​Everyone is a CIO: How tech complexity may bolster Best Buy

Best Buy is betting that consumers will need integration help amid connected homes and the Internet of things. Can the retailer be a systems integrator for the masses?
Written by Larry Dignan, Contributor

Best Buy's second quarter earnings were strong and highlight how the company's approach to pricing, selection and multichannel marketing are paying off. But what's really notable is that Best Buy is betting that everyone will have to play chief information officer and wrestle with integration, complexity and messy tech just like large companies do.

Welcome to the world of every CIO.

On a conference call with analysts, Best Buy CEO Hubert Joly said the company's 2.7 percent domestic second quarter sales growth -- a bit rare in a rough quarter for retailers overall -- was driven by new technology such as wearables and mobile devices, appliances and connected home gear. Including gains from mobile installment plans, Best Buy's same store sales were up 3.8 percent. Best Buy's non-GAAP earnings of 49 cents a share beat estimates by 15 cents in the second quarter.

But here's the Joly comment that caught my eye:

The increase in complexity and interoperability of technology products and the advent of the Internet-of-things are making Best Buy's operating model increasingly relevant as customers want and need more help selecting, installing, connecting, integrating, using, maintaining, and taking full advantage of their products.

And when you consider Best Buy has Geek Squad and a pilot to launch Apple Care in select stores you see where Joly is headed. Best Buy is betting that it can be the services and integration outfit to the consumer. You are a CIO and Best Buy wants to be the Accenture/IBM/Deloitte for the masses.

Let's get real. The connected home meets Internet of things movement is going to result in an integration nightmare. CNET's Smart Home reviews highlight how everything in your home has gone high tech.

The catch? Devices won't talk. Platforms won't gel. And it's going to take some work to get your various things -- light switches, refrigerators etc. -- to even say hi to each other. Toss in smartphones, tablets and a bevy of other devices and Joly's bet may just work. You'll need someone to outline what to do and that person may actually have to be a live human.


It's debatable whether Best Buy can be that services company to every person, but it's hard to argue with the complexity of technology point. You'll wrestle with security, big data and efficiency just like the CXOs do. Consumer tech vendors are used to selling you stuff -- not the applications needed to manage your data, secure it and become more efficient. And just like the large enterprises, consumers will have their share of IT failures. Frankly, the challenges are enough to make you pine for a dumb home and car.

Nevertheless, Joly said that consumer demand for technology is only increasing. It helps that Best Buy seems to have its multichannel retailing and marketing together relative to previous years.

So far, Best Buy's dream to be your tech consultant is a bit aspirational. But beginning Sept. 13, the company has the following plans:

  • A Geek Squad support plan that combines hardware and 24x7 software support with damage coverage.
  • The pilot of Apple Care in 50 locations. Best Buy will be an Apple authorized service provider.
  • "A range of classes" that revolve around digital imaging in its Samsung experience shops in store and Windows 10 tutorials. Samsung will also have open houses in store for its high-tech appliances.

Now there are a few wild cards such as how the stock market volatility will affect spending on tech, but Best Buy is confident about its prospects going forward. Nothing like a little technology integration to help a mostly brick-and-mortar retailer out.

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