How Best Buy Used CX Strategy to Rebound from a Retail Apocalypse
Best Buy's revamped service experience set to position the retailer as a leader in smart home technology
As the country’s last surviving national electronics chain after Circuit City and Radio Shack stores folded, Best Buy rebounded from dire straits by refocusing on the customer. It took hiring a new CEO and two multi-year strategies ('Renew Blue' and 'Best Buy 2020') to get to where it is today and counteract its largest threat: Amazon.
To achieve this, Best Buy capitalized on what it has that Amazon doesn’t: over 1,000 big-box stores across the country staffed by store associates trained to help customers find new and better ways to use technology in their daily lives.
“We all knew that we absolutely had to get closer to the customer; understand, predict and anticipate what the customer wants, and that takes quite a cultural revolution,” Jennie Weber, VP of customer and user experience at Best Buy, said at Advertising Week New York.
Jennie Weber presents at AW New York (Image credit: AWNewYork/Shutterstock)
Rethinking the role of the physical store
The most troubling trend affecting Best Buy and other similar big-box retailers was “showrooming,” where customers would walk into the store to check out new products only to buy them online or at another retailer for less money.
The blow to Best Buy’s bottom line was clear for all to see. Its stock price sank to $12 a share, the lowest in a decade, and the company lost $1.7 billion in Q4 of 2012. Bloomberg Businessweek published a cover story in October on Best Buy’s downfall with an illustration depicting crazed zombies raiding the store.
A year into his tenure, former CEO Hubert Joly introduced a bold price-matching guarantee to discourage customers from leaving the store empty-handed.
“If we learned anything from a retail near-death experience, it was that we wanted to be in the seat of disruption, not be disrupted,” said Weber.
Next, Best Buy struck deals with major tech companies including Samsung, Apple and Microsoft, inviting them to set up their own “branded” kiosks or stores-within-a-store at 1,400 Best Buy locations by June 2013.
(Image credit: Best Buy)
Rather than crowding brands next to each other on shelves, the setup enables brands to customize their space while letting customers more easily browse items from their preferred manufacturer.
Brands essentially pay rent to Best Buy and either send their own salespeople or train Best Buy’s blue shirts, which is cheaper than opening their own stores.
Repositioning the brand as a leader in customer support
More important than these in-store upgrades, however, was buttressing Best Buy’s position as a leader in smart home technology. To do this, the company doubled down on its much-loved Geek Squad, who for years had helped customers install TVs and appliances at home.
Now, they’re called in-home advisors. Blue-shirted, impeccably mannered and traveling in blue-and-white Priuses, they are trained to act as personal chief tech officers to helping people make their homes smart or simply more functional.
(Image credit: Best Buy)
They’re schooled in the subtle art of selling without appearing to by observing the customer’s landscaping, whether or not they currently have a security system installed and their TV-watching habits – and, if appropriate, upsell TVs, sound systems, security cameras, doorbells and so on.
The focus is on being a consultant and building a long-term relationship rather than pushing for a one-off transaction. No job is too small. The team regularly fields requests from customers asking how to use their Amazon Echo – all free of charge.
It all stems from Best Buy’s desire to recast its employees as an “inspiring friend” to their customers.
“We’re there for them to help them figure out what technology is going to work in their lives,” explained Weber. “We’re there to give them a little nudge and tell them they can do it, we can help them figure it out.”
Best Buy is counting on these advisors to distinguish it from Amazon, which has also begun offering appliance repair and installation through Amazon Home Services with vetted contractors, as well as AmazonBasics, a private label offering low-priced commodity electronics.
This ethos of helpfulness is evident in Best Buy’s recent ads, which show blue shirts exchanging high fives with customers and having awkwardly familial conversations with them. One TV spot shows two employees coming to help a middle-aged woman outfit her “mom cave” with a home theater and sitting down to watch football with her.
Changing the company's purpose through culture
All of a sudden, Best Buy’s mission was not to sell boxes but to offer superior customer support. However, missions don’t change overnight, and employee buy-in is crucial for implementing change. Weber said the company created guiding behaviors to orient everyone from in-store employees to in-home advisors to the corporate executives, so they could all work towards providing a unified customer experience.
These guiding behaviors center around three rather ethereal principles: ‘be human,’ ‘make it real’ and ‘think about tomorrow.’ The first one is about putting people first – both internally and externally – while the second principle is about helping customers see what’s possible. The last trope is about anticipating customer’s needs and “how your actions might impact someone down the road.”
The company also designated so-called ‘brand champions’ whose job is to root out systemic pain points and CX policies that run counter to their new customer-centric philosophy. For instance, denying the right to return an item five minutes after the return cut-off.
“[Culture] is imperative if you’re going to do this kind of work, if you’re going to push your teams to be more customer-centered and bring your brand to life,” said Weber. “They’d better believe deep in their core that what you’re doing matters and it’s the right course or it’s just not going to happen.”