Best Buy Rolling Out New White-Goods Strategy

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Building on recent gains in the major appliances category, Best Buy has begun rolling out a new majap strategy that calls for an expanded product assortment and enhanced training for department sales staff.

At the same time, the No. 4 white-goods merchant will also begin retrofitting its appliance departments with new lifestyle-vignette merchandising displays.

The strategy is the outgrowth of pilot program that was tested in three stores some 18 months ago and has since been expanded to 150 locations. The program is being rolled out this year to approximately half of the 728 Best Buy stores that will be operating by next March. No changes in department space allotment are planned.

According to Lisa Smith, Best Buy's business general manager for appliances, the focus of the expanded assortment will be on the built-in cooking category, a new area for the company. The chain will also expand its special-order capabilities, which have been available to consumers nationwide for the past 18 months but are still underdeveloped, she said.

Perhaps the most significant element of the strategy is the introduction of an additional 80-hour training program for sales floor staffers, designed to “increase engagement” with shoppers, drive customer loyalty and enhance revenue performance. The training, based on insights from customer focus groups and input from vendors, encourages sales staff to invest hours with consumers who require extended deliberation, while still providing quick solutions for time-pressed shoppers. There is no change in the department's compensation model aside from bonus opportunities for department heads.

The shift represents a “big cultural shift” for Best Buy, Smith said.

The determination that some customers prefer an extended in-store experience, plus the trend by vendors to introduce complete collections in addition to individual SKUs, also prompted the creation of new merchandising displays. New York-based ESI Design, which conceived Best Buy's Escape and Studio D concept stores in Chicago, developed the lifestyle vignettes for the retailer's interactive lab store in West Hollywood, Calif.

The displays will be installed in all U.S. Best Buy stores by this summer, with 100 locations receiving full-size, walk-in vignettes (currently in seven stores), while the balance will each feature 10 “mini-vignette” end-caps.

“It's a change in our thinking,” Smith said. “They [the large-scale resets] allow the customer to sit down and spend a couple of hours with our sales person, and can also highlight complete collections.”

Smith noted that the new initiative runs tangential to Best Buy's customer centricity program, and that any changes in assortment by customer segment will be more nuanced than those in consumer electronics. However, the company is exploring “regional opportunities” in white goods, including assortment enhancements in urban areas, she said.

The new approach to appliances follows the introductions of LG, Samsung and, more recently, Siemens-branded white goods, which have helped revive Best Buy's once stalling majap business. Indeed, appliances were the strongest-performing product group during the company's fiscal fourth quarter, with same-store sales of majors rising by the mid-teens.

“We're pleased with Siemens' performance,” Smith said. “Consumers respond to innovation and style. And like LG, Samsung and Dyson [vacuum cleaners], it fulfilled a need by premium customers.”

Best Buy also continues to do a brisk business with Whirlpool, which Smith described as a “wonderful, innovative partner” with which the retailer shares a focus on customer insights. GE and Frigidaire are also well represented on the selling floor, and the space being abdicated by Maytag will be shared by all vendors, she said.

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