January 6, 2005

Best Buy vs. Wal-Mart

Business 2.0 is profiling the unique sales culture at Best Buy and how it is being tweaked to compete with Wal-Mart. The article is available to subscribers only, but here's an excerpt:

The colder reality is that Wal-Mart (WMT) is coming. About a year ago, the retail behemoth began a massive push into the higher-end consumer electronics that have been Best Buy's most lucrative domain. As always, Wal-Mart is ruthlessly cutting prices -- the same formula that the company, with 2003 sales of $256.3 billion, has used to steamroll rivals in virtually every retail category it's ever entered.

According to the article, Best Buy's approach centers on uptraining "blueshirts" (those people you see on the floor) to focus on providing complete solutions to customer needs as a way to increase the total dollar amount of each sale. Some analysts call the strategy risky--arguing that low-level employees (who aren't paid on commission, by the way)--will not be up to the task.

I give Best Buy a little more credit than that, and Wal-Mart a little less.

As an employee of a high-end audio electronics manufacturer, I wonder how successful Wal-Mart will be in meeting its goals. High-priced electronics purchases are moments to savor for most buyers. The Wal-Marts in Phoenix metro and its suburbs are noisy, crowded, and unpleasant.

And now that I think about it, the last five trips I made to Best Buy I was personally greeted at the door and an associate in the store always asked if I needed assistance.

Posted by Brett on January, 6 2005 at 12:12 AM