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RICHFIELD, MN-Best Buy plans to accelerate the rollout of its "customer centricity" approach with the conversion of at least 150 to 200 stores in 2005, says Alan Rifkin, a securities analyst with Lehman Brothers.
The locally based consumer electronics retailing giant also will expand its services, including Geek Squad and home theater installation, as well as boost employee retention with practices learned from the centricity model, add individualized marketing better tailored to specific markets, and simplify internal processes to boost efficiency, Rifkin says.
As of the start of last month, 45 Best Buy stores in 12 cities had expanded their product and service levels and added the Magnolia Home Theatre store-within-a-store, bringing the total number of customer-centric stores to 120.
The stores with the customer focus average $1,000 per sf in sales, more than 17% above the $850 per sf it does at its "non-centricity" stores, Rifkin says. "Best Buy's operating model is no longer product-centric," Rifkin says. "The company will align its business with the interests of its customers."
The company's segmented stores cater to five different segments: The affluent customer, the young entertainment enthusiast, the upscale suburban mom, families that are practical technology adopters, and small-business customers, Rifkin says.
"For example, Best Buy's segmented stores that cater to the time-starved suburban mom offer a personal shopping assistant that gives the customer time and treats them with the respect that the customer often did not receive in previous visits to consumer electronics stores," Rifkin says.
The conversion of at least 150 to 200 stores this year will bring the total number of segmented stores to at least 250 to 300 stores. Rifkin expects a full rollout is likely within three years. Best Buy Co. has more than 840 stores in the US and Canada.
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