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Saturday, September 25, 2021

Best Buy Beta Is A Really Smart Idea

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Best Buy
is at it again, this time with a new subscription service program called Best Buy Beta. For $199.99 per year, Best Buy Beta subscribers receive around the clock 24/7 concierge service and an array of benefits, including “exclusive member pricing, unlimited Geek Squad technical support, up to two years of protection on most product purchases, free standard shipping and delivery, and free installation on most products and appliances.”

The program, just announced last week, is already live in select stores across Iowa, Oklahoma, and Eastern Pennsylvania, and Best Buy says that, come April, it will also roll the program out to a total of 60 stores, including new locations in Tennessee, North Carolina, and its home state of Minnesota. 

The move is smart beyond its years.

#1 — It’s Low Risk

First, like so many of the aggressively innovative things Best Buy has undertaken since the pandemic began, Best Buy Beta appears to be grounded in a low risk, scientific method-based approach. The program almost has a zero cost of failure.

If it doesn’t work, who cares?

Trying it though gives Best Buy the ability to see what services matter most by market, what the relative price elasticity is of the offering, and how difficult it is to train their store, headquarters, and help desk staff along the way.

No matter what happens, Best Buy will learn something, and that is a page straight out of Amazon’s
book, a company who isn’t afraid to shutter everything from Dash Buttons to Pantry services in the name of figuring out what really moves the needle.

#2 — Service = Brand

Second, Best Buy Beta also plays up the one thing for which the Best Buy brand needs to be known to survive — namely, service. 

Throughout history, stores have existed for five reasons, regardless of whether they have been physical or digital entities. Stores have provided:

  • Inspiration
  • Immediate Gratification
  • Convenience
  • Taction (the idea of touching, feeling, trying products on, or doing all the things one does to build confidence in his or her own purchase)
  • Experience (the memory or social delight of being somewhere)

In a post-pandemic world where nearly everything is now like pizza and available for pickup or delivery within 30 minutes or less, the only tried and true long-term points of differentiation between a physical and a digital retail experience are the last two points, the idea of taction — i.e the ability to touch and feel products or to get the help or “service” one needs for confidence in a purchase — and the sheer joy of shopping itself. All else is done as well if not better digitally than inside of a physical store.

Best Buy’s wicket is especially sticky on this front because it sells the same market-available products that many other retailers sell and also does not have another value proposition, like that of a one-stop shop of a Target
or a Walmart, upon which to fall back.

Therefore, instilling confidence in why one should buy a computer or a TV at Best Buy versus any of the other easily accessible options out there is Best Buy’s only real long-term hope. Confidence is what will keep people coming back to the Best Buy brand, both digitally and physically, time and time again.

#3 — Homes Are Getting Smarter And Harder

Third, things will only get smarter. Networks are getting smarter, homes are getting smarter, and even communities are getting smarter. Heck, even ex-Walmart
e-commerce chief Marc Lore reportedly is rumored to be building a new smart city of the future after he is done buying up professional sports teams.

The punchline to all this activity, however, is that making everything work smartly within one’s home is actually a lot harder than it looks. It is easy to talk about turning one’s lights on with one’s voice or opening one’s door with a mobile phone with friends at cocktail parties, but keeping all these different things working correctly and then adapting them as technology continues to update year after year is about as easy as understanding how in the hell to pronounce Elon Musk’s newborn son’s name

The reason the below SNL skit is funny is that there is massive truth in the joke for every generation and not just for generations named Maude and Mildred. 

The Boomers aren’t far behind and neither is Generation X.

The two universal truths upon which Best Buy is betting are that: 1) the pace of technological change will keep getting faster and 2) the ability of anyone over the age of 40 to keep up with this pace of change is inversely correlated to how many years they spent sharing a landline phone growing up. 

Put simply, people are just going to need more help navigating the future than they do today.

What may seem easy today won’t be easy tomorrow.

Technology will only get more complicated and intricate, and the act of selling, as a result, will move from the pre-purchase activity consumers have known so well for the past century to more of a post-purchase activity, where service becomes the real separator.

Technology has already filtered out (thank you, Amazon) so much of the pre-purchase noise. It is the post-purchase activity that is the still yet undiscovered and fertile soil upon which no retailer has yet sowed its seed. 

Is Geek Squad perfect today? Likely not. Is a near $200 price tag too much? Maybe. Does Best Buy have the current level of expertise to pull this all off? Also hard to say.

But these questions also do not matter because Best Buy has about as much chance as anyone of figuring out what a program like Best Buy Beta could and should entail for the long-run.  

Service, pricing, training, etc. can all improve over time. It is only the first inning of the race thus far.

Walmart and Target can’t pull something like this off. They don’t have the brand, skills or the know how. And when was the last time anyone ever walked into an Amazon store to get help with a computer?

Pretty much never.

Apple comes up in this arena too, but few people’s homes are all Apple, and Apple devices can also still be a bit pricey for many.

No, instead the idea and the macroeconomic need are there for Best Buy’s taking, and back to point #1 above, what’s the worst that happens if the whole idea doesn’t work?

Absolute zero.

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