Target has been in the news more than enough of late. So much so, that there is another Minnesota-based retailer that deserves far more attention than it gets. One that oftentimes flies too far under the radar screen.
Best Buy
Smooth And Steady Wins The Race
I remember discussion back in 2013 like it was yesterday. Rooms full of 15 or 20 retail executives, alll sitting around and discussing whether Best Buy had any hope of surviving. The consensus at the time was, and I am paraphrasing here: “no way in hell.”
The case was simple. Best Buy, for the most part, sold market available goods, aka products that one can easily find (and likely for cheaper) on Amazon, and that, therefore, Best Buy’s business model inevitably would move online and ultimately go the way of the dodo.
Boy, were we all wrong.
Flashforward 12 years later, Best Buy is still alive and kicking and even exceeding Wall Street’s expectations, as it did once again this past quarter. Revenue last quarter came in at $9.44 billion vs. $9.24 billion expected. According to CEO Corie Barry, Best Buy “delivered comparable sales growth of 1.6% in the second quarter, our highest growth in three years.”
If you remember back a few weeks ago, I showed a similar time lapse view of Target’s financial results. Best Buy’s are starkly different in comparison. Both companies felt a pandemic hangover, but Best Buy, unlike Target, has been on a steady upwards trajectory ever since.
So why the difference? To me, it all comes down to culture.
I have rubbed elbows with quite a few folks that have worked at Best Buy over the years and have written about Best Buy regularly as a contributor for Forbes.com. The one thing that always strikes me about the company is that it just makes darn good business decisions. The company rarely lets office politics get in the way of what is best for the business. In fact, people that have worked for multiple retailers, in addition to Best Buy, have told me directly that this last fact is what sets Best Buy apart.
Enter Geek Squad
I saw this culture of making the smart move manifest itself right before my very eyes this past week in three separate and distinct ways. The first of which had to do with Best Buy’s tech support service arm, Geek Squad.
You see, I have been having a devil of a time with my Wi-Fi. And, by devil, I mean the literal devil. The thing is possessed. I have called Comcast multiple times, which is no easy feat either, by the way. You try getting an actual person on the phone to help you once you have Comcast installed. The odds of being named People’s Sexiest Man Alive are probably more in my favor than actually getting to talk to a human.
But I digress.
After going through the AI/voice activated Comcast call tree from hell, I finally got through to Comcast and had a dude come out, only to tell me everything was working fine on Comcast’s end, and that whomever initially set up the home access points (i.e. the doohickeys that extend the Wi-Fi throughout the house) would need to come out and upgrade the setup.
Well, since I bought the home over 12 years ago now, I am pretty sure “Gary,” the guy who initially set up our service, is no longer with us, I was left utterly perplexed, until I said to myself, “Why don’t I just call Best Buy and ask for the Geek Squad?”
So, that’s exactly what I did.
Six Hours & A Tech Support Angel Later
Long story short, T.J. Shay of Geek Squad came out to my house on a Saturday and spent six hours with me installing equipment and setting and resetting access points. He eventually got my system up and running fast and reliably (T.J. informed me reliability is more important than speed). Net/net, the man was a saint. Right up there with Mother Theresa and that Joan what’s her name. It was the single best customer experience I have ever had in my almost 30 years of retailing.
I mean, let’s be honest, anyone trapped with me for six hours in a basement electrical room must have a yeoman-like tolerance. There’s Confucius and then there’s T.J. If given a choice, I know to whom I am bowing down in reverence.
Could Amazon do this? Not a chance in hell. Sure, I could buy a book on zen and the art of motorcycle maintenance but that motorbike ain’t got a hope in heck of getting put together if left to my own devices, and even more so if the install requires any wiring.
Is This Heaven? No, It’s Best Buy
Like I said at the outset, however, my Geek Squad experience was just one of many things that impressed me about Best Buy this past week. What also continues to impress me about Best Buy is how it continues to make smart moves, after smart moves, digitally, as well.
Last week Best Buy announced the launch of its new marketplace. Best Buy is not new to the marketplace game. It had a marketplace in the past and shuttered it back in 2016, so the company knows darn well what the puts and takes are of running a marketplace. But Best Buy also knows that 2025 is not 2016. The retail world is a different place than it was nine years ago for a number of reasons.
First, the software to run a marketplace is the best it has ever been. Best Buy runs its marketplace atop Mirakl, the same company powering Macy’s, Ulta’s, and Lowe’s marketplaces.
Second, retail media is a much more powerful force in retail than it was during Best Buy’s first marketplace go round. There is a synergy between retail media and marketplace size (just ask Walmart). The more vendors one has on one’s marketplace, the more vendors one can leverage to compete for advertising placement on one’s website.
Third, T.J., aka the Geek Squad, is also a powerful marketing tool to upsell higher priced, higher margin items from the marketplace that Best Buy might not want to carry on its own. For example, ff he had wanted, TJ could have sold me a flux capacitor on Saturday. With a warranty.
Divine Inspiration
As hard as it may be to believe, and as geeked up as I am about my Geek Squad experience and Best Buy’s renewed marketplace initiative, neither of these two stories were the inspiration for this week’s Wrambling. No, the real inspiration came from an under the radar headline that probably escaped the attention of most folks out there. It is just about the biggest retail nerd headline going, and it has to do with Uber Eats.
Yes, Uber Eats.
Best Buy announced this week that it is partnering with Uber Eats to make its inventory available for home delivery from its 800 stores throughout the country via the Uber Eats marketplace. Uber Eats will join the ranks of DoorDash and Instacart as marketplaces through which Best Buy shoppers can elect to shop for Best Buy products.
Now, I know what some of you are thinking? Why should Best Buy do this? Why does Best Buy need to sell its products across three different marketplaces? If at all?
Because that is how digital works.
Digital retailing is different from store retailing. Digital retailing is all about eyeballs. It is about traffic flow. It is about being positioned proportionally where people are, much in the same way that your stores’ physical locations matter, too. The chances that the same shopper has DoorDash, Instacart and Uber Eats is probably pretty low and the incremental cost of adding another marketplace option is also low for Best Buy. Sure, maybe, in the long-run, Best Buy tightens up its marketplace distribution, but this approach gives Best Buy much stronger negotiation leverage down the road if it can understand the costs and benefits of electing one marketplace versus another with real data under its belt first.
The Little Blue Engine That Could
So, like I said at the outset, good business decisions. It all comes back to good business decisions. Best Buy just makes sound business decisions over and over and over again.
Best Buy is, in many ways, the Little Engine That Could of retailing. Both are blue, neither gets the attention they deserve, and both keep chugging up that hill because they think they can.
Nothing is going to stop them. Not corporate politics. Not even failed decisions of the past brought to life again for a second go round.
No, the only thing that matters is the actual hill to climb, laying the track and supplying the engine with enough steam to climb it.
Omni Talk® is the retail blog for retailers, written by retailers. Chris Walton and Anne Mezzenga founded Omni Talk® in 2017 and have quickly turned it into one of the fastest growing blogs in retail.