By Ashley Gorrie
With the speed at which technology is shaping our lives, what was once considered new at retail is now considered table stakes and fundamental to the shopping experience. It is encouraging to see brick and mortar retailers taking the necessary steps, an offensive position, in the transformation of retail and assert themselves in the new wave of innovation.
One of the traditional retailers who took the leap and started their transformation early was Best Buy. It started with the Renew Blue program in 2012, an introspection of the company’s successes and failures. Best Buy internalized the feedback and learnings gleaned from Renew Blue, then tested and developed a new retail reality and landscape that sought to fill the gaps that were discovered and introduce new measures to appeal to the customer of today and tomorrow.
A transition of this magnitude, however, does not come without some significant infrastructure and supply chain modifications and cultural lobotomy. Every step Best Buy took had to be calculated and analyzed to ensure there was an ROI and consumer benefit for the changes.
Having worked with many consumer electronics brands and seen the impact e-commerce has had on this industry it is refreshing to watch Best Buy’s reinvention. As mentioned above, it did not come without a business case. Best Buy closed non-performing locations, reduced the store footprint, modified its approach to consumerism. All of these tactical steps came at a cost. An investment the company had to make to ensure survival of Best Buy brick and mortar and a house of brands for the future.
In the Canadian marketplace, Best Buy renovated 23 stores to a more connected and interactive model. The Retail Council of Canada reported that the company has embraced an approach where online and brick and mortar are regarded in the same way rather than distinct ‘channels’ that compete with one another. This redesign has brought a 20% higher per-store sales on average. (RCC/NationalPost. Hollie Shaw).
What needed changing:
- Improving customer experience
- Fixing what was broken
- Why? Helping customers pursue their passions and enrich their lives with the help of technology
- Offering newer technologies — Smart Home well curated and demonstrating technology in a meaningful way.
- Services and solutions market
- Superior customer service
- Ease of return for e-commerce
- See and Try
- Points of distribution for online sales, warehouse, faster shipping and fewer stock outs
- Challenge Amazon’s ‘marketplace’
Best Buy 2020: Building the New Blue is a new playbook, and we’ll be watching to see what impact it has on consumers.
It’s hard to believe with the number of doom and gloom articles written today that brick and mortar can survive against Amazon, but survive and thrive Best Buy are. A “4.9% increase to $8.94 billion vs. an estimate $8.66 billion in domestic sales underlines that the company is more than holding its own in the electricals market and should put pay to the oft-repeated fiction that retailers of its ilk will struggle to survive in the era of Amazon,” according to Neil Saunders, managing director of GlobalData Retail.
Customers are telling us what they want and how they want it. Today more than ever they are demanding authenticity and want brands and retailers to acknowledge they are human not a predetermined demographic. Technology is embedded in our lives as a natural extension of making our lives easier, enriched, entertained and efficient.
Retail is no exception.
Ashley Gorrie is CEO of Gorrie Marketing Services. She has been in the retail industry for much of her career, beginning in experiential marketing and finally landing at the family business. Gorrie has led the international growth and development of the company by supporting brands to ensure global consistency with local language and marketing. She completed North Western’s Global Kellogg Schulich EMBA. Having had the benefit of working in many facets of retail, Gorrie is driven to ensure that all retail experiences are educational, entertaining, and inspiring.