Best Buy’s Growth Plans Neglect Customers
July 24, 2008 4 Comments
Mike Vitelli, executive VP of the Best Buy’s customer operating group, outlined this five point plan for the retailer’s growth:
- Continue to benefit from the CE industry’s steady growth of 6 percent over time.
- Open new stores and develop categories where it presently has limited share. These include Apple computers, a relatively recent brand addition; major appliances, which are benefiting from a differentiated assortment and a dedicated sales force with increased training; and mobile phones, which have been reinvigorated by a new business model developed with Carphone Warehouse.
- Introduce new categories, such as musical instruments. While all Best Buy stores carry a smattering of keyboards and guitars, the company is experimenting with extensive, “top-shelf” collections in several locations around the country.
- Develop completely new business models, such as the planned national rollout of Pacific Sales, the company’s West Coast chain of premium appliance stores.
- International growth. Best Buy has already established itself in Canada, China and Europe, and soon plans to open its first stores in Mexico and Turkey.
My take: None of these 5 points focus on customer experience. So I am very concerned about a degradation of Best Buy’s customer experience.
Later in the article it says: “Separately, Vitelli said the company is working hard to engender more personalized service on the store level in order to combine the scale benefits of a national chain with the hands-on attention of an independent dealer.” But if Best Buy does not see customer experience as one of the core components of its growth, then it will under-invest in this critical area. As it says in the 6th law of customer experience: You Can’t Fake It.
In Forrester’s Customer Experience Index, 2007, Best Buy was ranked #34 out of 112 firms — and 23rd out of 27 retailers on the list. So the retailer needs to adopt the 1st principle of Experience-Based Differentiation: Obsess About Customer Needs, Not Product Features.
I’d like to see Best Buy invest in several areas as a core part of its growth strategy: (1) Product training for employees (similar to The Container Store’s commitment to training); (2) Voice Of Employee systems (to capture and attack problems and issues at the front line); (3) Product selection tools (to help customers make product decisions in major categories); and (4) Improved Web-Store cross channel experiences.
The bottom line: Customer experience needs to be a core objective.