Best Buy's Diamond as Big as the Ritz
Is Touchy-Feely Customer Research the Way to Go?
March 23, 2006: Vol. 2, Issue No. 23
IN THE NEWS
Best Buy thinks outside the big box
In several concept stores located in the Midwest, Best Buy is gathering data about consumer behavior in retail outlets that are quite different from the "big box" stores normally associated with America's largest consumer electronics retailer. The new stores, with names like Eq-life, Studio d and Escape, are helping Best Buy understand how to improve the shopping experience of a new class of technology buyers.
—Tom Krazit, C/Netnews.com, March 21, 2006
Brad Anderson is CEO of Best Buy, the $28 billion consumer electronics and appliance behemoth with more than 700 big box retail stores.
At a Columbia University Retailing Leadership class, Anderson was asked how he viewed the threat of a smaller competitor, such as Tweeter, cutting into his share of market.
"With abject fear," Anderson said.
Anderson said that retailing was unlike a pharmaceutical company that owns patents and can operate under that protection. Retailers do nothing that cannot be copied, which means they have to continuously change and improve to keep ahead of the competition.
Brad Anderson is personally hot-wired to the academic and experimental community. In the Oct. 18, 2005, edition of this publication, I described how Anderson hired as a consultant Columbia Business School professor, Larry Seldon, author of "Angel Customers and Demon Customers: Discover Which Is Which and Turbo-Charge Your Stock."
Using Seldon's philosophy, Anderson trashed the lower quintile of his customer base. This is the legion of unprofitable shopaholics who buy only the loss leaders and resell them on eBay and/or buy merchandise to collect the rebates and then return the merchandise—the chiselers and shysters with time on their hands, who professor Seldon refers to as "devils."