It may be different this time, but this situation is reminiscent of so
many past situations where highly paid managers buy themselves time
on the payroll by saying they are going to implement a great new plan
with dramatic changes, etc. etc. Often, as here, it involves (perhaps
wrongly) applying brand management theory to a retailer who is selling
someone else's branded merchandise. The basis for brand identity in
CE retail consists of price and/or service, period. In the past strategies
have involved trying to find the right sweet spot on the price/service
continuum. And no brick & mortar regional player is going to price
compete with supply chain champions like the warehouses and Best
Buy. Promotional focus should be on service.

Unfortunately, so far there has been only one demonstration of a
breakaway from the typical CE product promotion mentality, and
Harveys actions suggest they are not about to become the 2nd.
Rather than being a mere rearrangement of the deck chairs, a
successful strategy will likely have to go much deeper, to the roots of
the basic business model. It will have to place service at the core of
the customer offer, not on the periphery as an after sale add-on or a
presumed pre-sale giveaway.

Apple alone has done this. I realize they exist in their own oasis of
controlled pricing, but when you look at how their offering has
developed, they have demonstrated that they will not let service be
limited to only what the product margin allows. They now have several
informational services for which they charge up front, and these
services are independent of the product sale. Whatever a customer
needs to use their product, they provide. And if it's too costly, the
customer pays for it, often up front. And pay they do. Proof you can
sell service separately from the product--including pre-sale services.

If the retailer's service offer is good enough, it will sell on its own
merits and an allowance for service no longer has to be bundled into
the product prices, making them more competitive. In this way the
excellent service can improve the overall "brand" image by making it
appear more price competitive as well.

Does the CE consumer need such services? Consider the increasing
complexity of today's products. They are complex to choose and use,
and a good comprehensive service package should be a cinch to sell up
front.

On the other hand, when management is needed to fix a problem, why
would they "think different" when they could get paid to perform just
the expected tasks? Consider the CE chain CEO who paid $5 million to
a consulting firm for a lengthily developed new strategy, then retired
just as the results came in. In that particular case it's hard to argue
the strategy had any lasting benefit.

We all hope the Harvey's results will be different.