Excellent Marketing Initiatives by Best Buy

Introduction

It is crucial for companies to deploy marketing strategies that will not only result in sales for the company and differentiate it from the competition in the market, but also position the brand name and brand products in the minds and hearts of customers. Today's consumers are spoiled with choices. There are innovative products and products at a lower cost coming up every now and then. The only thing that will ensure regular sales to the company is brand loyalty, customer bonding with the brand, and the quality of the product.

Best Buy is one of the largest multichannel retailers of electronics products. The brand has been successful in the past and is known as a brand name because of its focus on the customer experience.

Image 1 − Logo of Best Buy, US-based retail chain

In this article, we will be understanding the birth, growth trajectory, and excellent marketing initiatives of Best Buy. It is time to dive into the pool of marketing and innovation to survive and thrive.

The Birth and Growth Trajectory of Best Buy

Best Buy is the world's largest multichannel consumer electronics retailer. The sales of Best Buy total more than 45 billion US dollars. Best Buy was a company that was born out of tragedy. Sound of Music was the name of the shop, and the shop got destroyed in 1981 in a storm. The storeroom was intact. In order to raise some liquid cash, the owner, Schulze, started the "Tornado Sale" and marketed the campaign as "Best Buy" on every product that they acquired. The sale was a huge success, and Sound of Music made more money in a 4-day sale than they typically do in a month.

In 1983, with seven stores and a sales volume of 10 million dollars, Sound of Music was renamed Best Buy. Best Buy later expanded into other electronics, thus becoming the hub for all the electronic requirements of every age group and a company that focuses on providing its customers with the best services.

Marketing Initiatives by Best Buy

Image 2 − Best Buy is a multinational consumer electronics vendor headquartered in Richfield, Minnesota.

Change in the Compensation Structure of Employees

Best Buy understood that the only way they could get an edge over their competitors was when they enhanced the customer experience, and the customer experience can only be enhanced when Best Buy has satisfied employees working.

Employees were earlier paid on a commission-based model, i.e., the salary of the employee was on the basis of the sales that they were getting for the company. This created an atmosphere where employees saw customers just as a dumping ground for their goods; hence, when Best Buy came up with a fixed salary model, employees were happy, the hostility to drive sales and meet targets was reduced, and they were working more effectively. This also had a direct proportional effect on the company's revenue.

Categorization of customers to better target them

Best Buy was getting a lot of competition with the new retail chains like Walmart, Target, and others, which were offering customers the same goods at more competitive pricing. Best Buy decided to enhance the customer experience by targeting them better. As per the different geographical locations and the frequency of buyers out there, the salespeople and the store look were decided.

For example, Best Buy divided its major shoppers into the following categories: suburban moms, avid tech geeks, young gadget enthusiasts, and price-conscious dads. Employees or the sales staff were also trained accordingly, and hence, whenever they saw customers in any of these categories, they knew which sales technique to use.

In some areas (coastal towns), another categorization was developed: "Eastern European workers." These were the people who just wanted to purchase the Apple products that were available at a lower cost, and as a result, the Best Buy shops in coastal areas like Texas moved all the Apple products from the back of the aisle to the front aisle. This also resulted in 67% more sales from this category of customers.

Additional Marketing Initiatives

Best Buy in the 21st century was facing a lot of competition from companies like Walmart, Target, Costco, and others. These retail outlets were providing goods at a lower rate. Here, Best Buy decides to include more additional customer service features to enhance or better the customer experience.

Best Buy did not want to fight over the price but over the shopping experience of customers. Hence, it included things like extended warranties and guarantees on products that are purchased from Best Buy, home delivery service to the customers and installation services, 24-hour computer service by the company, and others. Best Buy also made sure to advertise these initiatives to customers.

Changing the Leadership

Best Buy suffered a lot because it focused only on one channel of distribution. The company knew that the way customers were shopping now was changing. Amazon was already giving the company a hard time, but the company still focused only on selling through the offline medium, which is the Best Buy shops.

After late reconciliation, the company decided to change its leadership. The new leadership introduced the campaign "Renew Blue" in 2013. "Renew Blue" was developed by the new CEO to reinvigorate and rejuvenate the customer experience. Online Best Buy had features like faster and easier navigation tools on the Best Buy website, more competitive pricing, and relevant product offerings, and the company utilized the various offline Best Buy shops to deliver the goods to the customer in a shorter span of time. During that initial year, only Best Buy decided to have small and more mobile Best Buy shops in close proximity, which is what quick commerce companies are doing in 2023.

Conclusion

Best Buy had its own ups and downs in the market. It was the largest multichain-selling electronics product and has also received a huge blow by not entering the online market at the right time. The only thing that has helped Best Buy sail through all the waves of the market is its determination to provide customers with a delightful experience. Best Buy has been working on this strategy and improvising while keeping this in mind, hence again proving to us that the customer is not the king of the market anymore but the god of the market.