What Now With Geeks Out at Target?

Discussion
Apr 03, 2013

In case you were wondering, the answer to last month’s RetailWire headline, Are Geeks Out of Place in Target’s CE Departments, was, "Yes."

Less than two months after Best Buy’s Geek Squad members were deployed to Target stores in Kansas City following a successful test in the Denver area, word comes that the plug is being pulled on the program.

It would appear that Best Buy made the decision to terminate the deal based on positive statements about the program made earlier in the year by Target CEO Gregg Steinhafel.

"As part of our ongoing Renew Blue business transformation efforts we have been very clear that we are focused on the company’s core business, including the Geek Squad opportunity with Best Buy’s own customers," Matt Furman, a spokesperson for Best Buy, told the Minneapolis Star Tribune. "We have valued our collaboration with an outstanding Target team, whom we admire and respect as retail leaders and hometown business colleagues."

Based on the apparent success of the Geek Squad test from a Target standpoint, the question is whether the mass merchandiser will seek another partner to offer technical support or if it will look to develop a solution in-house.

"Target is committed to providing our guests with the latest products and tech support services coupled with our exceptional everyday value," the company said in a statement. "We will continue to evaluate opportunities to meet our guests’ needs and deliver on our ‘Expect More. Pay Less’ brand promise."

What do you expect Target to do following the termination of its program with Best Buy’s Geek Squad? What does the end of the program tell you about Best Buy?

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14 Comments on "What Now With Geeks Out at Target?"


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Bob Phibbs
Guest
9 years 2 months ago

Sounds to me like it was too successful, leading BBY to rightly consider what they had given away to another brand. Clearly there was a need at Target, an itch that someone will be tapped to scratch. Not sure anyone in CE would get the same brand ID as the Geek Squad, so it would behoove Target to develop in-house.

Dick Seesel
Guest
9 years 2 months ago

Apparently the program worked well enough for Target, based on its expansion plans, but too well for Best Buy. The current management apparently decided that the best way to leverage a key asset like Geek Squad is within its own four walls, as it struggles to bring new productivity ideas to its overspaced stores. It’s also possible that the two sides couldn’t reach a financial agreement going forward.

There are few other branded “help desk” concepts as strong as Geek Squad, so Target needs to start over with a new partner (“RadioShack at Target”?) or with its own internal CE service program.

Adrian Weidmann
Guest
9 years 2 months ago

It seems as though Best Buy made a deal with Target in their hour of need given the state of Best Buy’s business a year ago. Now they seem to be retracting the deal because they want to use the Geek Squad resource for themselves. Perhaps they should have thought about that before they struck the deal with Target.

Assuming it was indeed successful for Target, Best Buy just spent their money to ‘teach’ Target that Target’s customers value this resource. Nothing like willfully showing your competitor how to compete against you! Provided it was indeed ‘successful’, Target will now pursue developing this resource and service themselves—either in-house or a 3rd-party—further undermining and eroding Best Buy’s value proposition. History will determine if this executive decision becomes another nail in securing the fate of Best Buy.

Steve Montgomery
Guest
9 years 2 months ago

This is a case of “borrowed equity” working out too well. Like the comments above, I believe Best Buy realized that they had rented out something uniquely identified with their brand and then realized the borrower had gotten the better end of the bargain.

Cathy Hotka
Guest
9 years 2 months ago

Let’s take this from a different angle.

Apparently Target’s customers were happy to address their computer issues at a Target store. This should tell Best Buy that a) there’s a big market out there for additional kinds of consumer electronics support and b) they can reinvigorate their own stores by providing it. They should consider providing how-to classes for photography and software, which would provide new relevance and foot traffic. My 85-year-old mother, a proud owner of a new iPad, would take advantage.

Gene Detroyer
Guest
9 years 2 months ago

The end of the program tells me that Best Buy doesn’t appreciate the value the Geek Squad brand equity has. They should take this horse and ride it. It would have a completely different business plan for Geek Squad. They should grow it to every retailer who should know better than to try it themselves.

If Target found this to be a good service for their customers, they should continue the service, but not…not…not…try to do it themselves.

Robert DiPietro
Guest
9 years 2 months ago

No surprise here! Best Buy will keep to its core competency to help drive traffic and sales at its stores, not a competitor. I believe that is the third strike as Geek Squad tried it with Office Depot, FedEx and Target—3 strikes and you’re out.

Target is likely to do nothing—their customers are not looking for tech support at Target. Are customers going to lug their computer all the way thru the store to get it fixed?

Ed Rosenbaum
Guest
9 years 2 months ago

It appears both learned something valuable during this experience. I would venture to say this might be something BBY would consider as a standalone piece of their business and market it as such.

Gordon Arnold
Guest
9 years 2 months ago

This could be a reinvention of the wheel if Target is to succeed. “Expect more, pay less” is not the happy ending that most of consumers and small businesses feel after they experience an IT repair bill. When you add in how little IT support for retail electronic sales experience there is in Target’s management team, a recommendation to pass or farm it out to third party support will quickly follow.

Lee Kent
Guest
9 years 2 months ago

We don’t know that customers were coming to Target because of the Geek Squad, simply that they enjoyed the benefits once there. When Target can answer that question, it will shine some light on their next steps.

As for Best Buy,if they did not find the partnership beneficial, my thinking is that they were not cross and upselling as well as they could. I mentioned in a previous discussion about this that the Geek Squad should look into levels of service offerings. The basic level could surely be offered at partner stores, however, additional services would only be offered at Best Buy.

Craig Sundstrom
Guest
9 years 2 months ago

Hard to decide if this is a good thing for BB (they realize the Geek Squad has brand equity, no longer needs to hunt for pocket change outside their own stores, etc.) or a bad one (still trying to “fix” their core business, don’t know what they’re doing, etc.). I’m sure we’ll hear more in the months ahead. Side item of interest: BB’s $51B in sales is equal to Macy’s, JCP and Nordstrom COMBINED—and almost fully 3/4 of Target itself. This is still a big tree in the retail forest.

Brian Numainville
Guest
9 years 2 months ago

It may be that Target will consider running a program on its own or with a third-party. In the case of a third-party, not sure where they would find an equivalent partner with the kind of brand recognition that Geek Squad brought to the table. On the other hand, is this what shoppers want when they visit Target? How profitable is it? And what percent of shoppers will take advantage of the program?

All questions that I am sure the experience with Best Buy helped Target better understand.

Ed Dunn
Guest
9 years 2 months ago

Target won with Missoni, Danny Choo, the local merchant program and now won with Geek Squad. Target proven they can establish successful synergies and will continue to maximize these type of arrangements in the future.

Best Buy? I don’t know from Fretter’s to the Good Guys to Circuit City…seems like the fate is inevitable.

Alexander Rink
Guest
9 years 2 months ago

I think there is value to a services component being offered alongside core product sales, and thus think that Target is most likely to develop its own, in-house offering now that the Geek Squad is no longer an option for them.

Based on what numerous articles have stated, Best Buy is focused on its Renew Blue strategy, and thus without getting into any further speculation, the end of the program underlines that focus on their part.

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