With some 18,000 followers on Twitter and more than 2,000 tweets to his name, few marketing chiefs have embraced emerging media as personally as Best Buy’s Barry Judge.
“The idea that anyone can be a publisher and have a platform — all you have to be is relevant — is interesting,” says Barry, explaining his Twitter attraction.
And yet Barry’s digital embrace plainly is more business than personal. It has to be. Having outlasted Circuit City, Best Buy still faces the most daunting of rivals — most notably Walmart and, maybe most of all, Amazon.
As music and movies migrate from discs to downloads, and consumer-electronics devices grow ever smaller, the acres of retail that once were so formidable suddenly may not be so desirable anymore.
As a big-box retailer, Best Buy has no choice but to figure out how to make digital media part of its solution, and Barry is thoroughly absorbed in that challenge.
The answer does involve reducing retail bricks. Best Buy is downsizing some of its large-format locations and opening more small-footprint stores devoted exclusively to tablets and mobile phones. Success also calls for expansion in developing countries, where plenty of life is left in the big-box concept.
However, the larger issue is creating connections between these two worlds — the online and the in-store. This means a shopping experience that is neither online nor offline, but that provides shoppers with the best of both, ready when they are at all times — a seamless, holistic, integrated, excellent, non-stop shopping experience.
To call this the future of shopping may sound grandiose, but it’s not far from reality. In fact, as Barry Judge makes abundantly clear, it’s a future that’s already well underway.
Right now, nobody is good at synchronizing all of the various channels. If you start your shopping process online and you want to pick up where you left off on your mobile phone, there is no way to do that today. That’s a huge challenge.
Information and pricing transparency are also changing the game for retailers because it’s very easy to tell what the prices are everywhere. Somewhat related is the challenge of making the same promotion happen simultaneously on mobile phone, in an email, online and in the store. You really have to rebuild everything to make that happen.
Can too much focus on digital hinder the in-store experience?
If you focused on just one channel that would probably stunt the development of that channel. What we need to get after, for example, is how tablets can dramatically enhance the ability of our sales associates to get the right product for the consumer.
We train our sales associates to ask good questions, as always, but if they have a mobile device in their hands — either a phone or a tablet — their knowledge can be accelerated and the experience can be more personalized.
The tablet enables our sales associates to ask better questions, get more information and make better recommendations. We’re in the early days with that, but mobile technology offers a big opportunity to improve the shopping experience in the stores.
What’s your view of retail stores as a medium for brands?
In many ways, Best Buy is a “brand of brands” because we provide a way for people to experience so many brands, to physically touch them and see how they work. Our physical locations help educate consumers and viscerally experience the brands we sell.
So, we are very important for manufacturers in terms of helping them build their brands. We do that through the way our displays look, the training that we do and the advertising we do in concert with our manufacturers.
In the last 18-months or so we’ve also built out Best Buy On, which is a media network in which we deliver proprietary content. We will allow both our partners as well as other brand marketers to advertise on our network.
How does that work?
We’re using screens that already exist in the stores — TV screens and computer screens. We’re also putting screens in different parts of our store — mobile phones, tablets and cameras. We will eventually build out the entire store with screens and segment advertising to appeal to people in different sections of the store. We’ll do the same thing online, on our website.
How does retail compare to television as a medium?
The advantage of retail is that it’s a medium where you can touch and feel as opposed to just telling people about the product. At retail, people can actually experience the product.
When consumers go to one of our stores or venture to our website, they’re typically in the purchase funnel. On television, you don’t know where they are; they might be in purchase mode or not.
At retail, you know the consumer is interested in buying and you can tell your brand story in a more content-rich way than you can with a 30-second television commercial. You do need television advertising to drive interest in your products, but retail is where you complete the story and make the sale.
What did you learn from running a Super Bowl ad?
We had a good story to tell with our new buy-back program, where consumers can either trade in or recycle a previous purchase, which is a very powerful concept. We knew we had something with that and we were pleased with the energy that our system got from advertising during the Super Bowl.
I think we could have spent more time really understanding how the buy-back program comes to life in the customer experience. It isn’t something that jumps off the page, like a brand new television or an unbelievable new iPad. It really comes through best in the customer experience in the store. That’s really the opportunity for us.
Is Twitter as attractive today as when you first discovered it?
I am very enamored of social media and was eager to learn about it a few years ago by just jumping in and understanding how it worked. I’m fascinated with how information spreads today, and how you can learn about things in a different way than through the established media.
The ability to scale your communication to people you wouldn’t normally be able to talk to is valuable. Within Best Buy, it’s a way for me to communicate what I’m trying to do, or what my group is trying to do, and the reasons behind that. I’ve found Twitter to be a very powerful way to jump levels and get to people I wouldn’t normally get to, and get information back from them.
On a personal level, I’ve found it takes up a lot of time. Maybe as a person I find myself more talkative or less talkative at times. Now that I think I understand it, which was the number-one driving force when I first started using Twitter, I use it more in waves, whenever I have the time.
Why haven’t more marketing chiefs embraced social media as personally as you have?
Now that it’s become so mainstream I do wonder. I think at first it was scary and people didn’t know if it was worth their time, whether there was any point in it. There was a lack of interest.
But now that it’s relatively mainstream, I think that potentially people are concerned about communicating information that they don’t want people to know. They prefer to be less transparent for reasons personal to them.
Are there opportunities with social media that most people haven’t seen yet?
Clearly there’s an opportunity in social media and retail because we are trying to get feedback from people about our experiences all the time. We want them to call us. We want them to go to our websites. Social media is a way to scale that opportunity.
That was always the thing I saw clearly. People are complaining or talking about the retail experience all the time. As they’re having that conversation, why not just respond to them about it?
If we know that people are talking about Best Buy on Twitter or Facebook, why don’t we get back to them? Why don’t we encourage them to call us? That was the idea behind Twelpforce. We want people to come to our stores and ask us questions.
For a retailer, it’s pretty obvious that there is at least a customer-service opportunity. If we also can figure out how to do better marketing or how to engage consumers in different ways, we should go for it.
The struggle we all have is how to do that effectively, quantify the value, and the return-on-investment. But from a retailer’s or a marketer’s point-of-view, it’s a no-brainer. You want to engage with consumers, you want to talk with them — not at them. Social media is the place to do that.
What is Facebook’s potential to improve the shopping experience?
The feedback we’re getting through Facebook is improving the shopping experience. We’re hearing all the comments, both positive and negative. There are lots of opportunities in terms of buying, but we haven’t figured out what they are yet. Using the power of Facebook’s platform to enable group buying is a big opportunity.
Is email marketing as effective today as it was five years ago?
I don’t know how effective it was for the industry five years ago versus now, but it’s more effective for Best Buy now than it was then because we’re much smarter about personalizing messages. I mean, it pays out like crazy. Email is our most effective channel from a return-on-investment standpoint because it’s our most personalized channel.
We have a pretty good idea what people are browsing, what they’ve bought, what they might buy next and what their purchasing frequency is. So, we can customize and tailor messages based on all those factors. That makes email advertising the most effective because we can’t do that as well on any of our other vehicles.
Over time, I think email will become less effective because younger people tend to email less; they’re texting more. But it’s very effective right now. There’s still a lot of purchasing power in email.
What’s the biggest risk that you’ve taken with social media?
I don’t know what’s risky about it from a brand perspective. You try things in social media and it works or it doesn’t work. If it doesn’t work, is that risky? I don’t know if anything we do is that risky in marketing in general. It either works or it doesn’t work.
On a personal level, putting yourself out there, having opinions and taking stances on things is risky because people can disagree with you and criticize you. You take shots. You expose yourself. I guess that’s the same thing for a brand. You have a presence and you invite people to have opinions about you — that’s risky. But they have them anyway, so that’s why I don’t think it’s that risky.
Do you have any favorite apps?
Favorite apps? I’ve got lots of apps. My phone is in my hand so much it kind of hurts me. It’s literally sore. I like Twitterific. I’ve got RedLaser. I’ve got Shopkick. Of course, I’ve got the Best Buy app. I’ve got so many apps I don’t know what to do with them all.
How do you relate to Best Buy shoppers? Are you one of them?
I am. I’m not sure how I became this way. I’ve been at Best Buy for 11 years and can’t remember whether I was the same way before then. But I have a number of the latest televisions. I’ve tried 3-D televisions. I’ve got an iPhone 4 and I own an iPad 2. I’ve got a 3-D camera.
I love this stuff. I love the possibilities for what it can all do. It’s part of my personal life. But I have to constantly remind myself that our business is pretty mainstream and that not everybody is looking for the latest and greatest technology. Sometimes I have to pull myself back a little bit and think about the mainstream versus the cutting edge.
How would you describe the spirit of the Best Buy shopper?
If we look at our best customers — the seven or eight percent of the population that does 35 to 40 percent of our business, they are just like me. They love what technology can do for their life. They want to connect better with their friends and family, be more productive in their work and personal life and have more fun, watching movies and listening to music. They see technology’s ability to make their life better. That would be the best Best Buy customer.
However, the fact that we are so big means that we appeal to lots of different kinds of consumers — those who are looking for a great deal, a low-hassle experience, or who want to make sure that they have seen a full range of choices. When you have as big a share as Best Buy, you really can’t have a typical consumer; you have to be able to appeal to different kinds of consumers.
How did selling electric scooters fit into that scenario?
Best Buy has been around 44 years and we are constantly looking for new categories and growth spaces that can stretch the brand. Typically, those spaces have some sort of technology or entertainment angle to them. That’s where our value proposition of unbiased assistance, good assortment, low prices, and service that will help you make it all work comes into play.
We thought scooters could work. Maybe we were too early there. Maybe we didn’t have the assortment authority we thought we had. Maybe we didn’t focus on it enough. Any one of those three factors could be the reason for pulling back on it.
But we will always be looking for new categories. In a lot of ways, mobile phones is a relatively new category for us. It’s our biggest growth driver right now. But we weren’t always in mobile phones, so it’s a testament to why we need to keep looking and figuring out areas where we need to invest. Scooters didn’t work, but mobile phones did.
The rumor is that you’re working on a car with Ford.
We’re working with Ford on technology in a car, but we are not working on a Best Buy car. People bring all their technology into their car and we’re definitely working on that.
What have you learned about retail from your travels overseas?
That depends on whether it’s a developing country like India, China or South America — those are very different in terms of how you go-to-market versus a developed country. Big-box consumer electronics is a very powerful model in developing countries because they are building lots of homes, they’re moving around and incomes are rising quickly.
There’s a voracious appetite for consumer-electronics products in those markets that mirrors what it was like ten or 15 years ago in developed countries. What you have to consider when you’re there is that the average income is a lot lower, so you need to be focused on price points.
In developed countries, the challenges are Apple, internet retailers, and slower economic growth. It’s more about mobile and the pockets of technology that are driving growth. Mobile tablets are the biggest technology that we need to be focusing on, and how the combination of small-box and big-box stores works together.
Best Buy Mobile, our small-box chain in the United States, will grow to 300 stores this year and hopefully close to 800 stores in a couple of years. Small-box is how we sell mobility products like tablets, phones and laptops. We are using our small-box and big-box stores to build a compelling pick-up option for online commerce.
Have you seen any interesting concepts in your travels?
There’s a concept called Pixmania, which is in France. It’s a small-box format — maybe 2,000 square feet. It’s essentially a place where consumers can order products and have them shipped either to the store or to their home. It’s kind of a variation on what we’re doing at Best Buy.
It’s pretty interesting to try to take advantage of convenience from a small-footprint perspective, but that also has the online/offline fulfillment option. Pixmania is very interesting from a “new ideas” point-of-view.
Between small-box and big-box, where are the greatest opportunities for growth?
For Best Buy, and for our industry, the right spaces right now are mobile devices, and there will be lots of innovation in that space. Mobile works in big-box, but it can also work in the small–box format because you can have a dominating assortment in a smaller space.
That’s really the genesis of Best Buy Mobile, and we are seeing significant growth in that area. Our value proposition of having all the phones and tablets in one space, and providing unbiased assistance to get you what you need and setting it up in a single location doesn’t happen in a lot of places. A carrier store can’t do that, but we can.
As we knit together the small-box and the big-box formats, we suddenly have lots of points-of-presence in the marketplace that will enable us to drive the second growth pocket, which is e-commerce. That is a big growth pocket for the industry.
What is the most exciting thing happening at Best Buy right now?
The most exciting thing is smartphones, mobile technology and tablets because it’s changing society. I was at a going-away party last night at a restaurant in Minnesota, and out of the seven people at the bar, three had tablets open and the others were all looking at their phones. I’m not sure it’s always a good thing. But it’s exciting to watch what’s happening with manufacturers. There is so much at stake.
Helping people experience all of what’s happening in mobile, smartphones and tablets is exciting. How do we make that come to life in our shopping experience, both online and in stores? How do we integrate mobile technology into the shopping experience?
As the broader technology eco-system slows down, how do we make sure we continue to grow? How do we drive the emerging opportunities faster in tablets and mobile phones?
How do we ensure our small-box opportunity gets as much attention as our big-box opportunity? How do we find new categories to drive our growth? We have to keep looking on the horizon for new categories that can provide good growth.