Best Buy Makes The "O+O" Integration Strategy. The Strategy Divides Into 3 Points In 2014.

Best buy's physical store strategy is highly relevant to online strategy. In fact, she is using the line to promote offline sales and line down service line needs.

After all, its main rivals are WAL-MART, Amazon, Taghit and good market.

Online and offline integration is the core means to win competition.

Sales amounted to $40 billion 300 million, gross profit of $9 billion, net profit of $1 billion 200 million, which is the result of Best Buy's surrender in the 2015 fiscal year (February 2014 to January 2015).

In spite of sales and gross profit, best buy declined slightly, but net profit increased by 132% compared with the 2014 fiscal year.

Taking "Expert Service (Unbeatable Price)" as the purpose of "unmatched price, providing consumers with expert services (Unbeatable Price)", best buy put the two words of "online" and "entity store" into strategy, emphasizing the unparalleled full channel experience for customers, that is to say, this is not only a O2O, but also a "O+O".

In a letter to shareholders issued in April 13, 2015, Hatim Tyabji, chairman of best buy's board, attributed all this to the Renew Blue project. In his letter, he wrote, "since the beginning of the Renew Blue project, consumer satisfaction has been greatly improved."

The Renew Blue project has been launched since the autumn of 2012. Its core concept is to refocus the consumer experience.

Up to now, in the consumer loyalty scale, best buy's net recommended value (Net Promoter Score) has increased by 450 basis points.

Analysis of retail Wei observation

Best buy's strategy in 2014 can be summed up in three points:

First, guarantee the competitive price in the store, and provide one-stop service, consultation and experience for consumers.

Second, we can enhance consumers' network experience through better search services, online product information and navigation, and faster logistics distribution.

Third, through online and offline integration, "shop matching mode" to fight against electricity providers.

Offline: one-stop service

From the point of view of physical stores, best buy's idea is to "store store-within-a-store", that is, through cooperation with big brands such as Samsung, SONY and apple, it will be introduced into best buy shop.

At the same time, we should increase the training of sales representatives, and provide them with professional services and consultation, thus forming a differentiated experience.

This is part of its strategy. According to Hubert Joly, chief executive of best buy, "we hope to enrich the life of consumers through technology. We hope to inspire everyone's potential and arouse everyone's" giant ".

The core of this strategy is to provide consumers with advice, service and convenience while providing competitive prices.

Of course, this is only the first step.

Introducing operators

In the United States, sales of mobile phones account for 48% of the total sales of best buy. For this type of goods, best buy has found that many consumers need to do business with operators besides buying mobile phones.

Thus, in the first quarter of 2014, best buy introduced two operators of Sprint and Verizon, and in the second quarter, best buy introduced T-Mobile again, so the three major mainstream telecom operators in the United States have all been in best buy, and best buy has become the first retailer in the United States to assemble three operators.

Because of this one-stop service, consumers will buy mobile accessories in the shop besides buying and purchasing cards, which is the source of ultra-high gross profit. Best buy even collaborated with all kinds of fashion designers to launch the best brand of mobile phone accessories, and further expand the profit point.

From the data point of view, the sales of best buy per square foot increased from 781 US dollars in 2012 to US $869 in 2014, which also reflected the success of best buy entity store strategy.

Online and offline price matching

In addition, price has become a big tool for Best Buy: especially for highly standardized electronic products.

Best buy's strategy is to provide Low Price Guarantee both online and offline: when consumers find lower prices in other physical stores or e-commerce sites, they can "report" to best buy customer service. Once verified, best buy will adjust its price.

At the same time, consumers within two weeks after best buy shopping, if found that the price of this commodity decline, you can go directly to the physical store to compensate for the difference.

Through these two "low price strategies", consumers do not have to turn to other competitors because of price, or even effectively attack the form.

The electric business enterprise.

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Just as traditional supermarkets attract consumers to stores through low margin commodities, they induce consumers to buy high Maori commodities through exhibitions.

Best buy stores also use this theory. For her, highly standardized phones are "low margin goods", and the matching services and mobile accessories become "high margin commodities". Compared with traditional supermarkets, best buy as a franchised store is more likely to realize differentiation through experience, which is also an important guarantee for the success of the "one-stop service" strategy.

Online: Reshaping experience

Best buy's online sales have been improving. Its annual data show that in fiscal year 2013, its online sales account for 7% of total sales, compared with nearly 10% in fiscal 2015.

Consumers are getting more and more information about goods and information through the Internet. "Despite the low volume of stores, the marketing conversion rate and online passenger traffic have been greatly improved. I owe it to our Renew Blue strategy," CEO said.

From the data point of view, in the third quarter of 2014, best buy was in the United States.

Sales reached $601 million, an increase of 21.6% over the same period last year.

Best buy's online experience comes first from its member project, "My Best Buy", whose slogan is "more awards, more exclusive, more mobile More (More Reward, More More, and More Mobile)".

Facing consumers directly

For its 50 million members, best buy reshaped its online experience through email and mobile experience.

On the one hand, best buy in the shopping season sends thanks to the customers who are shopping, and presents a mobile terminal, a PC ski game and a link in the mail.

Through these, customers not only know their current membership scores, but also know the free distribution service of members, which lays the foundation for later "shop matching", and when customers play the game, they can also share the results on the social network.

Introduction of big data analysis

In 2014, best buy also introduced the big data system "Athena Project", which provides personalized recommendation to consumers through purchasing records and browsing records of consumers.

At present, this project is mainly aimed at gift giving, important activities (such as wedding) and just moving customers.

"We are still in the primary stage, and we still need two or three years to go further," CEO said.

Mobile terminal experience upgrade

On the other hand, from the mobile end, best buy has upgraded the user interface, providing more consumer information for research, and providing real-time advisory services. After all, consumers need more than just a faster underground order function, and 3G and 4G networks with unlimited traffic also make all of this possible.

In view of the fact that consumers usually use multiple devices to log on to the website, best buy not only provides PC end user experience, but also mobile terminals and APP terminals, and customers can even get information about the characteristics and evaluation of commodities through SMS.

In addition, the related updates include enhancing the function of Wish List and quick settlement functions.

At present, customers can clearly understand the time of receiving goods, rather than the traditional "5 to 8 days".

"Shop matching" to achieve "O+O"

Best buy's physical store strategy is highly relevant to online strategy. In fact, she is using the line to promote offline sales and line down service line needs.

After all, its main competitors are top retailers such as WAL-MART, Amazon, Taghit and good market. The integration of online and offline is the core means to win competition.

Consumers do not like to wait. The Amazon Prime, which is led by Amazon, allows customers to get goods in the shortest 2 days, which is a great challenge to physical distribution. The best response strategy is to store the store as a distribution center.

In 2013, a total of more than 400 shops of "best buy" became "shop distribution centers", and by the end of 2014, this number had reached more than 1400, accounting for 97% of the total number of shops.

The core idea of this "shop Distribution Mode" is that consumers can pick up goods at the nearest store after ordering online, and can wait for the nearby shops to deliver directly to the home.

The system works well. Data from online retail store comprehensive evaluation website StellaService show that the average delivery time of best buy is shortened from 5.3 days to the current 3.3 days, while Amazon is 3.6 days - 3.3 days is already the most efficient in the industry.

From an enterprise perspective, this store mode enables best buy to open up inventory online and offline, and every physical store is a distribution center, which can distribute orders for the network, rather than setting up a company's total distribution center in a tax-free state.

According to the data, the total sales of the stores account for more than half of the total online sales.

Its CEO even said that the inventory liberated by the "store matching" accounted for 2/3 of the total inventory, and 29% of the increase in best buy online business was brought about by "shop matching".

That is to say, store distribution has already revitalize inventory, reduce costs and bring about new business.

This "shop Distribution Mode" is a combination of online and offline mode. At present, Messi, department store, WAL-MART and other top retailers are adopting this model. In fact, all these are the embodiment of "Unified Commerce", which is the future direction of the whole channel strategy.

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The case of best buy has passed such a message that the entity store regarded as a cost center is actually a revenue center: here, you can provide consumers with the most experienced face-to-face, one to one service, and more gross profits through the expansion of core commodities.

And when the retailer goes online, you need more than just a platform that can be displayed and traded, which can be seen by everyone. The real core competitiveness comes from the backstage logistics and supply chain system, which is unmatched by pure electric business, and is also the best thing traditional physical stores are good at.

It is very easy for a traditional retailer to enter the online store, and only in this way can traditional retailers get out of their own path in the declining environment.