Will Best Buy See Big Returns From Overhauling its Stores and Website?
Best Buy needs fixing and, to its management’s credit, that’s what the company is attempting to do. Two recently reported cases in point:
- Best Buy is remaking its personal computer department into Windows stores-within-the-store at 500 of the chain’s locations.
- The consumer electronics chain is overhauling bestbuy.com to integrate with its Rewards Zone loyalty program. Until now, the two have literally been on separate websites.
Under the leadership of CEO Hubert Joly, Best Buy has made a number of changes to become more competitive, attending to both its bottom and top line. On the company’s recent earnings call, Mr. Joly said Best Buy remains focused on its six "Renew Blue" priorities, which consist of: online growth; improving the multi-channel consumer experience; increasing revenues and profits per square foot; reducing cost of goods through supply chain efficiencies; optimizing the chain’s real estate; and reducing its selling, general and administrative expenses.
The latest news from the chain shows a commitment to some of these key initiatives.
The decision to open Windows stores inside of Best Buy locations follows a similar move by the chain with Samsung. It also operates separate Apple areas inside its stores. The initiative includes the addition of more than 1,200 Microsoft-trained Best Buy associates. The concept, Tami Reller, head of marketing for Windows, told Reuters, "offers a large-scale, hands-on customer experience" of her company’s products.
The overhaul of bestbuy.com is critical to the company goal of improving consumers’ experiences across its selling channels. By integrating the Reward Zone loyalty program site with its e-commerce site, Best Buy is hoping that it can get customers to rate products they’ve bought, write reviews and share positive buzz on their experiences by offering them points used to discount future purchases.
"Best Buy has a huge customer database they haven’t harnessed," David Strasser, a retail analyst with Janney Capital Management, told the Star Tribune.
Rewards Zone has 40 million members and integrating it with Best Buy’s mobile and websites "could be potentially enormous," Mr. Strasser said.
- Best Buy’s CEO Discusses Q1 2014 Results (Earnings Call Transcript) – Seeking Alpha
- Best Buy to merge Rewards Zone with bestbuy.com – Star Tribune
- Microsoft to open Windows stores within Best Buy – Reuters
What do you think of the most recent moves made by Best Buy? Does Hubert Joly have the chain on the right track overall?