Best Buy plans social future

30 November 2010

NEW YORK: Best Buy, the electronics retailer, believes the web now influences around half of its in-store sales, and expects social media to reinforce this trend going forward.

The company uses a range of digital channels to reach shoppers and staff, and argues the net is often now afforded the same status as utilities like electricity among consumers, rather than seen as discretionary.

Alongside information and services, it is increasingly a conduit for entertainment and conversation, with rising numbers of netizens buying devices from Best Buy's portal even when the downturn was at its peak.

"Some pundits were saying that the internet would kill off brick-and-mortar retailers like Best Buy, but our thinking early on was that e-commerce would complement stores," ceo Brian Dunn wrote in the Harvard Business Review.

"That turned out to be correct: today our website influences more than 50% of our in-store sales, and about 30% of customers who order online opt to pick up their purchases in a store."

Looking ahead, Dunn predicted corporations and their chief executives must be active on social media, suggesting not engaging consumers in this way could prove "fatal".

"I'm a heavy user of Twitter and Facebook, and I learn a lot from the time I spend on those platforms," he said.

"I interact directly with customers and employees. I watch trends and see news I'd miss otherwise … I believe that Best Buy's message has to be where people are. Today, that means being on social networks."

Best Buy has created a "Twelpforce" providing free guidance to Twitter members, as recently discussed by Geoffrey Precourt, Warc's US editor, here.

The service yields a real-time barometer covering the issues facing customers, and strengthens brand perceptions.

"People are going to shop with companies they think really care about what it is they're trying to do. Twitter lets us demonstrate that we're one of those companies," said Dunn.

More broadly, Dunn stated such activity should not be assessed solely in financial terms, as it deepens relationships with consumers in areas they voluntarily inhabit.

"Today when people buy a new device, they often 'crowdsource' advice by asking for recommendations on Twitter or Facebook. That practice will become more and more influential over time," he said.

"We know that there's a virtuous circle here: the more people become involved in social media, the greater the demand for connectivity and the PCs and mobile devices that deliver it.

"So social media are absolutely core to our strategy."

Dunn was exposed to the dangers of using these services after a rogue Twitter user accessed his account, posting a comment and link apparently promoting "male enhancement" products.

A YouTube video also surfaced last year, posted by a Best Buy associate and negatively depicting shoppers' frequent insistence on buying Apple's iPhone whatever alternatives were available.

While the clip, which has received 9m hits, did not mention Best Buy, other videos by the same person did, and the company had this material removed, and suspended the individual concerned.

It has established formal social media guidelines for staff, requesting they transfer values from the offline world, reveal their affiliation when necessary and ensure they don't disclose non-public information.

"The reality is that social media are where the national conversation is taking place today - and either you're part of that conversation or you're not," said Dunn.

"You can't use them only when things are good. You have to deal with rain as well as sunshine. And I'm convinced that the upside outweighs the downside."

Data sourced from Harvard Business Review; additional content by Warc staff