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It seemed a good idea when the U.S. giant Best Buy landed in the U.K. two years ago and scared the living daylights out of the competition, despite denying it at the time.
Best Buy launched in a cloud of press frenzy, hype and performance expectation, in cahoots with those shrewd operators Charles Dunstone’s and Carphone Warehouse.
The Best Buy brand has been a category killing success in the US accounting for 19% of the market and gained a reputation for
approachable and knowledgeable staff with a twist of ‘nerdiness’ to give it a point of difference. The stores themselves had a few rough edges not afraid to employ the ‘split carton’ display. This added to the no frills approach and won strong customer loyalty from its target audience.
When the brand finally arrived here, much was reported about it especially the recruitment and team building methods based on their US model, prior to their Thurrock opening and subsequent rollout. ‘Happy Clappy’ to some sceptics, admittedly the opposite to the British reserved approach or full on ‘alright mate?’ hard sell style, all grist for the mill of service expectation.
The store itself promised a relaxed ordered atmosphere and having worked for C.W. in the past, early discussions with them about the new format, indicated an honest determined commitment to make the customer journey a truly positive one.
When the store opened much fanfare was made of its wide range of sharply priced goods, electric car and bike offers, customer service and convenience. I used the store on one of our client ‘store tours’ and was impressed by the level of service, especially when having stopped a member of staff to grill them about a product he failed on the final fence of delivery time. However it transpires he was the security guard and whilst everyone in the store must have some product knowledge, he needed to call a member of the sales team. We were impressed!
Well interestingly having visited on day one and then returning a year on, the cracks were appearing. Gone were the car and wide range of two wheeled transport. In were the louder tone of voice. Out were the high staff numbers.
So what happened?
Well I thought it was pretty good. It lacked the buzz and rush I expected to get but it ticked a lot of boxes.
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It’s a good case study in bad timing, landing as they did in the middle of a battlefield with no high ground and attacks on all fronts. They may have had clout, but the competition was tough and battle hardened with the likes of Comet, Currys and Argos in particular and a well serviced online industry.
But the true failure was in spotting just how tough it was going to be in what has turned into a messy commodity sector with such a big space strategy. A week after they declared their withdrawal from the market, Currys announced that the KESA group was selling it for the princely sum of £2. Did any one at Best Buy see how bad trading had been for them? Currys figures for the last two years declared somewhere in the region of a £22m loss.
Again and again we witness the retail sector trying to squeeze the ‘low price’ genie back into the bottle. The only saving grace is new technologies to pump up the margin again and most retailers do not control those cards. With the sector reporting sales some 6% down, its clear that the landscape has experienced a seismic shift never to be the same again.
Internet sales are absolute proof of the market trend for the ‘browse Sunday, click Monday’ purchasing phenomenon. As an aside, I hear that middle England stalwart John Lewis, is having to pay through their nose to maintain their ‘never knowingly undersold’ cash back promise due to the high street price wars, a cost they say worth carrying to maintain their core brand value and continue to attract their loyal customer base.
So we wave goodbye to our American friends, but I for one am grateful for the legacy they left the sector. They helped raise the game of standards both in presentation and service. We have benefited from their challenge to the principles of best practice as consumers and made the remaining players sharper and smarter, albeit no more profitable.
There are more challenges ahead and nothing but clever thinking and five star service will do in such a demanding and difficult sector. I am absolutely sure that this industry sector will need to develop a completely new trading proposition within the next five years.
I hope as I write someone out there is hatching a plan that will deliver success in adversity, but for now lets take one step at a time and say thanks Best Buy. It was good knowing you.
Tim Jeffrey Retail Director
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