The box looks familiar, but customers will find some shinyexpensive toys inside. At 45,000 square feet, Best Buy Co. Inc.’s new Connected Store inRichfield is still sizable, but there are some notable additionsaimed to engage customers: a Genius Bar-like tech support center,employees with advice on pricey stoves, and rooms where hometheater geeks can design their ultimate man caves. “Technology is an amazing place to be right now for BestBuy,” said Josh Will, a company vice president who overseesConnected Store development. “But it’s still too hard forconsumers to use.
It’s difficult to get a good understanding ofwhat technology can do for you and more importantly how it canbetter your life. It’s time that our shopping environment matchesthat expectation.” Connected Stores form the heart of Best Buy’s strategy to reduceits square footage in favor of smaller stores that emphasizehigh-end service. Best Buy plans to close 50 big boxes across thecountry by the end of the year and open 100 smaller-format Best BuyMobile and 50 Connected stores. The scaled-down concepts typicallyrange from 30,000 to 45,000 square feet compared with 58,000 squarefeet for the traditional big box. Best Buy, which is now testing Connected Stores in the Twin Citiesand San Antonio, expects the format not only to retain the shoppersbut to attract new customers, especially ones willing to gopremium.
In doing so, the company can offset some of the lost salesand profits from the traditional big boxes that will close. “We spent 50 years getting some of the best locations and realestate across the United States and so we’re investing in thosestores,” Will said. “We expect to get an equitable returnon that investment.” Though generally praising the redesign, industry observers stillquestion if the format can help the consumer electronics giantreverse its sales declines and regain momentum from the likes ofWal-Mart and Amazon. Or more specifically, if the Connected Storecan help Best Buy erase the scourge of showrooming, the practice ofconsumers examining store merchandise and then making the purchaseonline on a competitor’s site. “Making the store look nicer is always good,” said LauraKennedy, an analyst with Kantar Retail consulting firm outside ofBoston.
“But it’s still not Apple in the end.” There are some Apple-esque elements in the store. Start with theGeek Squad Solution Central in the middle of the store. Borrowedheavily from the Apple Store’s popular Genius Bar, the centeroffers free tech support consultations and classes from Geek Squadagents. Customers can also purchase and activate their devicesbefore they leave the store. Will said the center can help establish customer loyalty byoffering shoppers help with mobile devices that run on bothGoogle’s Android and Apple’s iOS operating systems.
Android nowpowers up 51 percent of the smartphone market while iOS controls 31percent, according to ComScore. Then there’s the Magnolia Home Design Center. Inside mock-up rooms,Best Buy designers go beyond just flat-screen TV and sound systemadvice — they show customers how to best configure thosetechnologies for their homes. Over at the Pacific Electronic Kitchen Scales & Home section, consumers can askemployees how to create the ideal Electronic Kitchen Scales to fit their lifestyles,which may or may not include a $15,000 Viking refrigerator.
BestBuy is clearly trying to trade up its customer base, Kennedy ofKantar said. “When you ask for professional advice, you probably have themoney” to buy these products, Kennedy said. In the end, analysts say the Connected Stores will only work ifthey can attract new customers willing to frequently purchase goodsand services in the store versus simply buying products on acompetitor’s website. At the recent annual shareholders meeting,interim CEO G.
“Mike” Mikan said ending showrooming is a”top priority for our team.” A recent survey by ComScore showed that 35 percent of respondentssaid they practiced showrooming. Of this group, 60 percent saidthey had originally planned to purchase products in the store butchanged their minds while there and bought them online, mostlybecause they found better prices. To get new people through the door, Best Buy needs to create afeeling of excitement, Kennedy said. Though the Connected Storesare solid, they probably won’t blow anyone away, she said. Thomas Lee
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