best buy the article

best buy the article

The Evolution of Best Buy: From Brick-and-Mortar Retailer to Tech Industry Leader

1. Introduction

This essay will focus on Best Buy’s structure, culture, reward system, leadership drivers, as well as the result of Best Buy’s transformation today. Leadership still remains a strong driver for Best Buy, and much of the firm’s success through their years has been attributed to strategic leaders who have had vision and courage. However, despite the fact that leadership is an important driver for all companies, they cannot all expect to achieve greatness. Core drivers at Best Buy also include structure, culture, and reward systems, though unlike most companies, these drivers undergo total transformation in a short ten years, yet all remain innovative nearly two decades later. The technology industry is one of the fastest changing industries in the world, and as the industry’s largest retailer, Best Buy has had to assimilate or expand its offering to keep the loyalty of its changing customers. This essay will provide a comprehensive examination of Best Buy and its drivers.

A traditional brick-and-mortar retailer spends decades successfully climbing to the top as the largest in their industry, yet they find themselves financially struggling in the face of advancing technology. Their Board of Directors decides to take a chance and make changes to the company’s offering and leadership in order to stay relevant. This particular retailer? Best Buy. Once a chain of electronics stores, Best Buy had topped its industry’s competition before technology turned everything on its head. So they transformed with the industry, expanded services, and brought innovation in-store and online. Now, Best Buy is the first American technology retailer and is expanding into engineering and installing smart homes and, most recently, thousands of electric charging stations across America.

2. The Rise of Best Buy in the Retail Industry

The chain is currently well-known and widely recognized for promoting and supporting the market of modern tech goods and services. Best Buy thrived amongst most of its big-box retail rivals since the introduction of digital electronics and devices, investments that did not make enough difference to reinvent the business, Best Buy tried to improve. The home theatre project’s collapse attracted a lot of attention and set the level for Simple Auto that quickly followed. The business fell and dusted itself down after the fire. Instead of the reopening of Best Buy’s Concept 1 innovations showroom, Best Buy was preparing to release the unpopular warehouse format the following year. Then, Best Buy got about a shutdown spree that signaled the scope of the enormous task ahead of them. Far fewer difficult partners have been on the business’s most dangerous dangerous. Best Buy ultimately shook off the shackles of its biggest flaws.

Best Buy’s relatively modest beginnings as a single rear audio components shop in 1966 have dramatically expanded to one of the biggest sellers of tech products and provider of tech services. Nearly seven decades after its foundation, Best Buy has developed a resilient name for the sale of products such as smartwatches, earbuds, 3D printers, tablets, gaming devices, and more. The chain has also cleared a decent amount of cash by providing technology support, aiming to help consumers with digital learning and growing comfortable with their devices. As technology crossed into the mainstream, including smartphones and wearable fitness trackers, the quantities began to plateau. The business started offering in-home advice for consumers who need support with products such as smart speakers. In 2018, before causing entrepreneurs, the business recruited 3,000 full-time staff in the United States, focusing on technology.

3. Strategic Shifts towards Technology and E-Commerce

Best Buy realized there may actually be money in them there circuits and began the transition from music to VCRs and personal computers. It was an awkward experience for everyone, but the ’80s were a crazy time. Fast-forward almost 30 years, and the environment of retail again has forced Best Buy to make some major shifts. This was almost like coming full circle. Instead of pursuing a tech-focused customer base, Best Buy was built for TV and stereo fanatics. Shortly after Dunn’s fall from grace, the company hired CEO Hubert Joly. Joly led Best Buy into its next era, and he bet big on technology yet again. After two really poor attempts in digital sales, a new company president (and former tech buyer) was charged with righting the ship. No way online sales were about to bail Best Buy out in 2008. However, Best Buy was becoming the pre-purchase research destination for most of middle America. Customers would walk in, pick the salesman’s brain, scan the product information, and walk out empty-handed. They made purchases online, as it was frequently available at more attractive prices. Management was faced with a choice: the company could maintain a stance as an educational destination—focusing on “showroom” floor benefits along with a thin margin—or they could shift to a world where they not only educated the customer, but also made the sale. In 2012, Best Buy made the decision to shift towards a blue-shirt culture. Since then, Best Buy has removed virtually all non-connectivity services staff in place of a more trained, consultative, solutions-based employee. Set to face harsh headwinds, Best Buy took a huge gamble after watching its competition disappear. All of those closed Circuit City locations were for sale, and Best Buy went on a shopping spree. They secured highly visible, bi-right locations with instant recognition. This decision by Best Buy helped the company complete “Project Dolphin,” a wide-sweeping, successful strategy shift.

Best Buy joins other traditional out-of-business brands like Blockbuster and Circuit City in the handbasket down the road to obsolescence. But recently, the wise management team at Best Buy took steps to fundamentally alter the company’s DNA, pulling themselves and the company back from the precipice. Here are some hits from the company’s lineup of successful strategic shifts, including their e-commerce push in the ’90s and the company’s digital makeover in the ’10s. Now Best Buy dominates its industry and the future looks bright.

Best Buy’s Greatest Hits: The Evolution of a Big-Box Retailer

4. Innovative Customer Experience Initiatives

For many years, Best Buy played second fiddle to Amazon’s online retail behemoth. However, over the past two years, Best Buy’s stock has surged nearly 300%, earning it a market capitalization of more than $29 billion and the moniker ‘Amazon’s One-Time Biggest Competitor’. What a difference five years makes. In 2016, Best Buy appeared to be another potential casualty of the Amazon-ification of the global economy. By that year, the stock of the 55-year-old company, once among the largest brick-and-mortar retailers in the world, had slipped more than 40% in just a little more than two years. Investors, for good reason, had lost hope that the company had what it took to compete with the younger, more innovative entrants to the space. Now, as digital ‘challenger’ brands are becoming adept at selling to broader markets, one-time brandless startups are in turn moving beyond monthly subscriptions to introduce products – thereby becoming the retailers themselves. So how can Best Buy continue to stay in competition? Best Buy had 60% of sales come from selling consumer electronics in 2003 but today, that number stands at around 40%. The rest of its business revolves around tech-services, which include Geek Squad, as well as smart home and wearable tech. The retailer has based some of its success around what Barry Judge has confided as: “creating a product that the customer needs that they might not even know exists.” Judge feels that if the customer knows that he/she wants the product, then as a retailer “you’ve basically lost an opportunity to leverage the value”. The company has also introduced loyalty programs called Total Tech, which includes entertainment services and Total Tech support with 24/7 care for all appliances and gadgets. In so doing, Judge explained that the retailer looks to differentiate itself with the likes of Apple, where concerts and seminars offer “edutainment” value plus access to experts in the field, such as famous chefs. “This gives elements of exclusivity and trust, and it definitely sets the company apart”. Circuit City may be gone, reducing major competition, but Best Buy has to contend with the likes of Wal-Mart, Target, Staples and Amazon, sell consumer tech and online video store, iTunes.urgence in the marketplace. Best Buy attempts to ensure that its customers have access to the latest and greatest gadgets by setting up short-term exclusive distribution arrangements months before the new technology is stocked by discounters. As well, Best Buy stores are enriched by digital displays, on which “shoppers can peruse reviews and ratings from CNet, a subsidiary of Best Buy, before they make their purchase”. In this respect, Best Buy hopes to outdo the Apple Store in “fusing the online shopping experience with bricks-and-mortar sales.” For many electronic stores, sales staff operate on a commission system that often encourages them to look out for their own interest rather than the customers. Some systems at “mom and pop” shops even promote a high degree of “up-selling” where the sales associate could use intimidating tactics such as “trash-talking” a product not on sale. However, Best Buy has championed Project Assassin in stores throughout North America in an attempt to rid themselves of pushy consumer electronics sales staff. “Customers, for a mere $19.95, receive a two-year membership to Gain (Geek Squad Home Theater Advanced Information Network), which entitles an individual to free house calls for two years and 30 percent off installation services such as flat panels, computer networks and wireless gear. For now, it’s a Best Buy exclusive, but the service is expected to be offered at Circuit City sometime next year. Heck, those are some Founding Fathers prices.”

5. Conclusion: Lessons Learned and Future Outlook

In the early portion of the dot-com boom, few companies were viewed as more likely to become obsolete than Best Buy. But unlike other retailers who saw their digital counterparts gobble up immeasurable market share, Best Buy has successfully navigated the technology disruption through a pair of crucial insight-and-action feedback loops and continuous transformation. While much work remains to be done to ensure BBY’s continued prosperity (or even survival), we believe the company’s outlook is more promising than many of the other companies we have examined. Circumstances and core competencies may differ, but the case of Best Buy should offer hope to other organizations struggling to stay afloat in today’s ever-changing marketplace.

Rather than being a generic electronics retailer, differentiating itself as a provider of expertise and human touch has allowed Best Buy to carve out a competitive advantage. Best Buy’s current evolution gives it a two-fold competitive edge: an omnichannel retail and service powerhouse in the United States plus a growing multi-channel presence and a well-recognized, respected brand in Canada. As we look into the future, we believe the company needs to keep diversifying its portfolio of services and continue providing solutions. Many other traditional stores are facing similar dilemmas—how to maintain relevance and brand prestige when they’re viewed more as a relic than a necessity. We think companies with investment potential are those that have the balance sheets and the judgment to chart a course through this challenging time.

Insights and lessons from Best Buy’s (current) evolution:

The conclusion to the essay. This section should bring together some key insights and takeaways from the case, and reflect on the transformation of Best Buy. It should also discuss the future outlook for Best Buy and the tech industry.