Two new Best Buy off-shoots build on Centricity

DSN Retailing Today, Dec 13, 2004 by Laura Heller

CHICAGO -- That Best Buy has been testing new formats as part of its Customer Centricity program is no secret, but the chain recently opened two new stores that it not only managed to keep secret, but that don't even bear the Best Buy name. The "studios," as management is calling them, offer a peek into the learning process of the CE specialty chain as it looks for future growth opportunities.

Escape is a getaway for technology enthusiasts, mainly young, professional males. Located in Chicago's Lincoln Park neighborhood, the area boasts both college students from nearby DePaul University and a seemingly limitless supply of 20-something young professionals, all of whom Best Buy believes to be among Escape's target demographic.

The 3,500-square-foot store displays cutting-edge technology, some of which is available in the United States only at this one location and provided through a partnership with Chicago-based Dynamisn, which specializes in scouting out and importing new products from Japan.

On display here are open architecture slim line cell phones, bluetooth enabled PDAs and digital cameras otherwise found only in Asia. Pair them with a Ferrari notebook computer, Linux-based PDA's from Sharp, Rollei Flex Mini digital cameras and an extensive selection of Apple products including the special edition U2 iPod and accessories, and it's a gadget lovers paradise.

But Escape is meant to be a haven for gamers too. Four interactive "game pods" feature the latest platforms and games, a home theater set up provides the ultimate living room experience and two "sky boxes" are available for private parties to watch sporting events on the latest big screen in surround sound; catering services available upon request. A cafe also sells non-alcoholic beverages, snacks and sandwiches.

While many of the products at Escape can also be found at a regular Best Buy store, the approach here is different. Memberships can be purchased for $10 and rewards are given for more than purchases. Participation in community events and social groups geared toward young professionals will yield points while Escape will focus marketing efforts on such partnerships and community participation.

"We are not looking to cannibalize or incrementalize Best Buy's business," said Julie St. Marie. "We are looking for a truly different way of engaging the consumers and creating an experience."

A second concept Best Buy is developing in the market is Studio D, located in Naperville, a small community outside of Chicago, considered to be among the best places to raise a family in the Midwest. The goal of this format is to demystify technology and provide women with a place to learn, experiment with and buy products and services. "It's not a secret that many women are uncomfortable shopping in the larger box stores," said Pat Wagner, general manager.

The roughly 5,000-square-foot store features wood flooring; light, neutral colored carpeting; light wood displays; high ceilings and ambient lighting. Music volume is low and unlike most electronics stores, video and audio displays are on mute. Three separate areas function as classrooms and work areas for customers when not in use, each outfitted with a conference table and notebook computer at each seat.

Like Escape, Studio D is promoting itself through community events and affiliations. A lounge area near the store entrance features revolving displays of photos taken at community events then processed and put together by customers.

According to Best Buy executive vp, James Damian, both projects were begun long before customer centricity, but that effort gave the studio projects a boost. Escape and Studio D are designed for customer segments identified and targeted by the centricity test. A third studio concept, eq-life, is set to open early next year in Minneapolis. The format also targets women but focuses on those in a caregiver role, with home health, pharmacy and salon services.

Both Chicago stores are tests, emphasized Damian. They operate independently of the Best Buy structure, using different store systems "It's like grassroots all over again," he said. "This company can afford to invest in innovation and research and development, just like other [types] of companies. We are trying to build something that could be a division, a brand, which will equate to profits."