Why Best Buy's Betting On Customer Service

Retail chain Best Buy is betting big on customer service to keep its stores busy and beat competition from the likes of Amazon.

Retail chain Best Buy is betting big on customer service to keep its stores busy and beat competition from the likes of Amazon.

The company's renewed focus on retaining sales from customers entering its doors comes as it faces mounting pressure from declining sales of computers, mobile phones and accessories — a set that accounts for half of Best Buy's revenue. The company reportedly saw a 3.5 percent sales decline in that category, but increased sales of wearables helped offset a big loss.

The company is also revamping its customer outreach with a legion of tech support specialists who provide on-site support to around 5 million homes, Fortune reported. In addition, the company is offering customers product installation services and is improving on its stock of smart home products.

“The pace of innovation [in tech] is very extraordinary, but for the customers, it’s a bit confusing knowing what to buy,” said Best Buy CEO Hubert Joly in an interview with Fortune. “There is a growing gap between what technology can do and what we as consumers understand what technology can do.”

Best Buy is also betting on driving engagement through in-store special areas for tech companies such as Apple, where customers can get exclusive presentations and services. One such recent initiative is with the Oculus Rift, the virtual reality headset. Best Buy will soon be the only American retailer where customers can try on the headsets.

This, Best Buy believes, will cut through the stiff competition it has been facing from Amazon, which banks on faster delivery and easy returns. To further its effort against rival eCommerce players, the Minnesota-based company is investing big on improving user experience on its website. Its online sales reportedly improved by 24 percent last quarter.

Despite fears, Best Buy seems to be doing better with its extra efforts on standing against other eCommerce competitors. In the last quarter, the company's U.S. comparable sales fell only 0.1 percent compared to the 1.2 percent predicted by Wall Street analysts.

However, the company is finding itself in yet another tough spot. According to Fortune, Best Buy CFO Sharon McCollam is saying adieu to the company. McCollam is credited with making tough cuts in the company and helping Joly reinvigorate the company's tepid growth.

The market is not responding well. The company's stock took a major hit as the news came out earlier this week.

Nonetheless, Joly is rooting for the company's new customer service-oriented strategy and is hopeful that it will considerably turn things around.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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