What can Best Buy learn from T.G.I. Friday's?

What can Best Buy learn from T.G.I. Friday's?

Summary: The electronics retail giant appoints French turnaround specialist Hubert Joly, late of the Carlson hospitality group. Can he inject a little flair into selling gadgets?

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TOPICS: E-Commerce
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Electronics retail giant Best Buy this morning named its new chief executive, Hubert Joly, in a bid to give the company a clear path into the future. He replaces interim chief G. Mike Mikan.

Will that future include 37 pieces of flair, too? 

French by birth, turnaround specialist by experience, Joly is tasked with taking a primarily brick-and-mortar retailer under seige from an existential storm -- in a world saturated with e-commerce, can Best Buy exist? -- and giving it sea legs. The decision is a critical one since it comes as founder and largest shareholder Richard Schulze maneuvers to take the company private. (Progress on this slowed to a halt over the weekend.)

Joly brings turnaround experience to the table. He was hired away from Carlson, the hospitality and restaurant company that includes Radisson and T.G.I. Friday's. He's also a veteran of McKinsey & Co., the famed corporate nip-and-tuck specialists, where he worked with Vivendi Universal Games, the video games group, and Electronic Data Systems, which was acquired by Hewlett-Packard in 2008.

His most recent gig holds clues. Restaurant T.G.I. Friday's competes in the fierce sector of casual dining; the chain likes to say that it stands out "among a category 'sea of sameness.' " The market dynamics are indeed similar: in a world where nearly every suburban restaurant sells burgers, beer and brownie sundaes, Friday's needs to stand out -- by price, experience or something else. (Given my Office Space reference above, it's clearly experience.) The same goes for Radisson, which recently gave itself a high-end anchor with the new Radisson Blu chain of hotels as it pursued growth in developing markets. Ditto Carlson Wagonlit Travel, which dialed up the war against American Express in the high-touch, cost-conscious corporate travel market.

Before CEO Brian Dunn suddenly resigned in April, setting in motion a patch of confusion for Best Buy, there was much consternation around Amazon stealing its thunder with lower prices. (Technology as a commodity: rough.) At the time, Dunn was resistant, citing the value of the brick-and-mortar experience. He wasn't wrong, but the retailer failed to walk the talk.

Best Buy could easily steal a few pages from the hospitality playbook by adopting a laser focus on experience. No more inept sales associates; no more endless racks of discounted DVDs, no more dedicated areas of the sales floor pitching barely-relevant products. (Can someone tell me why automotive subwoofers and smartphones are sold in the same store?) Geek Squad should be an elite group of technicians that can impress even IT professionals; it shouldn't be a faceless window where your beloved gadget is squirreled away in the back like at some Soviet-era agency. (Don't worry, comrade, we'll ration everything accordingly.)

Best Buy may be a big box store, but it needs to address the consumer on an intimate level. It needs to do fewer things better. Focus, focus, focus. Stand out in a sea of sameness. High-touch, cost-conscious.

There is one wild card: Best Buy is still a public company. Carlson was private. Joly would have more room -- and time -- to maneuver if Best Buy was taken private. 

Does Best Buy feel special? The answer to that question will make or break Joly's tenure.

Topic: E-Commerce

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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7 comments
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  • They need to get a new fry station

    I have a lot of burning vegetable oil to pour on my sock puppets heads

    :P
    CaviarBlack
  • There is indeed room for Best Buy to exist

    Best Buy doesn't always have to compete on price with Amazon. That's like trying to sustain an existence by being cheaper than the Standard Oil Company. You might be able to do it for a bit, but not for long. Amazon's methods of doing things will mean that they will always win on cheap prices, but they will never be able to compete with the pillars of retail: instant gratification, purchasing assistance, and impulse purchases.

    People who walk into a Best Buy can walk out with the product they want. Amazon can't match that, and in a pinch, Best Buy will always win out. I don't mind paying a reasonable markup on a FireWire 800-400 cable, but by "reasonable markup" I mean "When Monoprice is selling it for $5, $45 does not qualify." $10 or even $15 is fine, but just because I'm okay with taking a 300% markup on a cable doesn't mean that I'm okay with that kind of markup on hard drives or software.

    Product assistance is half the bane of going into a Best Buy. You rarely get any. When you do, it's uncommon for the people I've spoken with to do much more than read off the same spec sheets that I can read myself. I spent four years working at Staples in a past life; the info briefings and tests they make you take are rarely better than press releases set up by marketing departments who seem laughably out of touch with what it's actually like to work on a sales floor.

    When you DO get help, even if it's half decent help (and to be fair, I have interacted with more than a handful of decent, knowledgeable people at Best Buy), they're so likely to pressure you with purchasing an extended warranty and a $200 HDMI cable that it's often a better experience to go to Costco and DIY. Being asked is one thing. I'll even roll with the guy who effectively tries to overcome the first 'no'. But when I'm asked by four people to get a warranty, it becomes outright harassment. At that point, I'm not buying a warranty on principle, regardless if you give me a free iPhone and a date with Megan Fox along with it. I do understand that laptops are generally sold at a cost to make the warranty purchase worthwhile, since it's basically pure margin, and that Best Buy can't make money on that. That's not my problem, and there's no positive experience that can come from being begged to prop up a business model.

    Along with this is the whole scam of paying $30 for the decrapification process. I call this a scam because nearly every electronics retailer has its own unique laptop configurations in order to prevent issues with price matching. So they're getting models shipped uniquely to them....why aren't they coming bloatware free from the factory? That's the single simplest thing to do in order to differentiate yourself from other retailers. Coversely, the first thing I do with any laptop I've ever purchased (Except my present one that came from Origin PC, but at $3,500 you also get to choose exactly what is on the hard disk when it ships out of the factory) is to grab a Windows CD and do a bone stock install. I do not want to pay extra for a service that is worthless to me. Keep a few models on the side with their factory seals still intact.

    Finally, upselling isn't a BAD thing. The issue is that Best Buy chooses to upsell things that THEY want me to walk out of the store with, rather than things that *I* want to walk out of the store with. They've got years of data from Reward Zone cards - what do people actually buy with their laptop or stereo receiver or LED TV? What do they come back for within a week or two? *THOSE* are the things I want to know about.

    Go for it, Best Buy. Give me a reason to stop calling you "worst return".

    Joey
    voyager529
  • Customer service is it's only chance

    Which is why it's doomed to fail :-(

    It's Circuit City all over again. Big box stores don't understand customer service, and they certainly don't hire knowledgeable employees.
    T1Oracle
  • Major brands missing

    I can't look at, try, and buy a Thinkpad laptop? Ok, bye...I'm not interested in Acer or HP. Thanks for playing.

    Must carry ALL major brands in any given category of item.
    Techboy_z
  • How Best Buy and other electronic retailers get by in Southern CA

    Here in southern California, we've seen the demise of several electronics stores over the years: CompUSA, PC Club, Circuit City.

    At least three major retailers, Fry's Electronics, Samy's, and Howards, manage to hang on with our beleaguered Best Buy.

    In addition to selling just about everything with an electrical power cord like Best Buy, Fry's also caters to hobbyists who build their own machines to the latest specs, offering the most complete line-up of graphic cards, motherboards, CPUs and the such in a brick-and-mortar retail space. Only fully-online merchants like Newegg carry a more extensive and updated inventory.

    Samy's specializes in photography (like B&H and Adorama in the East Coast), and has been for decades the go-to place for Hollywood professionals.

    Howards focus on small, local markets, such as the Asian-American enclaves of the San Gabriel Valley.

    Best Buy should learn from its rivals, and see what niche markets aren't already scooped up by the other retailers. The idea that Best Buy now has a specialized area for musical instruments and studio equipment is a start, as it addresses the needs of the film and music industry here in La-la land.
    Tech watcher
  • PC Club

    PC Club was pretty cool, but they cater to a knowledgeable crowd. Their techs in Oklahoma seemed knowledgeable, but they talked over customers heads.
    bin00010111
  • BB learns fro m TGIF!

    Maybe BB should get a liquor license and also partner with Starbucks. That would at least bring more ppl into the store... Then get em all amp'd up and sell sell sell!
    Jaytmoon