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Best Buy Confronts Omni-Channel Challenges

Retail giant increases B2B focus to overcome awareness problem

May 9, 2012 By Jeff O'Heir
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Best Buy’s efforts to develop an omni-channel approach to the customer experience present a strong case study of how an industry giant is confronting one of the most important and difficult challenges CE retailers face today.

At Aberdeen Group’s recent retail and consumer markets summit, Retail on Broadway, David F. Cook, Best Buy’s director of IT systems strategy, spoke about the retailer’s successes and tribulations in creating an omni-channel, which is aboutoffering a seamless consumer experience across all of a retailer’s shopping channels, including mobile devices, computers, physical stores and smart TVs.

“We’re listening to the customer and the biggest thing they’re demanding is omni-channel solutions,” Cook said. “They don’t want to enter their data in 20 different places. And they want us to know who they are, where they are andwhat they want. They want to be served the best possible way.

“The omni-channel challenges we have are not unique to us, but they are massive,” he added. “If we don’t listen to the customer, we’re not going to be able to serve them.”

The omni-channel is an evolution of yesterday’s multi-channel strategy in which retailers augmented in-store sales with e-commerce and online marketing initiatives. But for many retailers, including Best Buy, one of the biggest challenges they faced in that endeavor has carried over to omni-channel: convincing all of the sales and marketing teams to work together for the betterment of the entire company, not the individual.

“We had a huge, huge problem 20 years ago with the online site. The stores saw it as cannibalization: ‘You’re taking my customer and now I don’t have that revenue stream,’ Cook said. “The challenge was about who gets credit.”

After conducting research into its customers’ buying habits, Best Buy discovered that 78 percent of every transaction that happened in the store originated with online research, Cook said. “It’s the same transaction, it was just omni-channel. That was a big breakthrough for us,” he said, adding that the research helped Best Buy employees understand that omni-channel wasn’t about in-house competition but about company-wide fulfillment.
 

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