Best Buy seeks to boost revenue without hard sales tactics

  • Article by: THOMAS LEE , Star Tribune
  • Updated: August 10, 2013 - 3:42 PM

CEO Hubert Joly is hoping that improved service will mean fewer customers walking out of the store empty-handed.

hide

Nicole Marshall, a Best Buy sales consultant in Eden Prairie, right, answered questions about flat-panel televisions for Barb and Larry Groves of Waconia.

Photo: JEFF WHEELER • jeff.wheeler@startribune.com,

CameraStar Tribune photo galleries

Cameraview larger

Hod Irvine recently visited the Best Buy store in Richfield to look for a new camera. The first employee Irvine spoke to referred him to another Blue Shirt, who expertly answered all of Irvine’s questions.

“He was very friendly, very helpful, and, most importantly, very knowledgable,” said Irvine, a 53-year-old Stillwater resident who sells advanced electronics like semiconductors. “People say ‘Best Buy is going away.’ If it goes away, what do you have left? God, I don’t want to shop at Wal-Mart.”

Despite Irvine’s glowing review, he didn’t actually buy a camera, preferring to do more research at other retailers.

Here lies a paradoxical problem for the consumer electronics giant: How can the retailer provide customers with information and a pleasant shopping experience to boost sales while not laying on the aggressive sales pitch that has long been a part of Best Buy’s culture?

In other words, how do you get customers to buy something without pushing them to buy something?

Since joining Best Buy last fall, CEO Hubert Joly has invested considerable cash and time to improving customer service in an effort to boost sluggish sales. Under his tenure, Best Buy has retrained its Blue Shirt workforce and instituted a new system to both measure customer opinion and evaluate and compensate employees. Beyond the store, Best Buy has added resources to its vaunted social media team, which monitors and responds quickly to customers who complain about something on Facebook and Twitter.

By focusing on customer service, the company hopes that knowledge and some tender loving care will produce enough goodwill to convince a customer to eventually pull the trigger. The key word is “eventually.”

“We’re not out there pounding you to buy,” Shawn Score, president of U.S. retail, told the Star Tribune. “We’re out there making sure we answer enough questions that you feel intelligent and confident in your purchase decision.”

Yet Best Buy needs to generate more sales now. In recent years, the company’s cash flow has shrunk as fewer people visit Best Buy stores and many of the ones that do, like Irvine, leave without buying anything. Some analysts have even questioned whether Best Buy has a long-term future.

Back in the day, the retailer could count on a loyal group of customers who would always buy their electronics at a Best Buy, said Carol Spieckerman, president of the retail consulting firm Newmarketbuilders. But given the plethora of competition today, Best Buy is taking a calculated risk by going with a more passive approach, based on friendly service and information, to get customers to make a purchase, Spieckerman said.

“The role of the store is to get the sale before shoppers leave the store,” she said.

Getting customers to buy

A recent survey by Prosper Insights & Analytics asked shoppers whether they would buy something on BestBuy.com after seeing that product in a Best Buy store. Over half of the consumers said they were “neutral” or not likely to do so.

And yet, other signs point to the need for Best Buy to flex its expertise. In 2012, nearly 20 percent of shoppers who visited a Best Buy store wanted to buy something but didn’t, according to the company. Many said they needed more product information, wanted to do more research or had a bad experience with an employee.

“Education is your competitive advantage,” said Laura Kennedy, a senior analyst with Kantar Retail consulting group in Boston. “These are not simple products. They have lost that competitive advantage when their salespeople are not able to inform the customer.”

Hilary Le Bon, a Minneapolis resident, said she would love to shop and support a local retailer.

“But I find every interaction in-store and on the phone with the company to be frustrating and disconnected,” she said. “There’s so much room for improvement.”

Outsourcing service

  • related content

  • Brendan Ireland responded to Twitter comments about Best Buy in the social media workspace at the company’s Richfield headquarters.

  • get related content delivered to your inbox

  • manage my email subscriptions

ADVERTISEMENT

Connect with twitterConnect with facebookConnect with Google+Connect with PinterestConnect with PinterestConnect with RssfeedConnect with email newsletters

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

ADVERTISEMENT

 
Close