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Susan Wilkins Director, Customer Marketing & Strategy Best Buy

Susan Wilkins Director, Customer Marketing & Strategy Best Buy. Inside Best Buy: Reshaping Retail. Best Buy enterprise. BBY U.S. Best Buy Stores 872 Stores Magnolia Audio Video 13 Stores; 300+ In-Store Geek Squad 7 Stores; 872 Precincts Best Buy Mobile 46 stores/store within store.

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Susan Wilkins Director, Customer Marketing & Strategy Best Buy

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  1. Susan WilkinsDirector, Customer Marketing & StrategyBest Buy Inside Best Buy: Reshaping Retail

  2. Best Buy enterprise BBY U.S. Best Buy Stores872 Stores Magnolia Audio Video13 Stores; 300+ In-Store Geek Squad7 Stores; 872 Precincts Best Buy Mobile46 stores/store within store International Best Buy Canada/FutureShop48 Stores/125 Stores Geek Squad49 Precincts BBY Asia Offices3 Locations: Beijing, Shanghai, Shenzhen China Stores1 Store Five Star (China) 136 Stores in 34 Provinces Other Concepts

  3. A Look Back at the Brand’s Evolution • Product & Price Late 90’s • Connected Products • Customer Solutions • Customized Solutions Now Future Relationships

  4. Understanding our customers from different angles Age + Income + Location Upscale suburban - Middle America - Urban Trend Setters How do they want to shop? Like It or Hate It – Face to Face or Online – Service or DIY – Price Sensitive Who are the most passionate? Enthusiasts – Early Adopters – Brand Loyalists Customer Data What products they can’t live without? Need vs Want products – “Anchor” categories What gets them into the market? Trigger events – LifeStages – Purchase Paths What is the REAL need? Escape – Connect with Family & Friends – Organize My Life

  5. Inspired Lives For • Aspirational Badge for customers. • Leader • Personal, individual: Centricity Manifested • Modern, cool, leading edge aesthetic. • Expands into a variety of product/service categories as long as it supports an aspirational lifestyle. Brand Value Proposition Trusted Perspective • Uniquely Objective/ Broad perspective on T&E. • Knowledge of how things are going to work just beyond consumer’s view. • Re-assurance in a stressful category. • Optimistic outlook/ Future focused. • Integrates manufacturer’s visions on macro level. • Integrates/personalizes on micro level.

  6. Best Buy Brand Value Proposition • 4. Radical Support: With You • All The Way • You know with certainty you are never alone • and we’d never steer you wrong • ex. Exclusive online access to information, live phone & online support, dedicated representative assigned to you • 1. Connections: We > Me • Understanding and knowledge - leveraging the collective wisdom of 150,000 to inspire, coach and mentor • Ex. Certified, trained and available associates within arms reach Trusted Perspective For Those Pursuing Their Life Passions • 2. Stimulating Shopping • We’re in the business of “retailtainment” - we want consumers to come and play - touch, feel, ask, try, etc. • ex. “Look into the Future” display area that displays product not yet ready for market • 3. Inspired Experiences • Best Buy is THE destination for the technology-enabled experiences that customers crave - if it is worth having / desirable you better believe Best Buy has it! • ex. Exclusive latest and greatest productsand experiences not available anywhere else

  7. Entering the China Market

  8. Entering the China Market

  9. What Chinese customers are saying … After Sales service and Speedy Delivery are fundamental requirements for all CE customers and yet our competitors have not achieved these successfully.

  10. What are we going to be famous for? FUN EXPERT EASY

  11. Segmentation Strategy in Shanghai Household Income (RMB/Month) 3000 4000 5000 6000 7000 8000 9000 10000 20 25 30 35 40 45 50 E-Generation target Sweet Spot Young Families Opportunity Easy Life Target Age Drifters Aspirers Older Families Contented

  12. Four distinct clusters of customer needs Performance Assured 28% Glamour 26% No Frills 29% Bang for Buck 17% Status and Quality Trust Wide Range Up to date Products Stable Environment After Sales service Basic Store Staff Appearance Service and Surroundings Easy Status and Quality Service and Surroundings Impactful Design Reliability Price & Promotions After Sales Trust Technical Staff Test with Detailed Explanation Orderly and Helpful Important Price and Promotions Trust Speedy Delivery Low Price After Sales Service Most up to date products Status and Quality Unimportant Service and Surroundings Home Shopping Customisation Impactful Design Status and Quality

  13. What we have learned so far… • Our customer promises will be built around three unmet needs, i.e. after sales, speedy delivery and test detail • The customer promises will be communicated through three banners: easy, expert and fun • We have identified Easy Life and E-Generation to be our target segments • We will be unique at serving these two segments by fulfilling their needs for Glamour and Performance Assured

  14. Current Tactics: Financial Services • Partnering with HSBC/Bank of Communications to provide a general purpose credit card for Best Buy • no interest/no fees installment plans on BBY in-store purchases • reward points redeemable for catalog merchandise • Free gifts for applying and activation • Different customer dynamics require a different program than the US • Relatively new credit industry • Traditional value to save for purchases rather than use credit • Education on credit products is required to help consumers understand the benefits • Growth Plans • Government regulation on bank ownership and approved programs play a large role in determining what is possible • Co-branded BBY credit and debit cards

  15. In-store Kiosk for Financial Services

  16. Current Tactics: Loyalty Strategy • Preferred Customer program for customers who have attained a high threshold of spending • Access to special services, events and personalized assistance for VIP customers • Different customer dynamics require a different program than the US • Personalized treatment is expected • General all-inclusive loyalty programs are not as developed or expected in the China market at this time. • Plans for growth • Create a tiered loyalty program with spending/frequency thresholds and increasing personalized and exclusive benefits • Increase percentage of marketing spend we allocate to building and retaining loyalty

  17. In closing • Understanding our customers has been a journey in the US • Customer centricity is a foundation for global expansion • Early success in China • Future global expansion • Mexico • Turkey

  18. Thank you

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