Will a New Head Geek Help Best Buy ‘Renew Blue’?
While much of the press attention on Best Buy has been focused on the company’s store-within-a-store initiative and looking to smooth out the seams that mark its brick and click businesses, very little has been paid to the Geek Squad. The most recent piece of significant news was that Best Buy was pulling out of its test of Geek Squad members at Target stores. The consensus was that Best Buy took the action so it could hold onto one part of its business that made it unique in the marketplace.
Now comes word that Best Buy has hired a former NCR, Lenovo and Dell executive to lead its services unit. Priority number one for Christopher Askew, the aforementioned hire, will be to generate greater profits from the Geek Squad.
Mr. Askew’s hiring, according to a statement by Best Buy CEO Hubert Joly, "Shows the importance of the Geek Squad to our overall Renew Blue transformation. Our more than 20,000 Geek Squad agents represent a unique competitive advantage for Best Buy."
A Star Tribune article maintains that one of Mr. Askew’s priorities will be to make the Geek Squad an IT resource for businesses. His background appears to lend itself more to business operations than the consumer services on which the Geek Squad has so far made its name. While business services may represent an opportunity, there is plenty of competition, primarily from hardware manufacturers, in the space already.
Another line of thinking, written about by The Wall Street Journal, is that Mr. Askew is being brought in to make the Geek Squad work more effectively within Best Buy stores. The retailer’s move to branded shops within its stores also includes a help desk called Solution Center. Like the Apple Store with its Geniuses, Best Buy puts Geek Squad members behind a desk to help consumers with a variety of issues
- New Geek Squad chief may signal Best Buy push into business services – Star Tribune (tiered sub.)
- Best Buy Hires Executive to Revamp Geek Squad – The Wall Street Journal (sub. required)
- Will Best Buy See Big Returns From Overhauling its Stores and Website? – RetailWire
- What Now With Geeks Out at Target? – RetailWire
Discussion Questions
Where do you think the Geek Squad has the best opportunity to drive revenues and profits for Best Buy? Is there value in pursuing the business services market in addition to the Squad’s traditional role serving consumer needs?
Geek Squad will save Best Buy. Mr. Askew is smart to commit fresh attention to services for businesses. The next fresh market to address is training; there are a lot of seniors purchasing iPads that they half-understand how to use.
Kudos.
Many small business owners are their own Geek Squad. They could be a great target market for BB following the example of Sam’s with its dual focus on consumers and small businesses. The real competition for business IT services starts with the mid-sized and up firms. The underlying issues will be whether or not BB’s Geek Squad has the skill sets to handle the problems small business face, and if they can do it at a price point that is attractive to the business owner and still profitable for Geek Squad.
This is an interesting question. How badly do tablet owners need geeks? Not much. And I really do think tablets are the consumer device of the future. So if it’s to work at all, I think it has to be small business oriented
The Geek Squad will get the best return working with the consumers, while working a plan to be a small business resource. This is the future to significantly growing the business.
There is a huge difference in the service needs and capabilities between the Geek Squad and a truly full service Information Technology support company. I doubt if many Geeks are capable of massaging a blade server or troubleshooting a VM network server running over WINDOWS anything and LINUX.
Cleaning drives, removing bugs, updating software and selling small add-on hardware to the user-only crowd is their call to task for the foreseeable future. The issues with this crowd as we look at the small business side is attrition and pricing threshold. Remote diagnostics and bringing in updates can solve the cost issues to an extent, but the real problem isn’t with this aspect of their market, attrition is. Finding and keeping new customers was the store’s job. This is a problem for the stores, due to lower customer volumes.
More importantly, the walk in customers are relatively IT savvy and there to buy just what they need for their own repairs. Best Buy would be smart to package and sell a support contract with a lot of market needs content. Putting this package into the market on eBay, Amazon, and others will help to drive the need for new customers. As stated, new customers are the key here and a Geek driving sales just might crash this market system for good. I am sure it will be fun to watch what happens here.
I’m struggling to see the value of Geek Squad or their relevance for a retail chain. the business services market is a very specialized field and the consumer market usually disposes of their electronics versus repair. The name is awkward and I have to be constantly be told the Geek Squad has value…sorry, I just don’t see it or believe it.
Let’s not just limit the services of the Geek squad to break-fix work on computers and other such devices. Maybe we can add, in-home installations of speaker systems, conversion to wireless, roundtable teaching sessions in-store, and other how-tos.
With Askew on board and tasked with services, there are many service possibilities that could be placed under the umbrella of the Geek Squad. A Business service branch for small businesses could easily fit in too.
I’m just anxious to see what he comes up with.
IT services to all business segments is a pretty crowded field. Retail locations may give BBY an advantage; as far as top-of-mind for the consumer…may translate to small biz. As far as consumer devices, the interaction between devices (I hesitate to call it integration) is getting easier, but I am sure as the next gen of tablet to TV devices are rolled out, there will a market for service assistance. The rest of the devices seem to be getting very easy to use, so there many not be a long-term services revenue stream there.
I do admire the company as it’s trying lots of tweaks to its business model to find their niche.
The best way for the Geek Squad to help BBY is through an outright sale. BBY needs to redo their model, change their position in the market, and the Geek squad is the most valuable part of their organization to generate quick revenues and get this done.
They have to consider spinning off Geek Squad to unleash its full potential.
Secondly, Geek Squad has to change its culture to serve customers. My experience is, you meet with someone empathetic with your plight who then provides a date akin to a department store tailor who measures you and never touches your suit again. Consumers, not unlike businesspeople, need fast service. I would model Geek Squad after a medical walk-in emergency center rather than a drapery store where everything has to be special ordered. Another idea is to act like a luxury car dealer where you get a loaner so that you’re never ‘out of business’ or (in this situation)’out of contact.’
Whatever the case—stop acting like you’re Best Buy. Reinvent the space!
Yes, absolutely, but Best Buy will need to test many offerings to get it right (both for consumer and small business, which are quickly growing further apart).
On the consumer side: It obviously isn’t just about computers, as the migration to tablets has changed the game there. But tablets also create huge opportunities—I ought to be able to use them to control my whole house (information, entertainment, HVAC, etc.), but I don’t know all of the options and which will work better for me. I also don’t know how to put the whole ecosystem together with the right infrastructure (do I need a better WiFi system, how big a pipe into the house, etc?). I think many mid-to-upper income middle-age or older homeowners—and that’s most homeowners—would potentially pay for that.
I have always thought the Geek Squad was a great asset for Best Buy as technology continually changes and integration becomes such a hassle. I think the challenge is really taking the perspective of their customers, whether they are residential or business customers.
The Geek Squad charges a $99 setup fee to get started on their support plan, but I don’t know how much effort goes into understanding the customer’s overall technology position. It would be great if they used this time to do a “technology inventory” of each new customer so they have a full understanding of their existing environment. I understand that from an efficiency perspective, the Geek Squad may want to make all their customers the same, but I think that is one reason consumers avoid the Geek Squad. The GS needs to support whatever environment they encounter.
One of the big challenges is supporting various generations of hardware, networking, and software. One big value message from the Geek Squad could be “get the best from what you already own.” Of course that doesn’t increase the sales line, but it does reassure that a new purchase will not require them to replace everything they already own.
Ultimately the technology will become self sustaining and rolling in a new device will be like plugging in the toaster. That will be the day.
I like the focus on Geek Squad. The opportunity for this group to drive profits is big. The key will be teaching them to not only service the needs of customers, but also to consult with customers on possible ad-ons or upgrades. RadioShack and Sears used to be the masters at this. They would provide expert help and then up-sell the customer on an item they were not thinking about, but needed. Both of these retailers have lost their edge, but Best Buy and Geek Squad have a real opportunity in the space.
What Best Buy needs to be most concerned about is Staples’ aggressive approach into the support space with easyTech. Staples has become a master at delivering services including tech, shipping and Copy/print services.
I think testing Geek Squad support for business (especially small businesses) would be interesting. Their brand is strong and they are known for their quality (top geeks) so it could work.
On the profit side it is easy to conclude that Best Buy makes more money setting up a CE device than selling one—service is where the money is.
The shift in services for the average consumer has gone from fixing my PC to helping me connect and effectively use all my devices. That’s where the Geek Squad can help the consumer and make the most impact.
It will be interesting to see if the Geeks can migrate from the consumer to the small business side for services. That is a large and untapped profit pool.