New Best Buy stores hone in on demographics

DSN Retailing Today, August 16, 2004 by Laura Heller

NATIONWIDE DSNRT REPORT--Best Buy has received many accolades for its still-in-progress Customer Centricity initiative. But while that program is getting all the press, the company has quietly unveiled a new prototype that seeks to target each of Centricity's customer segments, all in a single store.

Centricity focuses on four core customer segments: Barry, an upper-income professional; Buzz, a younger technology enthusiast; Ray, a middle-income family man on a budget; and Jill, the soccer morn. The initial 32-store test identifies segments in each store's market and implements merchandising and sales tactics to target the appropriate groups.

Located in West Hollywood, Calif., this store doesn't differentiate, but rather incorporates elements to reach each segment simultaneously. It's like Customer Centricity on steroids, according to sales manager Fabian Meza. "We're not segmented for any one of them. We're putting each one to the test and seeing what works best," he said.

Immediately upon entering, customers sense that something about this unit is different. Softer somehow, smaller and less hectic than a typical Best Buy, although the unit fits the company's 45,000-square-foot average size. It's all part of a plan to make the store homier and more inviting, appealing not only to Jill, but women in general--a demographic Best Buy is actively courting, according to Fabian.

Gone is the black-and-sliver signage replaced with lighter blue-on-white lettering. Screens hide inventory stocked high along the walls and everywhere is lifestyle images depicting people using technology in their daily lives, rather than the products themselves. With lower ceilings and blaring TVs are kept to a minimum, the atmosphere seems cozy.

In the center of the store sits the Media Hub, complete with an audio/video setup in a living room area visible from the entrance. Departments radiate outward from the hub in a wheel-and. spoke layout. Entertainment and gaming occupies the hub, and software, game consoles and accessories flank the demonstration center. Selling attachments is the goal here, said Meza. "We can convert a buyer xBox or PlayStation 2 to the whole system," he said. A nearby top shows how to wirelessly with the system and personal shoppers for garners lead the consume] through all available options and services.

It's a theme re throughout the store. The company's Geek Squad a designated area with signage informing about computer repair home services. The computer department showcases business solutions with a wider variety of notebook models than traditional stores, each available to be picked up to actually feel the weight and portability.

Home Entertainment features living room setups to showcase the entire experience, and mobile entertainment products are showcased with speakers and amplifiers. Interactive displays in home audio allow consumers to select components, experience them live and identify optimal locations within their homes.

An image lab offers full photofinishing services in addition to countertop digital image stations that send orders to the service desk for professional printing. By eliminating the self-service component of many digital imaging kiosks, "We can explain image quality," said David Grover, a store sales counselor with the title of "entertainment professional." "This setup allows our technicians to school customers," he said.

Computer conversions are a big focus, with several stations set up to better show consumers how to edit digital images and home movies, download digital music files and transfer songs to portable devices. Each demonstration is in a separate vignette. In order to accommodate so many new vignettes and displays, the store features slightly narrower aisles.

Appliances receive the royal treatment here, with high-end configurations displayed in model kitchen environments. Setups include product from other departments in the store, such as notebook computers and flat-panel displays. "We're trying to get consumers to cross over into appliance sales," said Grover. Using other technologies, such as notebook computers, to pull up recipes for favorite foods "shows the consumer what's possible [by] using technology in the kitchen," he said. "Asking what customers like to cook or eat leads to product recommendations, like a convection oven or a heavy-duty dishwasher for greasy foods. The point is to maximize the sale."

An hour's drive south in Costa Mesa is yet another test for the retailer: A Magnolia Hi-Fi store within a Best Buy. The company purchased Magnolia in 2001 to expand its exposure with high-end audio/video enthusiasts. The concept has expanded slowly, but with the opening of two store-within-a-store concepts earlier this year (the second in San Francisco), the company may have found a new way to offer higher-end goods.

Signs on the outside of the building identify the Magnolia location inside as Magnolia Home Theater, and the department is located in the rear of the store with signage clearly visible from the entrance. This nine-year-old store is also a Centricity test unit, serving the higher-end Barry demographic. And at 56,000 square feet, there is plenty of room to add all the new displays and the Magnolia concept.