Retail Merchandiser

Our December cover story details Best Buy's customer-focused holiday strategy amid the sinking economy. 

It’s go time for Amy Adoniz. Since September, the general manager of the Best Buy on 62nd and Broadway in Manhattan—one of the chain’s most highly trafficked locations—has been working with her team to implement and execute the store’s holiday strategy. 

In a season where scared consumers are expected to spend less on holiday gifts than they have since Jimmy Carter walked the White House, Adoniz should be anxious. But the GM is cautiously optimistic. That’s because Best Buy’s corporate office empowered all of its general managers to plan and execute holiday strategies that would best suit their store’s particular needs.

“It’s great to work for a company that puts its bet on its employees and allows them to make decisions that will best serve their customers,” Adoniz said. “And that’s what it’s all about, finding solutions for our customers and building relationships with them.”

One example of the philosophy that speaks volumes is in seasonal hiring. Instead of the traditional retail model of the corporate office mandating hiring levels through blanket policies, Best Buy has asked its local managers to calculate their own needs based on factors specific to their customers, employees, and business. Tim Sheehan, Best Buy’s senior VP of customer experience creation, explained the retailer’s philosophy: “Because the needs of each Best Buy location can vary considerably, we rely on our managers who understand their businesses to decide what staff levels they need in order to deliver the best possible customer experiences. By empowering the local teams, we can make smarter and more customer-focused business decisions.” 

Inverted pyramid

Customer-focused business decisions. It’s a term that accurately describes how Best Buy is working to make the most out of what is forecasted to be a gloomy holiday season. And the retailer isn’t just empowering GM’s to help make those decisions, it’s actively listening and responding to its customers as well as its frontline “Blue Shirt” employees.

Nowhere is this inverted pyramid strategy more evident than in Best Buy’s Blue Label series, an exclusive line of products developed directly from Blue Shirt/customer interactions and direct customer feedback. Stroll over to the Computers section at any Best Buy, and you’ll find the first results of the company’s Blue Label efforts.

Through customer focus groups, surveys, and feedback from Blue Shirts, Best Buy learned that shoppers wanted laptops with longer battery life, a thin and lightweight design, illuminated keyboard, larger screen size, and enhanced warranty support. In response, the retailer turned to two of its suppliers, HP and Toshiba, and worked with the manufacturers to create exclusive products.

“We continually look for ways to personalize our PCs, not only from a technology standpoint but also in the product’s style and design,” said Bruce Greenwood, vice president, personal systems group, HP. “We have a long relationship with Best Buy and see pairing their customer feedback and our dedication to research and development as an excellent way to meet notebook users’ needs and wants.”

Jeff Barney, vice president and general manager, digital products division for Toshiba America Information Systems added: “Utilizing Best Buy’s position as a trusted retailer, we were able to pinpoint consumers’ specific desires and develop a unique product to best suit their needs.”

The results of the collaboration are the HP Pavilion dv3510nr and the Toshiba Satellite E105-S1402. Both laptops are less than 1.5 inches thick, weigh less than 5 pounds, feature exclusive exterior design, a backlit keyboard, and come with a two-year warranty at no extra charge. Just what consumers asked for. In addition, the laptops feature 30 days of support from Geek Squad, Best Buy’s team of techs who assist with computer set-up and troubleshooting. And the Blue Label laptops hit the shelves in October, just in time for the holiday shopping season.

“As the leading consumer electronics retailer, Best Buy has millions of interactions with consumers each year,” said Wendy Fritz, the retailer’s senior VP of computing. “We listened to our customers and learned that they wanted more from the feature set on available laptops so we went directly to manufacturers to fix that. Through the Blue Label process, we’re addressing customer pain points in a way that no retailer has done before, and we’re giving manufacturers valuable insight to make products that address customer needs.”

The extra mile

The customer-focused business decision process touches on nearly all aspects of Best Buy’s operations, including how stores look and feel this holiday season. At Amy Adoniz’ store in Manhattan, customer surveys and feedback from Blue Shirts revealed the layout and overall design of the store could be improved to make shopping faster and easier for shoppers.

As a result, Adoniz and her team made popular sections in the store, including Computers, Mobile Phones, and GPS, bigger and more comfortable—something customers can appreciate as the aisles become more crowded during the holidays. And new larger overhead signage makes it easier for customers to locate those sections, navigate the store, and find what they’re looking for.

Customers in Adoniz’ market didn’t just want to be able to find what they were looking for without having to ask, surveys and verbatim feedback also showed they wanted to be able to purchase their products and get them home more quickly and easily. Again, Adoniz and her team responded.

The store upgraded its POS systems to process transactions more smoothly with wireless scanners and faster printers, and when customers purchase an item they’ll have a new option: take it with you or have it delivered.

“Our city customers want to be able to shop during their busy day without having to carry heavy bags to the office or across town,” Adoniz said. “So we introduced same day delivery on in-store purchases. Customers can choose to have any items purchased in the store delivered to their home or office within a two-hour timeframe of their choice. ”

The Manhattan location is just one example of how Best Buy locations across the country are going the extra mile to make customer-focused business decisions this holiday season and beyond. But despite all the hard work, the question remains: With the economy wheezing and consumer confidence at an all-time low, will it be enough? 

Cautious optimism

At this point, it’s not a question of if holiday sales will be disappointing, it’s how low will they go? For Best Buy, there is a silver lining to the gloom. 

According to the NPD Group, movies, electronics, video games, and music make up four of the top 10 categories consumers plan to buy as gifts this season—all categories in Best Buy’s wheelhouse. And according to Deloitte, top specific gifts consumers intend to buy include Nintendo’s Wii gaming system, Apple’s iPod, Sony’s PlayStation, and Microsoft’s Xbox. The top generic gifts include HDTVs, computers/laptops, GPS systems, and digital cameras—again all items Best Buy carries and focuses on.  

That forecast, along with Best Buy’s all-out effort to make customer-focused business decisions, is reason enough for Adoniz to feel this holiday season will be a happy one. “At Best Buy, we’re sending the message to our customers that we hear what they’re saying loud and clear and we’re working hard to make the holiday shopping experience the best it can be.”