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Best Buy Takes Cue from CE Pros, Focuses on Connectivity

Just days after CE pros present streaming media strategies at EHX, Best Buy announces 'Connected Store' concept. Coincidence?


Sell the content, not the devices! That was the lesson of our streaming media panel discussion during EHX - The CE Pro Event in Orlando, Fla.

The gist? When someone walks into your shop looking for a TV, the first questions shouldn’t be: What size? What resolution? What brand? It should be: What do you watch?

This will help the dealer create a personal relationship with the customer and open the door to more sales.

You don’t need tons of TVs and components to clutter your shop (and your message). You just need some technical expertise and the willingness to connect with customers.

That is the very premise behind the new Connected Source concept to be implemented by hundreds of dealers who are part of the Home Entertainment Source/ProSource group.

Chad Evans from ProSource presented the merchandising strategy for Connected Source during the EHX panel: Keep the product offerings spare and the connectivity message strong. Lo and behold, just days after the presentation, Best Buy (NYSE: BBY) announces a re-design of its stores to focus on content and connectivity.

Coincidence?

The retailer has announced a major reorganization of its stores to showcase “retail minimalism,” according to Bloomberg: “Floor walkers have been retrained to show shoppers how gadgets work together - a concept [CEO Brian] Dunn calls the ‘connected store.’”

Bloomberg describes the new scene:

Store No. 584 in the Pittsburgh suburb of North Fayette, Pennsylvania, provides a glimpse of Best Buy’s new direction. Gone are the tall enclosing shelves that have long typified the stores. Instead, a range of gadgets -- from tablets to cameras to digital photo frames -- are displayed on low tables. Shoppers get there via “the runway,” a stretch of blue tile leading from the front doors through the center of the store.

Saturday Workshops

As few as half of the store’s employees were trained to sell gadgets storewide. Now most are trained to sell across all categories. On Saturdays the store holds workshops. In one, a staffer demonstrates how to wirelessly display a photo on a TV.

“It used to be I could say, ‘This Blu-ray player can connect to the Internet and it can do Pandora and Netflix,’” said Mark Staub, a Pittsburgh store employee who oversees the displays of connected devices. “Now I can say, ‘Hey, let’s walk back there and I can show you how to do this.’”

Will it work? Bloomberg quotes analyst Michael Pachter, who says, “Their solution may be good for 2011 but will be irrelevant by 2014. Technology is going to pass them by like they’re standing still.”

Eyal Kattan of Media Nexus, an integrator who also presented at EHX, agrees with the analyst:

“I think wholesalers such as Costco and Wal-Mart, as well as online sellers such as Amazon, are going to be on the rise while Best Buy is phasing out or downsizing,” he says. “I am just wondering how Mr. Dunn is going to train all of his ‘unknowledgeable’ store employees and make them knowledgeable enough overnight.”

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Learn more sales strategies for streaming content and connectivity at CE Pro Live, the virtual trade show, May 25, 2011.




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Article Topics

Blogs · Video · Digital Media · Events · EHX Spring · Streaming Media · Best Buy · Big-box Retailers · Home Entertainment Source · Prosource · All topics

About the Author

Julie Jacobson, Co-Founder, EH Publishing / Editor-at-large, CE Pro
Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Follow her on Twitter @juliejacobson. [More by Julie Jacobson]

7 Comments (displayed in order by date/time)

Posted by Bruce S.  on  03/25  at  11:16 AM

Hmmm…  don’t think this is revolutionary. Isn’t this what CI’s have been doing for years? Cater to customers needs not what the current spiff is. Moving boxes is a dead business model unless you are Costco, Sams, Wal-mart, Amazon etc. Ant even then You have to move a lot of boxes because your margins are low.

Goes to show that large company’s just cannot reproduce what the smaller more personable company’s can do for a client. Best Buy seems to be in a sort of scramble mode. Trying anything that sounds good on paper or in a boardroom. But not realizing that large scale implementation is near difficult to imposable. (i.e Circuit City, Tweeter, Ultimate, Good Guys, etc.)

Posted by Tuck  on  03/26  at  06:27 PM

Training employees to sell a different way doesnt make it obsolete for 2014. Keep evolving.

....analyst Michael Pachter, who says, “Their solution may be good for 2011 but will be irrelevant by 2014. Technology is going to pass them by like they’re standing still.”

That is not something I would want to be quoted as saying. Actually, sounds stupid.

Posted by cb  on  03/27  at  08:19 AM

So how do they plan to actually pay for these stores and employees? Their margins are minimal already at best on these gadgets, so showing someone how to hook it up for free will be a BOON to Amazon and the like. RIP Best Buy by 2012. their stock is down 25% in the last 3 months, posted its third straight quarter of same-store sales declines, also forecast a fall in same-store sales in the current quarter. “BB… has been hurt by U.S. shoppers showing little interest in newer technologies such as 3-D and Internet-based televisions. The company is concerned about demand going forward too.”
See the writing on the wall before it is too late - your days are OVER

Posted by Joe Whitaker  on  03/27  at  10:03 AM

Lol, But with advertising with both Ozzy and Justin Bieber how can they go wrong? I actually agree with most of what you said. We have been seeing a steady decline in big box stores that offer “semi high end” products with sales strategies like Walmart. There only chance of survival is to change their in-store strategy. However it might be too late. As integrators have already moved away from “box sales marketing” we are now being looked at as the go to guys on ANY devices above the normal Sam’s sale. As more connected and inter-operable products hit the market and are accepted Custom Integrators look more attractive to the consumer. With Best Buy’s change in in-store strategy i also here that there will be a change in field staff training and operation. However, I feel like you that this may be to late. But with marketing collateral like the “Prince of Darkness” and the new “Prince of Pop” I could be wrong!

Posted by mt  on  03/28  at  09:52 AM

The “Connected Store” idea from Best Buy was actually in development for a number of years. Futureshop, the Canadian counterpart of Best Buy Canada has already had demo stores of the “Connected Home” and plans up to 4 years ago. The plans eventually fell through however due to some unforseen and and untold reasons. Evidently Best Buy is now going to pick up the plan where they had left off. Timing may be a coincidence but the plans have been in motion well before the ProSource EHX panel.

Posted by Julie Jacobson  on  03/28  at  09:57 AM

mt—The EHX suggestion was just tongue-in-cheek

Posted by dantothe4thpower  on  03/31  at  06:20 AM

i think the timing is a bit more than coincidence if the plans fell through 4 years ago.

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