The Category-Killer Murdered by its Own Sector – Tim Jeffrey 11th January 2012

It was a good idea at the time, the U.S. giant Best Buy landed in the UK two years ago and scared the living daylights out of the competition, although they denied it at the time.

Best Buy launched in a cloud of press frenzy, hype and performance expectation, in cahoots with those shrewd operators, Charles Dunstone’s, Carphone Warehouse.

The Best Buy brand has been a category-killing success in the US accounting for 19% of the market and gained a reputation for approachable and knowledgeable staff, with a twist of ‘nerdiness’ to give it a point of difference. The stores themselves had a few rough edges, not afraid to employ the odd pallet display here and there. But this added to the no frills approach and won strong customer loyalty from its target audience.

When the brand finally arrived here much was reported about it, especially the recruitment and team building methods based on their US model, prior to their Thurrock opening and subsequent rollout. ‘Happy Clappy’ to some sceptics, admittedly the opposite of the British reserved approach or full on ‘Alright mate?’ hard sell style, all grist for the mill of service expectation.

The store itself promised a relaxed ordered atmosphere and having worked for C.W. in the past, early discussions with them about the new format, indicated an honest determined commitment to make the customer journey a truly positive one.

When the store opened, much fanfare was made of its wide range of sharply priced goods, electric car and bike offers, customer service and convenience. I used the store on one of our client ‘store tours’ and was impressed by the level of service, especially when having stopped a member of staff to grill them about a product, found him fall on the final fence of delivery time. However when he told me he was security and whilst everyone in the store must have some product knowledge, he needed to call a member of the sales team.

We were impressed!

As for the store well interestingly having visited on day one and then returning year 1, the cracks were appearing. Gone were the car and wide range of two-wheeled transport, in were the louder tone of voice, and out were the high staff numbers.

So what happened?

Well I thought it was pretty good, it lacked the buzz and rush I expected to get but it ticked a lot of boxes, which sadly means that with its demise, a lot of babies are going out with the bathwater. It is a good case study in bad timing, landing as they did in the middle of a battlefield with no high ground and attacks on all fronts. They may have had clout but the competition was tough and battle hardened with the likes of Comet, Currys and in particular Argos.

But the true failure was in spotting just how tough it was going to be in what has turned into a messy commodity sector with such a big space strategy.

Again and again we witness the retail sector trying to squeeze the ‘low price’ genie back into the bottle. Sadly the only saving grace is new technologies to pump up the margin again and most retailers do not control those cards.

So we wave goodbye to our American friends, but I for one am grateful for the legacy they left the sector. They helped raise the game of standards both in presentation and service. We have benefited from their challenge to the principles of best practice as consumers and made the remaining players sharper and smarter.

There are more challenges ahead and nothing but clever thinking and five star service will do in such a demanding and difficult sector.

But for now, thanks Best Buy it was good knowing you.