to play in setting it apart from other retailers in the consumer electronics space? Did it mean others in the space with Target as the exception?

Discussion Questions: Does the Target and Geek Squad deal make sense to you? Which retailer, Best Buy or Target, do you think will benefit most should this deal be rolled out nationwide?

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25 Comments on "Best Buy Sending ‘Agents’ Into Target Stores"


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Frank Riso
Guest
8 years 2 months ago

Sure it makes sense. Best Buy gets additional revenue and Target customers get a well known brand of service and support. Nothing different here than technology companies that license their technology to their competitors. It’s a win win for both retailers.

Max Goldberg
Guest
8 years 2 months ago

I get what’s in it for Target, but don’t understand what Best Best hopes to gain. Why would Best Buy cede a distinguishing brand asset to a competitor? It makes no sense. The Geek Squad is an essential point of differentiation between BB and the big box mass merchants. Big mistake on the part of BB, one which could, if rolled out nationwide, significantly hurt their brand.

David Livingston
Guest
8 years 2 months ago

Both of these Minneapolis companies are looking for a win-win solution. When I worked for a couple of grocer wholesalers, we often did real estate consulting for our competitors, for a fee, but only if it was a win win for both of us. Starbucks is in a lot of Safeway and Target stores, ooooh doesn’t that hurt the chain’s coffee sales? Probably makes up for it by bringing in more people. Who knows, maybe this is the beginning of a long-term relationship that will end in marriage.

Ryan Mathews
Guest
8 years 2 months ago

To be honest the, “Can I please borrow a cup of brand,” approach rarely makes sense to me. If Target wanted a Geek Squad-like service they should have created their own.

At best the importation of Geek Squad agents is an homage to Best Buy’s service superiority. At worst the sometimes not-so-pleasant feelings some people have after a Geek Squad experience will be transferred over to Target.

I assume Best Buy comes out ahead on the deal — but not by much since any gains have to be divided by the effect of deleting a proprietary offering.

Dr. Stephen Needel
Guest
8 years 2 months ago

Makes sense to me if I’m Target, with a minor name and weaker price position in the market. If I’m Best Buy, don’t know what they are thinking except that it would only be worse if they teamed with Walmart.

Paula Rosenblum
Guest
8 years 2 months ago

Best Buy is a company at sea. It’s starting to remind me of Blockbuster a couple of years ago. Trolling around for revenue and expense reductions without much of a discernible strategy.

I can see why the founder wants to buy it back.

This is a good deal for Target. For Best Buy, not so much.

Charles P. Walsh
Guest
Charles P. Walsh
8 years 2 months ago

Difficult to say what the benefits are for each without knowing “the rest of the story.”

Is it possible that Target has determined that the best way to grow its consumer electronics is to effectively “lease” this area to Best Buy whose technical, sourcing and buying ability exceeds their own?

Best Buy could effectively make recommendations on the most effective mix given space and customer demographics for Target and with its superior supplier base and technical ability, supply and staff the area to improve sales against competitors like Walmart.

While this is pure speculation on my part, in this dynamic retail environment where you’re competing with brick and mortar, Amazon, Groupon and every other old and new format; if you’re sitting still you’re dead.

Ed Rosenbaum
Guest
8 years 2 months ago

Seems like a win/semi win situation. Target will certainly be the big winner with this. They are promoting the same product probably for less money and giving the customer the benefit of better service. What’s in it for Best Buy, more revenue? What else can it be? This is not going to drive business to Best Buy.

Camille P. Schuster, PhD.
Guest
8 years 2 months ago
Blurring brands will be a problem for Best Buy. Right now the Geek Squad is associated with Best Buy because that is the only retailer through which they can be accessed. Other than the location there is nothing that associates the black and white Geek Squad employees with the “blue shirts.” As a result the Geek Squad could just as easily become associated with Target as Best Buy or as its own company that works with both Best Buy and Target. If Best Buy wants to make the Geek Squad a separate brand and source of revenue, this can work for them. If Best Buy wants to use this strategy as a way to strengthen the Best Buy brand, it will not work. It should work for Target in terms of providing a service that will benefit their consumers. Target is becoming a store that knows how to find and provide services but those services are necessarily their own. It does help their reputation as a service provider, but not as a brand creating the… Read more »
Steve Montgomery
Guest
8 years 2 months ago

This deal doesn’t make sense from Best Buy’s point of view. They have a unique, widely recognized service that is available only at BB’s locations and then decide to allow Target to utilize it to help Target sell more products?

If the test is successful, will Best Buy roll this out to more Target locations and further erode their competitive edge? If it is not successful from Best Buy’s point of view, but is from Target’s, do they expect Target will just forget what they learned from the test? I would expect that if Target views this as successful then they will find a way to offer similar services to their customers perhaps using the same employees that have worked in their stores for the past six months.

Jason Goldberg
Guest
8 years 2 months ago

It feels like a win for Target and a lose for Best Buy.

Target loves to surprise and delight its guests with brands you wouldn’t expect to find in its stores. Geek Squad is a perfect service “brand” for Target. It’s easy to imagine a guest discovering an HDTV on a Target shopping trip, and being “surprised” to learn she can get her questions answered and white-glove installation service scheduled from Geek Squad.

It’s less clear what the win is for Best Buy. Geek Squad is one of the most desirable points of differentiation that Best Buy has at the moment. This is likely to reduce total visits to Best Buy, unless Target and Best Buy have agreed to some more complicated services fulfillment model that we don’t know about yet.

Tony Orlando
Guest
8 years 2 months ago

Best Buy is desperate, in my opinion. You don’t share something unique to your competitor, and end up losing the big sale on the TV to Target. I don’t give up any of my recipes to my catering competitors in my market area, as they are unique to my business.

Hey what do I know, maybe Best Buy can make money where they wouldn’t before, but I don’t get it.

Zel Bianco
Guest
8 years 2 months ago

The Target and Best Buy/Geek Squad retail partnership seems to have the possibility of a good fit. Sure, they both sell electronics, but the Geek Squad does not currently compete with Target in this area and has an established history that should lead to consumer trust, as opposed to Target starting their own version of this model. It seems like retailers are opening up to retail partnerships. Target has already shared space with Apple and J.C. Penney recently announced the addition of Joe Fresh branded shops in 700 stores. Target should certainly benefit from this deal as it could draw more traffic into their locations and additional Geek Squad locations can help Best Buy’s revenue stream.

Gene Detroyer
Guest
8 years 2 months ago

This makes ultimate sense. Geek Squad is a good brand and more exposure can add to its value. Target can offer the service for its customers, without going into the fixit business (which they would only mess up on their own).

This is a simple strategic alliance that many executives reject because of their own hubris, but it makes ultimate strategic sense.

Kai Clarke
Guest
8 years 2 months ago

Target, like any other customer, would be considered a corporate account for BB’s Geek Squad. Corporate focus (their business) is not of importance to the Geek Squad model. The same applies to Target. Their strength lies in retailing, not in establishing, training, maintaining and promoting a separate service organization for electronics. By combining their strenths with BB’s Geek Squad’s strengths, both organizations win. What is their not to like?

Carol Spieckerman
Guest
8 years 2 months ago

This is the latest example of a swing away from brand exclusivity and back toward brand ubiquity (and now, that includes branded services). With the ongoing fragmentation of media and consumer touch points, having a brand in many places is the best way to build equity and to keep it top-of-mind. Hence Apple’s widening distribution and hybrid business models being the rule vs. the exception (wholesale, owned retail, direct-to-consumer). Best Buy isn’t giving up anything. It’s all good.

Warren Thayer
Guest
8 years 2 months ago

Target comes out ahead, and Best Buy is giving away competitive differentiation. But the advantage may not be huge. Geeks at Best Buy are known, at least in my area, for being hard to find in the stores, often with a line of people waiting for them, and sometimes snotty attitudes. The shopper experience with Geeks, IMHO, has not been all that rosy.

Herb Sorensen
Guest
8 years 2 months ago
Putting a different perspective on the whole issue, let’s think about retailers as supply chain managers who operate outlets to consumers, and use that consumer traffic to wring profits from the supply chain. That’s a bit of a stark view, quite accurate for CPG retailing, but maybe not so much for things like consumer electronics. But the point is, retailers are focused on bringing bottom line cash in, and not necessarily caring who provides it. Having suppliers take most of the risks, and just skimming some profits from them is NOT a bad idea. So, think of Best Buy here as a Geek Squad supplier to Target. I don’t know the details of the financial arrangement, but there is no particular reason to rule out this kind of play. In fact, not having a play like this is tantamount to saying retailers should be 100% private label! You think Coke and Walmart are not competitors? Get real. Walmart is a competitor “with benefits,” of Coke. We could say a lot more about this, but my… Read more »
Robert DiPietro
Guest
8 years 2 months ago

It doesn’t make sense for either company. Shouldn’t Best Buy be focused on fixing the store and operating model before diluting resources and brainpower to work on this? Geek Squad was also in FEDEX/KINKOS and that didn’t work.

If I had to pick a winner, it is Target. They learn how to run tech services so they can then build it in house.

David Livingston
Guest
8 years 2 months ago

Why does Aldi love to open stores in Walmart’s parking lot? They both sell groceries. In the end the two companies complement each other. This is just a situation where the two companies can complement each other.

William Passodelis
Guest
8 years 2 months ago

I hope that Target learns how to do this and incorporates that service and I think they will do a MUCH Better job than Best Buy. It will be a nice service to have when Best Buy goes out of business. I am really being mean to Best Buy but really — have you BEEN to A Best Buy recently? I do not routinely buy from the internet and used to rely on Best Buy, but nowadays I head to Walmart and Target first — before going to Best Buy — and go to BB ONLY if necessary. In my personal experience, the experience of being a customer at Best Buy in the last 1-2 years has become MISERABLE. I dread walking through the doors. In the stores I have been in over the last few years — spread out over 3 states — the service was awful and exasperating — uniformly. I will not miss them when they are gone.

Mike Osorio
Guest
Mike Osorio
8 years 2 months ago

Obviously there is more to this story than we are reading here. At least I hope so. It is a huge win for Target and a body blow to Best Buy’s brand. By getting the well thought of Geek Squad associated with their CE branding, Target scores a coup — immediately gaining credibility as a strong service provider in CE. Best Buy, in the meantime, denigrates its brand image by losing the exclusivity of the Geek Squad concept. Maybe this is step one of Best Buy going out of independent locations and becoming a wholly owned Target brand physically residing in Target stores… hmmm… interesting.

Tom Redd
Guest
8 years 2 months ago

This is a win for both shops…it is all about serving the shopper. There will be no clear separation of who it is best for — they both win. Best Buy extends its brand and extends the reach of their new-born Geek team and Target brings a higher level of service to their shopper. Together they do what Amazon cannot do.

Bhavish Mansharamani
Guest
Bhavish Mansharamani
8 years 2 months ago

Win for Target, brand dilution for Best Buy, clearly they are hurting. I wonder what the terms are/length of engagement…wonder if it wouldn’t have just been simpler to have a few HR and an executive conduct tactical recruitment campaign in select areas and build it in-house organically. Quality control would be higher, the example being Ron Johnson and his execution/vision with Apple Stores. I say this because I avoid “Geek Squad” like the plague; they usually are skittish, unaware of new technology, quick fix/enhancements, and boondoggle up-sells leading to irate customers.

Having worked at retailers and at their respective HQs, I find customer engagement to be less than stellar. So much more can and should be done but, requesting assistance from a sub-brand of a parent company that is experiencing turbulence caused by poor management seems silly.

The best would be to conduct Apple-like recruitment, build momentum and excitement about working at a location as this fuels customers and positive word-of-mouth is always certainly constructive.

Christopher P. Ramey
Guest
8 years 2 months ago

Geek Squad will likely be spun off as a separate company. This is simply the beginning of Best Buy’s initiative to do so.

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