Is Best Buy Getting Wrapped Up for the Holidays?

When I saw this article “Best Buy CEO: Who’s Afraid of the iPad?” on Fast Company two weeks ago, I thought to myself “Uh oh, something is shaking up Best Buy…” When Best Buy CEO Brian Dunn first cautioned about the “cannibalization of netbooks” by iPads by as much as 50%, and then he and President Mike Vitelli quickly backtracked the comment by saying how small a percentage iPad sales has been compared to the overall PC notebook market that it simply wouldn’t affect laptop sales.

So what is the big story and lesson for retailers here?

Best Buy is the largest electronic retailer in the country. The year-end holidays represent 2/3 of its annual profit and 1/3 of its sales. The challenge for Best Buy and many electronic retailers this holiday season is that big-box retailers like Walmart, Target, Costco and even are going to keep prices down, if not further pushing prices down, for PCs, laptops and flat-panel TVs. Best Buy needs to find its unique competitive advantage and customer strategy.

Best Buy may not win in the battle of price, but it is certainly gearing up for two differentiating approaches:

One of Best Buy’s initiatives is the idea of “Connected World” – focusing on products that enable plug-in to the computer such as wireless connection from laptop to television to view videos, TV programs and slideshows.

Another initiative is to raise the bar of Customer Service. This is going to be the first holiday season for Best Buy to provide 24 hours, 7 days a week customer service. In-store, customer service representatives will also actively engage customers in conversations about what they want to buy, even items that they’re not carrying. That seems to suggest that they may have a “reactive” plan to bring in inventory as unexpectedly high demand for a particular product or products occurs.

Are you ready for the holidays? Would you like to improve your Paid Search Marketing Program by 20-30% within 30 days? NetElixir can help. We’re currently offering complimentary search engine marketing audits for retailers and provide our recommendations to help you capture your peak season’s sales. Our seasonal ramp-up service using our proprietary PPC management technology can enable brand advertisers to dramatically improve performance (transactions, revenue and ROI) by double-digits. Contact us at (609) 356-5112 ext.107 if you are interested to learn more.

– Ada Wong

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