Dive Brief:

• With uneven consumer demand, Best Buy is leaning on in-store and at-home experiences to help it maintain its market share. An emphasis on associates is central to the retailer’s strategy,  CEO Corie Barry said last week during its Q3 fiscal year 2024 earnings call. 
• Higher-than-expected home installation volumes contributed to better-than-expected income, according to Barry. The retailer is leaning into new avenues for its tech experts, such as becoming an authorized Apple service provider, to drive growth in this area.
• Loyalty also contributed to the retailer’s results. Sign ups for paid tiers, which offer perks ranging from extended return windows to 24/7 tech support, rose 35% year-over-year in Q3, reaching 6.6 million members. Retention was higher than expected.

Dive Insight:

Best Buy is doubling down on efforts to deepen relationships with its customers as it revamps stores and cuts costs to fight a years-long downturn in electronics sales. The company is aiming to keep expenditures down without cutting the associates that drive its experiences.

“As you can imagine, there is a delicate balance to maintain while we adjust our store operating model as the expert service our associates provide customers is a core competitive advantage,” Barry said during the call. “We keep a very close watch on our customer satisfaction trends to make sure we are not negatively impacting the customer experience.”

One area where Best Buy is following customer behavior is in adjusting operational needs, including the introduction of a flexible approach to staffing levels. This has kept labor costs steady as a percent of revenue despite declining sales.

Reductions to staffing during quieter times of the day has not impeded the customer experience, according to Barry. Best Buy’s NPS for associate availability, product availability and pricing are all on the rise.

Maintaining an employee base that can power the customer experience requires a range of investments. These efforts include a certification process focused on delivering retail excellence, as well as options that can qualify workers for behind-the-scenes operations roles to improve flexibility.

The Solution Sidekick app offers associates guided selling assistance across all departments and channels. Customer NPS are higher for interactions that utilize the app, according to Barry.

Best Buy’s investments have reduced churn among employees. The average field employee has been with the company for just under five years, while the average general manager’s tenure is nearly 16 years.

“This is crucial, as we can directly tie tenured experience and training certifications to NPS improvement over time,” Barry said.

Best Buy is also investing in its omnichannel support capabilities, including phone, live chat and virtual store interactions, to drive higher conversion rates, Barry said. Best Buy’s virtual stores hosted 140,000 interactions with associates via video chat in Q3 alone.

Associates play an important role in the highest tier of Best Buy’s loyalty program. My Best Buy Total, which costs $179.99 annually, includes 24/7 support from Geek Squad across all channels.

“We have what we like to call human-enabled services,” Barry said. “So we can help you in the store. We can consult you in your home. We can repair. We can take back. We can trade in… We just have a huge end-to-end variety of solutions all the way from inspiration to support.”