By Andria Cheng, MarketWatch
Reuters
Scene last year at a Best Buy store in California. The company faces a competitive holiday battle ahead.
RICHFIELD, Minn. (MarketWatch) — When Best Buy Co. looks to hire sales staff, job applicants go through a 30-minute screening to help the company gauge the prospective employee’s interest, not only in technology, but also in people.
Begun over the summer, the effort by Best Buy
/quotes/comstock/13*!bby/quotes/nls/bby
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, the No. 1 U.S. electronics retailer, seeks an edge against Wal-Mart and other giant retailers by expanding its notion of customer service beyond just showing shoppers what’s on the store shelves. If a customer has a question, the store’s staff in blue-shirts are charged with helping to hunt down answers, including finding a product that its stores don’t yet carry.
“My vision is of the blue shirt as a human search engine,” says Robert Stephens, founder of the company’s Geek Squad repair and installation team who was recently promoted to the newly created position of chief technology officer. “My vision is people will start to see a difference in the interaction they have.”
Reuters
Best Buy CEO Brian Dunn says the company aims “to put technology and service in people’s lives.”
Faced with an ever more competitive landscape featuring incursions by the likes of Wal-Mart Stores Inc. /quotes/comstock/13*!wmt/quotes/nls/wmt (WMT 53.76, +0.41, +0.77%) , Target Corp. /quotes/comstock/13*!tgt/quotes/nls/tgt (TGT 54.04, -0.29, -0.53%) and Amazon.com Inc. /quotes/comstock/15*!amzn/quotes/nls/amzn (AMZN 163.56, -1.08, -0.66%) , Best Buy Chief Executive Brian Dunn is counting on what he calls a “connected world strategy” to set the Richfield, Minn.-based company apart. Read story on Best Buy’s holiday promotional plans.
Best Buy’s stock has risen more than one-third since reaching a 52-week intraday low of $30.90 on Aug. 27, outpacing a 15% gain by retailers in the S&P 500, amid optimism that the company will benefit from increasingly gadget-driven holiday purchases.
Its market share among electronics retailers reached 30% last year, from less than 25% in 2004, according to Euromonitor.
Alongside its vast array of electronic products, Best Buy is selling such services as cable connection and its own branded mobile-broadband packages. Its 180,000 employees, including 20,000 on the Geek Squad, are key in helping to thread those dots together and making the company at the top of the minds of consumers, the company said.
“The connected world strategy is focused on touching a larger profit pool,” said Barclays Capital analyst Michael Lasser in an interview, adding there’s a big profit opportunity for the retailer through service offerings. “Best Buy can compete effectively on price. Service and selection are their competitive strengths.”
Best Buy also wants to differentiate itself by experimenting with new product categories, like electric vehicles, heart-rate monitors and a yoga mat with a built-in speaker that can be either connected to a computer, a mobile device or a power cord.
“We want to put technology and service in people’s lives whether it’s around the information they crave, or the entertainment they desire or the connections to the people they love,” Dunn told MarketWatch. “We are a technology enabler.”
Best Buy banks on sharp staff
The No. 1 U.S. electronics retailer is heading into the holiday shopping season with a push to expand its in-store offerings to include more services and improved customer service from its sales staff. MarketWatch's Andria Cheng reports from Richfield, Minn.
Analysts are giving Best Buy the benefit of the doubt.
“It’s something they’ll have to do to replace space in some of the other categories that are in a cyclical decline,” Barclays’ Lasser said. “They’ve got a good track record of evolving with the market.”
Best Buy’s sales of flat panel TVs and notebook computers, among the industry’s two biggest categories, have declined, in line with the industry trends, as the company helps to offset those with sales of mobile phones. It also has taken some shelf space from DVDs and CDs for areas including its digitally-connected health and fitness gadgets.
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