Here’s an appropriate followup to my last post (about the “premature burial” of big box stores). There is a lot of attention paid to the turnaround efforts at Best Buy, and justifiably so. Here’s a recent comment from RetailWire:
Best Buy was declared dead far too early, considering its size and its niche. And Hubert Joly’s hiring — at first met with skepticism — turned out to be a smart way to refocus the business on customer satisfaction.
I give credit to Mr. Joly and team for focusing on the fundamentals at Best Buy: First, embrace the challenge of “showrooming” by converting store traffic into transactions. Second, recapture at least some of Best Buy’s reputation for customer service, which slipped after the demise of Circuit City. Finally, find some new merchandising strategies (Samsung and Microsoft “shops,” for example) to use the center of the store more productively.
Best Buy still faces plenty of challenges, including robust competition from Walmart and Amazon among others, some unproductive sites and the cyclical nature of consumer electronics demand. But there is no doubt that the company has taken some important steps forward.
POSTSCRIPT: Since I published the comment above, Best Buy reported very disappointing holiday sales and their stock priced has fallen from the upper $30’s to the mid-$20’s as of January 24th. Obviously they are not out of the woods yet. I still think Mr. Joly’s initiatives are the right ones, but it’s hard to drive demand in consumer electronics without an influx of new products.