Geeks Seek Speedier Repairs and Competitive Edge

Discussion
May 21, 2007

By George Anderson

Best Buy has created a decided advantage with its Geek Squad trouble-shooting and repair service and now the chain is looking to build on that point of difference by turning around computer repairs even more quickly.

The company recently opened a 165,000-square-foot Geek Squad City warehouse outside of Louisville, Kentucky. The facility was built to put it close to UPS’s air hub in the city.

“This is all about giving the customer a better experience,” Michael Rodgers, a spokesperson for Geek Squad City, told The Associated Press.

According to the news service report, the Geek Squad expects to repair more than 2,000 laptops daily at the facility. In total, the geeks are looking to make various fixes to more than 700,000 computers over the course of a year. The average time to repair a computer at the warehouse is three days.

Rob Enderle, an analyst with the Enderle Group research company, told the AP that the Geek Squad repair service can provide a real competitive advantage for Best Buy.

“From a store perspective, I’m not aware of anyone else doing this,” he said.

Samir Bhavnani, a research director with Current Analysis, said look for others to follow suit. “Oftentimes what an industry leader like a Best Buy does is force others people to kind of follow.”

Discussion Questions: Does the combination of the Geek Squad visiting offices and homes and the Geek Squad City repair facility give Best Buy a clear competitive advantage in the personal computer market? Are consumers factoring services such as the Geek Squad, Apple’s Genius Bar and Circuit City’s Firedog in their initial purchasing decisions?

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18 Comments on "Geeks Seek Speedier Repairs and Competitive Edge"


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Rick Moss
Guest
14 years 11 months ago

The timing couldn’t be better for companies ratcheting up their PC customer service capabilities. It was announced late last week that Andrew Cuomo, NY’s Attorney General, is suing Dell over misleading financial and customer service practices. In addition to allegedly luring customers into high interest payment plans, according to Forbes, “the lawsuit … claims that Dell sold onsite computer repair plans but failed to deliver, at times requiring customers to disassemble their own computers.”

Cuomo took action after reviewing around 700 complaints. With consumer indignation running this high and getting this level of media coverage, retailers that tie a strong customer service package to purchases should be in a winning situation.

Kunal Puri
Guest
Kunal Puri
14 years 11 months ago

My 2 Cents…

– The Geek Squad was NOT started by Best Buy but acquired by them. Was this a good move? Seems so as of now.

– Best buy is better off considering Wal-Mart as their competitor along with Circuit City, Comp USA etc. More than differentiation against CC and CU, BB needs to differentiate against Wal-Mart and Geek Squad is definitely in the right direction for that.

Adolfo Rodriguez
Guest
Adolfo Rodriguez
14 years 11 months ago

Ian, what the Geek Squad city does is repair HARDWARE problems. The software problems can actually be taken care of over the phone by Geek Squad Agents by calling 1800Geek Squad.

I fail to see how the company you mentioned will be able to repair a faulty motherboard or a dead HDD over the phone. Better yet, tell me how they repair a faulty modem or a faulty optical drive over the phone.

I understand that most software issues are taken care of over the phone and that for the most part, these are the most common problems for computers, but they have the solution for that.

As far as back up…they have a solution for that too! They have online back up services that will remotely back up your files to an online vault.

Camille P. Schuster, Ph.D.
Guest
14 years 11 months ago

The Geek Squad is an advantage for Best Buy. However, the smart move they are making is taking measures to create efficiency in the repair process. Other companies will take note of the Geek Squad’s success and create their own version. Best Buy needs to stay ahead of the market to keep that competitive advantage and it appears that they are trying to do just that.

Charles P. Walsh
Guest
Charles P. Walsh
14 years 11 months ago

When you are the first to market with a needed product, you are going to achieve some significant benefits. Electronics are still somewhat of an “investment” for many consumers. A company where they can go to learn about and purchase their electronics, obtain home services and speedy repair times adds a lot of weight to their decision on where to purchase.

Best Buy stands to benefit in three principal ways:
In Volume – in Sales and Service
In Perception – in Service and Quality
In Value – reliability, consistency

Best Buy operates in an incredibly competitive marketplace. I believe one of their key strengths that will ensure longevity is their continuous change and willingness to take on risk.

Kai Clarke
Guest
14 years 11 months ago

This is a confusing approach to service. Best Buy’s stores are still very understaffed most of the time. Perhaps most importantly, is BB’s average time to repair a notebook. Why would I have BB fix my notebook in 3 plus days, when I can have the maker of the notebook do this faster (and probably better)? My Dell notebook is repaired on-site within 24 hours. Why would anyone ship their notebook to a distant location and then wait at least 3 days, before they could get it back? Add to this the incredible pricing from the Geek Squad and there are other areas of concern. The Geek Squad is a great idea for running wires in homes or doing immediate product upgrades for new purchases. As soon as BB moves away from this, they are entering an entirely different level of sophistication and customer service that they are clearly not prepared for.

Mark Lilien
Guest
14 years 11 months ago

Anyone whose laptop breaks wants a speedy repair. If the Best Buy Geek central facility can speed the repair cycle (and refrain from destroying everyone’s data in the process) they’ll be heroes. And heroes earn higher margins, which is the great struggle of any name-brand electronics retailer. And it’s easier to maintain consistently high service standards using a central facility compared to hundreds of local locations.

Bernie Slome
Guest
Bernie Slome
14 years 11 months ago

Best Buy sells the same products as several of their competitors. So why does Best Buy sell more, make more and have a better image? They make the customer feel important. Best Buy has stated that the customer experience is important. They not only make the statements, they also deliver on the promise. The Geek Squad, by itself, is not a differentiator. Put the Geek Squad together with everything else Best Buy delivers and it is part of a total differentiator. Delivering speedier repairs, by itself, doesn’t make much of a difference. Again with everything else being offered and delivered, it becomes bigger than it is. Further, it shows that Best Buy doesn’t sit still with the customer experience and service. They are always looking to improve. Once again, they not only say it, but they deliver on it.

Roger Selbert, Ph.D.
Guest
Roger Selbert, Ph.D.
14 years 11 months ago

Providing a better customer experience, and maintaining a competitive business advantage, are two of the top holy grails in retailing. A third is being a seamless multi-channel provider. Any retailer that does these three things will thrive and grow profitably. Meaning that yes, there’s room in this marketplace for both Best Buy and Circuit City. Computers are only going to become more ubiquitous, used universally. I rate both stocks as “buys.”

Dick Seesel
Guest
14 years 11 months ago

Hats off to Best Buy for developing the Geek Squad concept in the first place, and now for taking the next steps to support its growing brand equity with strong logistics. As Rick’s comment points out, individual hardware suppliers like Dell have mostly tarnished reputations for customer service. Geek Squad allows Best Buy to market computers to consumers who have faith in them, regardless of the brand they buy. In a way, this is part of Best Buy’s overall branding objective…making it bigger than the sum of the brands that it sells.

David Biernbaum
Guest
14 years 11 months ago

Does the combination of the Geek Squad visiting offices and homes and the Geek Squad City repair facility give Best Buy a clear competitive advantage in the personal computer market? Absolutely, because the demand for fast repairs at present greatly exceed available supply where speed and convenience are concerned. This is a positive development.

Ian Percy
Guest
14 years 11 months ago
Geeks driving all over town in little black Volkswagen squads is so yesterday. And so is leaving your computer at a store for three or four days while someone does goodness knows what to it as you walk around computerless, twitchy and totally useless as a human being. By far, most computer problems can be fixed remotely and what is even more fun is that you can watch them do it. Companies like MyComputerWorks.com or PlumChoice.com provide as much trouble free computer service as you can get without buying a Mac. I happen to use the former and for a couple hundred bucks a year I get a technician solving my problem usually within minutes. You don’t pay for travel time, you don’t need an appointment, the computer never leaves your desk and it’s the bargain of the century. What is really cool is that these technicians (the guys who’ve called me are located in Arizona) are all working out of their own homes linked by a remarkable phone system that sends the first available… Read more »
Dan Gilmore
Guest
Dan Gilmore
14 years 11 months ago

There is a large and rapidly growing market for electronics service and repair. I am not sure the Geek Squad has fully nailed this yet, but the need for support for home networking/wireless is going to increase dramatically, as more and more homes have multiple PCs, plus the rapidly emerging media centers/I-TV, etc. that will all be on one network. It’s a lot to set up and keep going.

Key is doing it in a way that is fast and affordable to the consumer. We’re not too far away from desktop PCs being disposable equipment. If it breaks, you throw it away–it will cost more to fix than to replace.

If the PC makers were smart, they would design machines, including laptops, that are much more self-servicable than today’s machines.

All that said, I think Best Buy’s moves with Geek Squad are smart. At $47, I think Best Buy is a great long term stock buy right now.

Charlie Moro
Guest
Charlie Moro
14 years 11 months ago

The importance of purchasing a new computer or other gadget for that matter can be somewhat influenced by the services available by these retailers, but the great success for Best Buy has been to bring a truly branded high quality service to the world of “AAA Computer Fix” businesses that have grown up in the market.

With more and more home based businesses (I myself miss the corporate IT department to fix those little glitches that come up from time to time), and with the exponential growth of computers, home entertainment, wireless and so forth, and with the need to have someone who brings a track record of trust and brand inside my home, it has the same affect as buying brand name clothes and food.

Susan Rider
Guest
Susan Rider
14 years 11 months ago

This is absolutely the wave of the future and congrats to Best Buy for great job in branding. But just because they are the first in, they need to hold the position with quality assistance and service. If the only solution every time is to wipe everything off your computer then re-install, the consumer will get wise to that solution. Many experiences surveyed so far show that the quality of the “geek” is much to be desired. Simply using students out of high school who know little more than the average consumer will be the downfall and will give a wiser and more technological substantial competitor the edge. Back to the ABCs, quality and service!

Stephan Kouzomis
Guest
Stephan Kouzomis
14 years 11 months ago

Friendly service, friendly service, and more friendly and competent service will always create a very meaningful point of difference, if not a major competitive advantage.

Do we not think Best Buy is going for thr jugular of Circuit City now? And what a two fold result to gain…quality sales and ongoing consumer loyalty!

Haven’t we learned by now the importance of a ‘complete’ and ongoing interaction with consumers being the bridge to loyalty?!

Hmmmmmmmmmmmm

Ryan Mathews
Guest
14 years 11 months ago

As a consumer who had his (un-backed up of course) totally fried hard drive brought back to life long enough to be downloaded on the 43rd attempt to reboot, I’ve become a Geek Squad partisan. Would it influence my future buying decision? Absolutely!

Odonna Mathews
Guest
Odonna Mathews
14 years 11 months ago

Combining office and home repair visits is key. Consumers often find it hard to keep up with technology and sometimes “give up.” Having someone to contact via a nearby store or website is important.

I agree that adequate training and knowledge of staffers are essential in the long term for customer satisfaction.

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