In an effort to boost its services business, Best Buy is testing a free in-home advice program to help customers overcome their techno pain points.
According to a research note by Credit Suisse retail analysts Seth Sigman and Kieran McGrath, the In Home Advisors (IHA) pilot is assessing the kind of CE issues consumers encounter where they live, and determining what tools and investments the retailer will need to address them.
The initiative is designed to buoy Best Buy’s Geek Squad services business, which has been beset by steady revenue declines due to lowered service pricing, fewer repair claims, and perhaps a disposable CE mindset fostered by industrywide commodity pricing.
But management considers services critical to differentiating the chain from its tech competitors, and is betting that an increasingly complex web of IoT-connected products will generate greater demand for tech support, drive customer loyalty and revenues, and will lead to ancillary product sales.
Services may also be Best Buy’s strongest card now, as Amazon continues to gobble up market share in hardware and software. Indeed, an estimated 90 percent of all CE retail sales growth last year was garnered by the new No. 2 tech retailer, based on stats from TWICE’s latest Top 100 CE Retailers ranking.
The analysts gleaned their insights during a recent management meeting with CEO Hubert Joly, executive advisor Sharon McCollam and her successor, chief financial officer Corie Barry.
The team also reiterated its continued focus on cutting costs, improving operational efficiencies and investing in online, and described a favorable business climate in which consumers remain relatively confident and ample opportunities exist to win market share.