Best Buy Testing AutoTech Mega Hub

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Best Buy to pilot AutoTech hub

Best Buy revealed about a half dozen new and evolving test pilot programs including the creation of  “AutoTech mega hubs” for car tech installation.

It’s part of a test pilot of remodeling several stores to serve as new repair centers and open box stores.  Currently, there are 15 open box outlets that focus mainly on large appliances and TVs.  In the new format, the stores offer open box product from all categories.  To paraphrase CEO Corie Barry on an earnings call today with analysts, “It will also serve as a hub in a new service and repair hub and spoke model we are testing, as well as an AutoTech mega hub for our car tech installation.”

No further details were offered.

Best Buy is also launching a pre-holiday virtual store—a physical store in a distribution center, merchandised with product and staffed with associates including vendor expert labor but no physical customers.  Instead, customers interact with experts by chat, audio, video and screen sharing. They can see live demos of product. Again, paraphrasing Barry, “You could be on our dot com site, click on a product and be connected to a Blue Shirt in the virtual store and never leave your living room.  Or you could be standing in the stores, scan a bar code and be taken to the virtual store.”

Best Buy is testing a mobile app that would allow “grab and go” customers to check out without dealing with a store associate.

The chain plans to add messaging to its electronic store labels so consumers can see if a product is in stock at nearby stores or online and when it could be delivered and installed.

Best Buy has been testing an expanded version of its Total Tech Support program (you pay $199/year and get unlimited tech support and many free installation services, including basic car audio installation).  Under the expanded program, originally called Best Buy Beta, and now called Best Buy Total Tech, consumers also receive perks such as free delivery, a 60-day product return window, exclusive member pricing and more.  Best Buy plans to roll out the program nationally at the end of its third quarter. It will convert the current 3.1 million Total Tech Support members to the new program.

Best Buy is encouraging employees to train in jobs outside their main expertise to create a flexible workforce.

In Charlotte, the company is testing different prototype stores, remodeling 15K, 25K and 35K square foot stores and launching a few new smaller 5K stores.

In four Minnesota test stores, Best Buy reduced the “shopable” square footage to 15K square feet to provide more space for online fulfillment.

In Houston, new 35K square foot store pilots have resulted in double digit higher revenues.

Best Buy today announced 20 percent higher revenues of $11.8 billion for the quarter ended July 31. Due to the pandemic, Best Buy now serves a larger installed base of consumers, said Barry.  Net income for the quarter was $734 million compared to $432 million a year earlier.

Best Buy was closed to in store traffic for half of last year’s comparable quarter but it said, this quarter’s revenue still rose 24 percent from the same quarter two years ago.

The chain’s online share of sales was 32 percent for the quarter, double the share two years ago, it said.

 

 

 

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5 Comments

  1. BBY has tried this over the last year in Metro Detroit, it was a result of losing staffing in the installation bays. In Metro markets customers are not in love with the idea of buying in one location and driving 30 minutes to have it installed. Couple that with now there is an installation issue and the customer must wait until the hub is open or available for a checkout. Bad customer experience. Dedicated 12v retailers should win this battle everyday of the week. BBY is in a tough spot and looking for an avenue to fix their 12v business, not a position I would envy.

  2. The virtual showroom/assistant thing is interesting. Similar to the virtual consultations a lot of dealers did in Covid lockdown – a hybrid format.

  3. I always thought the big box model of having install bays in every store was a set-up for failure, and after 2 decades of watching it looks like it is. The hub model makes more sense, or a mutli hub model in large cities, as this would streamline your staffing, your parts stock, and your systems and training.

    I think Best Buy is on to something, will be interesting to watch how this plays out for them.

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