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Best Buy Should Be Dead, But It's Thriving in the Age of Amazon

MULTIZ321

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Best Buy Should Be Dead, But It's Thriving in the Age of Amazon
By Susan Berfield and Matthew Boyle/ News/ Bloomberg Business Week/ bloomberg.com

"The big-box retailer doesn’t just want to sell you electronics. It wants its in-home consultants to be “personal chief technology officers.”

In Best Buy’s perfect world, all 380 of its new “in-home advisors” would park their clean, white Priuses in front of a customer’s house rather than in the driveway, where the car could block others. They would quickly appraise the neighborhood, survey the landscaping, and see if a security system is in place. After knocking gently on the front door, they would step back and stand to the right, smiling, head down slightly, arms uncrossed, name tag visible on their blue, wrinkle-free Best Buy polo shirts. They would shake hands firmly, avoiding the dead fish or the lobster claw.

Once inside, they would offer to remove their shoes. They wouldn’t lean on the walls or place their Best Buy tablets on the furniture. If they noticed a cat, they would know better than to say they own a dog, and they definitely wouldn’t talk politics. The advisors would make customers comfortable by mimicking their conversational style and pace: If a customer talked with her hands, advisors would, too. They would have a tape measure with a laser, and they wouldn’t tease the cat with it. They wouldn’t knock on walls to determine where a stud was—they would use their stud finders—and they would never put the tool on their chest and say “beep.” That wouldn’t be amusing. “If you’re using that for rapport, start again,” says Bryan Bucknell, a self-proclaimed “longtime sales dude” at Best Buy Co. who’s training recruits for the program. He’s with his aspiring advisors—27 men and 9 women, uniformly enthusiastic in their blue shirts—in a windowless conference room at Best Buy’s headquarters
outside Minneapolis, where they’ve come for the final session of a five-week initiation in late May.

Best Buy’s better-known Geek Squad deploys agents to help customers with repairs and installations. The advisors act as, in Best Buy’s language, personal chief technology officers, helping people make their homes smart or merely more functional. Some in this group worked on the Geek Squad, some as retail staff, a few were lured back to Best Buy, and at least one was employed by companies that Best Buy put out of business. They’ve already learned about the devices and appliances they can offer: TVs, sound systems, refrigerators, washing machines, security cameras, doorbells, garage doors, and smoke alarms, as well as Amazon Echo and Google Home and Apple HomePod, and smart shades and lighting and thermostats.

Now they’re in this conference room practicing how to sell by seeming not to. “Be a consultant, not a salesperson,” Bucknell says. “Use phrases like: ‘How would you like it if,’ ‘Do you think it would help if you could,’ ‘Have you ever thought about.’ ” They’re supposed to establish long-term relationships with their customers rather than chase one-time transactions. They won’t need to anxiously track weekly metrics and, unlike the Geek Squad and blue shirts working in stores, they’ll be paid an annual salary instead of an hourly wage. Their house calls are free and can last as long as 90 minutes.

Best Buy, the last national electronics chain, is counting on these advisors to distinguish it from Amazon.com Inc., the company’s competitor, partner, and would-be vanquisher. With more than 1,000 big-box stores in North America and about 125,000 employees, Best Buy was supposed to have succumbed to the inevitable. “Everyone thought we were going to die,” says Hubert Joly, who was hired as chief executive officer in August 2012 after profits shrunk about 90 percent in one quarter and his predecessor resigned amid an investigation into his relationship with an employee.

Instead, Best Buy has become an improbable survivor led by an unlikely boss. Joly was raised and educated in France, trained at McKinsey & Co., and previously employed by hospitality company Carlson, based outside Minneapolis, and media conglomerate Vivendi SA, where he greenlighted a little game called World of Warcraft. He’s the first outside CEO in the chain’s 52-year history. He had no retail experience—Best Buy’s stock fell 10 percent the day he was named CEO—but Joly understands how to value, and capture, customers’ time. Comparable sales rose 5.6 percent last year and 9 percent during the Christmas season, the biggest holiday gain since 2003. The stock price has quadrupled. Even Amazon CEO Jeff Bezos is impressed. “The last five years, since Hubert came to Best Buy, have been remarkable,” he said at an appearance in April.

Those years were about getting people into Best Buy stores and onto its website; Best Buy’s future will be about getting its people into homes. Joly, who made a surprise visit to talk with the trainees, explains the importance of this strategy: “That lets you have a real conversation. You can talk about what’s possible, be human, make it real.” They’ll encounter
those slogans again throughout headquarters.  “We get 26 percent of our consumers’ electronic spending. That’s embarrassing,” he says. “If we get a third, it would still be embarrassing, but the growth for the company would be tremendous. This is a great way to make a sale, but it’s also the beginning of a beautiful friendship, to quote Casablanca. Does anybody know Casablanca?”....."

1200x-1.jpg

Advisor Jess Kordash making a house call.

Photographer: David Williams for Bloomberg Businessweek


Richard
 
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