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posted by martyb on Friday July 20 2018, @07:47PM   Printer-friendly
from the they've-come-a-long-way dept.

Bloomberg:

Best Buy, the last national electronics chain, is counting on these advisors to distinguish it from Amazon.com Inc., the company’s competitor, partner, and would-be vanquisher. With more than 1,000 big-box stores in North America and about 125,000 employees, Best Buy was supposed to have succumbed to the inevitable. “Everyone thought we were going to die,” says Hubert Joly, who was hired as chief executive officer in August 2012 after profits shrunk about 90 percent in one quarter and his predecessor resigned amid an investigation into his relationship with an employee.

Instead, Best Buy has become an improbable survivor led by an unlikely boss. Joly was raised and educated in France, trained at McKinsey & Co., and previously employed by hospitality company Carlson, based outside Minneapolis, and media conglomerate Vivendi SA, where he greenlighted a little game called World of Warcraft. He’s the first outside CEO in the chain’s 52-year history. He had no retail experience—Best Buy’s stock fell 10 percent the day he was named CEO—but Joly understands how to value, and capture, customers’ time. Comparable sales rose 5.6 percent last year and 9 percent during the Christmas season, the biggest holiday gain since 2003. The stock price has quadrupled. Even Amazon CEO Jeff Bezos is impressed. “The last five years, since Hubert came to Best Buy, have been remarkable,” he said at an appearance in April.

Geek Squad to the rescue?


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  • (Score: 5, Interesting) by richtopia on Saturday July 21 2018, @02:57AM (2 children)

    by richtopia (3160) on Saturday July 21 2018, @02:57AM (#710231) Homepage Journal

    Not commenting on my specific Best Buy experiences, the article in general was interesting and covered some of the changes that has helped Best Buy remain competitive. It is framed as Joly saving the company through some major changes and some risks taken.

    Here is the major points of the article in some select quotes:

    In March 2012, the company reported it had lost $1.7 billion in a single quarter. Meanwhile, the board’s audit committee learned that Dunn, who was married and 51, had a close relationship with a 29-year-old female employee. An investigation found the CEO had given the woman tickets to concerts and sporting events and loaned her $600. They’d met for drinks and lunches on workdays and weekends. During two trips abroad in 2011, Dunn called her 33 times and sent her 191 text messages. He resigned in April 2012. (Dunn declined to comment for this story.) Schulze, who’d learned about the relationship, was forced to resign as chairman.

    “You could feel the vibe change within the building,” Amy College, a senior merchandising executive, says of the weeks after Joly took over. He gave up the executive suite where Dunn had worked, with a secure entrance and a panic room nearby. He didn’t renew sports sponsorships and ended Best Buy’s experiment with a results-only work environment that dispensed with schedules, mandatory meetings, and clock-watching. As part of a $1.4 billion cost-cutting plan, he sold ventures in Europe and China. After layoffs at headquarters, he and his chief financial officer, Sharon McCollam, figured they could shrink most workspaces by a few inches to fit almost all of the 4,000-person staff into three of the four buildings the company owns in Richfield, Minn. U.S. Bank is among the tenants that now rent the fourth.
    Joly made another deft overture that fall: He worked at a store in St. Cloud for a week, which showed him that he could improve morale with even a small gesture. He made a bigger one when he restored the company’s generous employee discount program, which Dunn had curtailed. Joly also invested in regular training for the sales staff, who he says were “considered not very competent and not very engaged.”

    ...“There is a lot of room for both of us.” Best Buy and Amazon together account for only a quarter of all consumer spending on electronics. “It’s not a zero-sum game,” Joly says often.

    Five weeks later, in mid-April, Joly and Bezos appeared at a Best Buy store in Bellevue, Wash., to announce a joint venture. The companies would release Toshiba and Insignia smart televisions with Amazon Fire TV...

    There is, of course, one thing Best Buy has that Amazon doesn’t: more than 1,000 big-box stores. Joly saw the benefit of using them as showrooms—a word so fraught in retail that the company calls them showcases ...[specific examples]... Amazon doesn’t sell Google Home and offers a limited selection of Google’s Nest products. Best Buy is neutral ground.

    The brands essentially pay rent to Best Buy (it’s cheaper than building stores) and either send in their own salespeople or train the blue shirts.

    To one longtime employee, this was an enticing idea: an elite group of salespeople who could offer more than the Geek Squad did. ...[specifics about setting up the program]... The advisory program, which emerged through conversations with Joly, would live by three main rules. No. 1: No job is too small. “We’ll come teach you how to ask Alexa questions,” Barry says, offering an example of a current—and common—request for using the Amazon Echo. No. 2: We will come to your home for free. No. 3: Be comfortable not closing a deal by day’s end.

    Starting Score:    1  point
    Moderation   +3  
       Interesting=2, Informative=1, Total=3
    Extra 'Interesting' Modifier   0  
    Karma-Bonus Modifier   +1  

    Total Score:   5  
  • (Score: 2) by legont on Saturday July 21 2018, @05:01AM (1 child)

    by legont (4179) on Saturday July 21 2018, @05:01AM (#710272)

    The reason Best Buy exists is the same as Microsoft's - big boys were afraid of anti-monopoly laws.

    --
    "Wealth is the relentless enemy of understanding" - John Kenneth Galbraith.
    • (Score: 0) by Anonymous Coward on Saturday July 21 2018, @06:57PM

      by Anonymous Coward on Saturday July 21 2018, @06:57PM (#710537)
      And how did they keep Best Buy alive?