So it started an adviser program that allows customers to get free in-home consultations about what product they should buy, and how it should be installed.The service started as a pilot program last year and is now being rolled out nationwide.
So it started an adviser program that allows customers to get free in-home consultations about what product they should buy, and how it should be installed.The service started as a pilot program last year and is now being rolled out nationwide.Joly announced a price-matching guarantee.“Until I match Amazon’s prices, the customers are ours to lose,” Mr. Price-matching costs Best Buy real money, but it also gives customers a reason to stay in the store, and avoids handing business to competitors. Joly also realized that if Best Buy was going to compete with Amazon, which has spent billions building a speedy delivery system and plans to use drones to become even more efficient, it needed to get better at things that robots can’t do well — namely, customer service. Joly visited Best Buy stores near the company’s Minnesota headquarters to ask rank-and-file employees about the struggles they encountered.
The company’s stock price has risen more than 50 percent in the past year. And judging from several other visits I paid to Best Buy stores, the chain appears to have avoided the bleak fate of other big-box retailers. To find out, I called Hubert Joly, Best Buy’s chief executive.
An upbeat Frenchman who spent more than a decade at the consulting firm Mc Kinsey & Company, Mr.
But Best Buy’s rebound has been surprisingly durable.
Revenue figures have beaten Wall Street’s expectations in six of the last seven quarters.
If that warehouse didn’t have the item in stock, the customer was out of luck. Joly realized that with some minor changes, each of Best Buy’s 1,000-plus big-box stores could ship packages to customers, serving as a mini warehouse for its surrounding area.
Now, when a customer orders a product on Best Buy’s website, the item is sent from the location that can deliver it the fastest — a store down the street, perhaps, or a warehouse five states away.Best Buy has “really come through the valley by making investments around the customer experience,” said Peter Keith, a retail analyst with Piper Jaffray. Joly arrived at Best Buy, the company’s online ordering system was completely divorced from its stores.If a customer placed an order on the website, it would ship from a central warehouse.Best Buy also struck deals with large electronics companies like Samsung, Apple and Microsoft to feature their products in branded areas within the store.Now, rather than jamming these companies’ products next to one another on shelves, Best Buy allows them to set up their own dedicated kiosks.Which means that if Samsung wants to show off its newest line of tablets in a big-box electronics store, it has basically one choice.Almost every business turnaround plan includes cutting costs. Joly, Best Buy has used the scalpel as quietly as possible, gradually letting leases expire for unprofitable stores and consolidating its overseas divisions.It’s lucky that several large competitors have gone out of business, shrinking its list of rivals.And it’s lucky that the vendors who make the products it sells, like Apple and Samsung, have kept churning out expensive blockbuster gadgets.“They’re at the mercy of the product cycles,” said Stephen Baker, a tech industry analyst at NPD Group.He trimmed a layer of middle managers in 2014, and reassigned roughly 400 Geek Squad employees within the company.But he has never announced a huge, public round of layoffs, which can crater employee morale and create a sinking-ship vibe.“Taking people out is the last resort,” Mr. “Because you need to capture the hearts and minds of the employees.”Best Buy has also found more creative penny-pinching methods.