As a teenager and music fan in the mid to late 1990s, I made almost weekly visits to Best Buy to buy a CD. Sure, I patronized the smaller mom and pop music shops in town, but if I wanted to save a few bucks, Best Buy was the place.
As Amazon became more popular and offered free or cheap shipping rates, and file sharing sites like Napster began to eat into music sales, Best Buy began to take a hit. I tried to stay loyal for as long as I could, but the lure of having the CD delivered to my house in two days for no extra charge was too enticing to pass up.
Yet today, Best Buy didn’t have to close up shop like Circuit City and other industry competitors. Not only has it survived, but it has thrived in an on-demand, Internet shopping world.
Under CEO Hubert Joly, who recently transitioned to the role of executive chairman of the company’s board of directors, Best Buy’s stock price has quadrupled and 2018 revenue increased 4.8 percent.
There are some valuable lessons all business owners can pull from Joly’s approach to turning the company around.
Yes, Joly had to make some cuts and price match with Amazon to stop people from testing a product out in a Best Buy store and then ordering it on Amazon. But he also changed how Best Buy approached selling products and dealing with customers. He realized the company could no longer depend on dorks like me spending multiple hours on a Saturday browsing the hard rock section of their store looking for a new band.
He visited with rank and file employees to find out their struggles, and invested back into those employees by restoring a beloved employee discount. He also took advantage of Best Buy’s ability to get face to face with customers and build relationships, something Amazon can’t do.
“The associates in our stores are much more engaged now, much more proficient,” Joly told the New York Times in 2017.
Whether you offer commercial or residential services, there are a number of entities reaching for your customers’ wallets. Best Buy went from a simple product store to a company that positions itself as an expert in the world of electronics.
Are you positioning yourself as a valuable resource to help customers improve the appearance of their home or business? More importantly, are you engaging with your employees to find out their struggles and consistently training them to serve the customer as best they can?
Best Buy doesn’t just sell electronics and you don’t just mow lawns. Don’t wait for an outside threat to hurt your business to take the steps Best Buy had to take to survive. – Brian Horn