Re-inventing the customer support experience at Best Buy

SUMMARY:

Best Buy’s omni-channel thinking takes in online and stores, but also reaches into the home with a pitch for upgraded ideas of customer support.

Taking customer support beyond the store

The imminent onset of Black Friday should mean an uptick in business across all retail sectors, but the consumer electronics market is a particular beneficiary. With the Holidays season now underway, a half-decent discount on a tablet, laptop or cellphone might well be a determining factor for Santa regarding what finds its way into your festive stocking.

Certain the aptly-named-for-the-season Hubert Joly, CEO of Best Buy has every expectation of a boom period immediately ahead:

Technology innovation is fueling demand, and our strategy is resonating with our customers…we are excited about our plans for holiday. Our teams across all functions are ready and keen to take care of our customers online, in our stores or in the customer’s home.

The idea of the importance of the store as part of an omni-channel retail strategy is a theme we’ve returned to a lot this year, but Best Buy’s addition of ‘in the home’ is an additional element that suggests an interesting competitive differentiator.

It’s all part of the mix for Best Buy, argues Joly, and about compensating for changes in the customer demographic and behaviors:

We’re seeing significant shifts in customer behaviors in terms of what they buy online and what they buy in the stores. So clearly, from a traffic standpoint, we’re continuing to see traffic [in store] decline as customers tend to buy online [for] the higher frequency, smaller items, and they tend to focus their trips to the store for more discovery, experiential discovery, interaction with our great Blue Shirts and gravitating to higher-ticket items, more complex solutions in the stores.

So clearly, we’re seeing increase in the basket or the average order value in the stores, also higher conversion rates. In fact, based on the higher proficiency and great engagement of our store associates, but also the fact that customers have done more research before they go to the stores. So you see a significant shift in the performance. But in totality, we’re very excited about how we can help customers online and in how we can do great things for customers in the stores.

2020 thinking

The chain is currently executing against its Best Buy 2020: Building the New Blue strategy, a core objective of which is to “develop deeper and stickier relationships” with customers. Joly cites the plans that the firm has around the Smart Home as a good example of how this works in practice:

The work we’re doing in the smart home space is a great example of how we are expanding what we sell. We plan to build on our leading position in the Smart Home market by continuing to expand our curated assortment, demonstrating new technology solutions in a meaningful way and expanding in the solutions and services part of the market. We believe needs-based demonstrations and experiential merchandising are critical, and we have a unique capability to showcase the products, both online and in store. In this spirit, as we head into holiday, all of our stores have enhanced Smart Home departments.

In addition, 700 stores have new Alexa and Google experiences developed in collaboration with Amazon and Google and 450 stores have a Best Buy Smart Home powered by Vivint home automation and security offering. To complement all of this, we’ve added an incremental 1,500 dedicated Smart Home store employees to make sure that when you come to shop with us, we’ll do a great job identifying what smart home solution would work best for you.

With Alexa and avatars likely to feature on many a list to Santa, that’s a savvy investment of time and resources. It’s also a good example of how to reinvent customer support and take it into the home environment. Joly expands:

We believe that customer support needs are not limited to a specific product. The need now is to have all of their technology working together to improve and simplify their lives as promised. Total Tech Support is a new Geek Squad offering that provides support for all of the customers’ technology, no matter where or when they bought it. This support is available to customers 24/7 via online, in store and phone and includes significant discounts if in-home services are needed.

This is still in pilot mode at just over 200 stores across 10 cities in the US, but is only one element of a wider drive to upgrade customer experience across all channels. Joly says:

Almost all of our customers currently use both the store and the online channel, and they have different expectations on what the channels should do for them depending on their mindset. As an example, customers often use the online channel when they are most certain about their purchase and the store channel when they are less certain.

Going forward, we see continued opportunity in examining how customers use the various channels in their shopping journey and designing and linking experiences across channels. Ultimately, this makes it easier for customers to start their shopping process online and finish it in the store or vice versa. We are notably using this approach to more effectively address customer needs in areas where we have significant growth potential.

Joly cites mobile tech as a case in point:

In mobile, we’re enhancing the online experience to smooth pre-orders and streamline phone choice, allowing customers to do most of the work online before they pick up their phone in store for activation. We’re also improving the in-store experience to make the various carrier pricing options more clear, reducing the time it takes to activate a phone and using text alerts for clarity on the timing of activation.

All of this is going to cost, of course. For the coming fiscal 2018, Best Buy anticipates upping its CapEx by up to $100 million to $800 million, primarily to account for a decision to accelerate spend around e-commerce and supply chain functions. It’s going to be money well spent, argues Joly:

Qualitatively, the direction of Best Buy 2020 is of course around growth, and it’s around deeper, meaningful, stickier customer relationships and over time, building more recurring revenue streams. This is going to be a journey because you have to recognize that Best Buy is a relatively big company. So in order for these numbers to become meaningful, it’s going to take time. But the direction is very exciting, and for me seeing how these new approaches resonate with customers is very encouraging.

My take

Saying all the right things about re-inventing the customer support experience. Others in the tech sector – yes, that’s you I’m looking at O2. And BT, don’t think we can’t see you smirking in the corner there! – could take a leaf out of BestBuy’s books.

Image credit - BestBuy

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