Customer focus: Price, selection and service central to Web plans

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Best buy co. was late to the Net. But by thinking through its strategy to turn bricks-and-mortar overhead into an online asset, the electronics retailer is in a strong position to excel both in retail and e-tail.

Though it's arriving later to the Web than some big-box rivals, Best Buy has used the time to carefully assess core equities, realign its infrastructure and diversify its product mix. It's waited on the sidelines while other retail giants such as Wal-Mart Stores and CompUSA enthusiastically played the Web card, only to have to stop and rethink their operations.


Many industry observers believe Best Buy's focus on achieving a superior customer experience and commitment to snaring talent who believe that established brands will win in the new-media realm make it ideally positioned to be a leader in the clicks-and-mortar revolution.

Best Buy's current site Best Buy Online carries only music. The company is relaunching its online presence in a matter of weeks, carrying every product it stocks in stores and renaming the site The site will incorporate the 350-store chain's best practices in a package to entice consumers no matter where they want to shop: on the Web, in stores or both.

The chain's $100 million post-holiday brand campaign, created in-house, will incorporate key messages about in TV and Web ads, along with the chain's all-important weekly newspaper circulars.


Leveraging a channel-agnostic business model is key to the strategy.

"We'll do a lot of one-to-one marketing. We're not overly focused on where consumers buy," says Barry Judge, VP-marketing, Customer-relationship marketing and database-enhanced targeted promotions are part of the mix.

In addition to carrying its entire inventory online, Best Buy plans to entice Web shoppers with personalized services and convenient pickup and return policies through stores.

"We want (a greater part) of consumers' share of wallet," says Mr. Judge, a veteran of Quaker Oats Co. and Pillsbury Co. "Acquisition costs are so expensive, so you really have to be able to drive more share of that customer."

Retailers such as Best Buy are susceptible to defections, as fickle consumers shop around based on price and, increasingly, customer service experience.

Though lower prices may sometimes be a click away at such price-oriented plays as, Best Buy bets it will win online with a formula of price, expertise, selection and service it's learned at retail.


"You need offers to lock up the best customers," Mr. Judge says. "This isn't the type of business where customers are exclusively yours. There are a lot of switchers."

Best Buy's sales, marketing and merchandising strategies helped drive retail growth and fuel excitement in technology long before the category became hot.

As business models change and merge into hybrid strategies, there's still one constant: "The people who know how to make money selling products are the ones who are going to be successful on the Internet," Mr. Judge says. "We'd like to be dominant online, as we are in the stores."

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