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How Best Buy reinvented its CX strategy to counter showrooming

ECommerce has undoubtedly disrupted the brick-and-mortar space and Best Buy, an American consumer electronics retailer, was not spared from this. In an economy where it was facing negative comparable sales and declining operating income rates, CEO Hubert Joly (pictured left) said many consumers expected Best Buy to shut due to the rise of showrooming.

But the company knew that to counter this, it needed to focus on customer experience and fix what was “broken”. As such, in November 2012, it introduced its “Renew Blue” transformation strategy, said Joly, who was speaking at the recent Adobe Summit 2019 in Las Vegas. The company knew it had to meet consumer needs and ensure that it is competitive online.

Given that price is always an important factor with consumers, it knew that it had to adjust its prices to ensure it was competitive enough to go up against the likes of eCommerce companies such as Amazon. Next, it doubled down on its online customer experience by revamping its website and investing in search, as well as introduced free shipping to remain competitive in the eCommerce space.

According to Joly, Best Buy adjusted its mindset to not be in the business of selling products or doing transactions. Instead, it has a purpose and that is to enrich lives with the help of technology.

“We don’t see ourselves as a brick and mortar retailer. We see ourselves as a company that’s obsessed about the customers and trying to serve them in a way that will truly solve their unique problems,” Joly said.

As part of this, Best Buy launched three innovations – in-home advisors, total tech support and focusing on health, in particular aging seniors. If consumers have a complex need, the in-home advisors will drop by to figure out their needs and offer suggestions on the type of technology they should purchase from Best Buy that is suitable for their homes. As for total tech support, consumers are only required to pay US$200 each year to help support the technology in consumers’ homes and ensure it is always running smoothly.

Lastly, Joly said the brand wanted to focus on helping aging seniors stay longer at home and live independent lives. As such, last year it acquired healthcare services provider GreatCall for US$800 million, enabling aging seniors to install devices at home to monitor their daily living through AI. According to Joly, these innovations prove that Best Buy is far from selling just a TV and moving on.

Data still a core aspect of customer experience

Best Buy’s focus on improving customer experience also saw a shift in media spend. According to Joly, 80% of its media spend used to focus on mass [traditional] media. But today, 90% of it is digital. As a result, it is able to build a customer database with 12,000 attributes and put it all into a single customer ID.

Using this customer database, Best Buy is able to send 40 million different versions of targeted emails, optimise the number of emails sent to each consumer and the time of the day. Additionally, its in-store employees, in-home advisors and total tech support are also equipped with information about the customers, enabling them to better service clients and meet their needs.

In 2017, Best Buy also launched a new growth strategy known as “Building The New Blue”, with an aim to reinvent the company after “fixing” it with the “Renew Blue” transformation strategy. Moving forward, Joly said Best Buy aims to become a company that is developing and selling solutions, building relationships with customers and becoming an important part of people’s lives.

Magic happens if you can connect the purpose of an individual with the company’s purpose.

Three aspects of a good customer experience

During his keynote speech at the Summit, Adobe president and CEO Shantanu Narayen (pictured right) reemphasized that today, digital transformation and great customer experience essentially starts by reimagining the entire customer journey.

“It’s about engaging with customers on the channel of their choice, moving them from one step in their journey to the next through the delivery of a delightful experience,” he said. Narayen also listed three ways for marketers to get customer experience right.

1. Having a data-driven operating model

A data-driven operating model (DDOM), Narayen said, is a combination of the customer journey with data, showing marketers how exactly the journey is unfolding in real time. He said that all companies need to have their version of DDOM designed around customer experience at the core of their digital transformation.

“Businesses need to have that clear narrative of the value proposition that each one of them is delivering, and it is critical to ensure agility for the people on the frontline who are empowered to make these right decisions and be more responsible to the customer in real time,” he said.

2. Trust and transparency.

Also, while personalisation cannot happen without data and intelligence, Narayen said it should not happen without trust and transparency.

“Data is the most valuable asset but adhering to the set of privacy principles is the best way to create that relationship and deliver a personalised experience to the customer,” he added.

According to him, one trick to succeed in this field is for marketers to know their customers like they are their only customers. Companies should aim to know what their consumers have done in the past so they can predict that consumers might do in future.

3. Focus on delivering experiences

Today, all businesses must focus on delivering expectations to win in an increasingly competitive world and strive to exceed customer expectations at every point in the journey. While building a great customer experience sounds like a simple idea, Narayen said delivering it is much harder.

This is because the legacy systems that most enterprises rely on can’t keep up with customers’ high expectations for personalisation. He added that the challenges in this area extend beyond technology because the business can be paralysed by organisational silos and the lack of process.

“All these challenges exist but the ability to put customer at the centre of your digital strategy, orchestrate their customer journey and deliver world class end-to-end customer experience – that will separate the leaders from the laggards in any industry,” Narayen said.

Adobe paid for the journalist’s trip to Adobe Summit 2019 in Las Vegas.

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