by: Jonathan Salem Baskin

Yesterday, I wrote about how I didn't necessarily understand (or believe) Best Buy's plans to expand significantly its private label technology products business, and its hopes that incorporating customer feedback would let it make simple improvements that the big name brands might miss.

I think there's a far bigger, far more radical, and much more likely sustainable opportunity for the company to pursue:

Services.


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What if the standard operating plan for the tech gizmo business is broken beyond repair? Most devices, even the expensive ones, are effectively sold as disposables...the best, most advanced stuff always facing a ticking clock that will someday reveal either 1) a functional failure that is too costly and/or expensive to repair, or 2) a functional improvement, often imperceptible to any human sensory organ, that augurs for a replacement purchase.

It's a pretty crappy business model, if you think about it. Certainly, it's rather hostile to consumers, and more than somewhat manipulative. And it's nothing new: the Detroit automakers fully realized it in the pursuit of planned obsolescence, when the durability and utility of Henry Ford's Model T gave way to models that were build to either fall apart, or fall out of style, every few years.

So what if Best Buy faced this fact, and reconfigured not just its approach to private label brands, but the very conception of its outlets, so that its house brands were really services relationships with its customers?

It would reach far beyond the narrow confines of even the most open social conversation, to utilize:

  • Pricing: Consumers could subscribe to a technology device, like large flat screen TVs, with the understanding that they'd be able to trade-in/upgrade over time. Think about how leasing changed the car business. I'd go one better, and let consumers buy the best technology, which would involve somewhat regular swaps, add-ons, etc.
  • Packaging: Don't you just hate having to buy that extra USB connector to make a gizmo work? Accessories raise the total basket for the retailer, but they help make the retail purchase experience feel like a rip-off. So why not reconfigure the bundles to be all-inclusive? Best Buy could private label all the cable and little widgets (it already has a cable house brand).
  • Store configuration: If consumers were buying a relationship with the store, it would change the layout significantly. Gone would be the endless racks of seemingly identical TV screens, replaced with areas for consumer education, involvement, testing, etc. Best Buy outlets would become showrooms for relationships, really.
  • Support: The Geek Squad would move from being a service afterthought, to something that infused every step of the purchase process: consumers would get installation and configuration, ongoing 24/7 service, and some sort of outstanding, impossible to beat repair/replacement plans.  
  • Community: OK, here's the social media angle: let these happy, involved consumers share their experiences and ideas with one another, as well as with the store. It might yield product ideas, or it might not. Who cares? Participation would help yield happy, paying customers.

There's some tremendous potential for an idea that remade Best Buy into something truly new and sustainably dominant in technology retailing. Proposing to crowdsource minor product improvements gets an "A" for exploiting the gestalt.

But it's just a hint of what's possible.

Original Post: http://dimbulb.typepad.com/my_weblog/2009/05/best-buy-in-the-house-pt-2.html

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