Best Buy’s New Store Format: Beautiful Design Limited by Store Execution Issues

Best Buy unveiled a new store format last week at its flagship location a few blocks from their corporate headquarters. I visited the store twice last week. You can find more general review at The Mama Report, including photos, as well as at the Star-Tribune. The store has opened to rave reviews, and understandably so. The new format is beautiful, and greatly increases the opportunity to play with and learn technology.

The company traditionally introduces new store concepts in 1-3 stores, evaluates them, and determines which parts (if any) to scale. There are too many changes to include in one post, including such additions as a “Solutions Central” to ask questions, educational “digital displays” teaching about products, and vignettes that allow you to see how appliances might fit into your home. I will focus on the overall look and feel, and three specific areas: Tablet Central, the 3DTV Experience, and the Magnolia Design Center. This post reviews the format, and gives advice as to which parts should be scaled.

Full Disclosure

I worked for Best Buy for six years through 2008, and still love the brand. My last three years I designed interactive experiences such as those featured in this store. Several are clearly descendants of projects I led. This makes me more familiar with the issues than most.

We faced two huge challenges in designing these experiences. The first is that the nature of the work is that we used consumer-grade equipment to create commercial-grade experiences. Your typical TV or tablet is not designed to run 14 hours a day with kids banging on them and teenagers deliberately trying to sabotage them. Yet this is what we were up against.

The second issue is highly related. Setting up and maintaining these experiences cannot be done by typical merchandisers. Instead, they require skilled technicians at higher pay grades. Unfortunately, labor challenges (such as I discussed here) meant that Best Buy has historically not invested in the level of support needed to maintain these experiences.

This combination of factors meant that at any given time from 20-65% of all stores had experiences that were not functioning. This led the company to pull back on interactive experiences around the time I left. I hoped that Best Buy had learned to design experiences in such a way as to avoid these issues. Unfortunately, this does not appear to be the case.

Overall Store Design: Much Improved

Even though the remodeled store was about 25% smaller, the new layout, shorter shelves and bright paint made it look bigger. This is a place I want to come visit and play. Multiple staff offered to help me as I moved around, something that has not always been true. The associates appeared to be very engaged!

Photo courtesy of The Mama Report (www.theMamaReport.com)

 

Unfortunately, my initial experience served as a metaphor for my two store visits. I typically start a store visit in the restrooms. You can learn a lot from examining the level of attention there. These were nice and clean, even featuring fake flowers in the corner. But when the hot water was turned on, nothing came out. Nice look, poor functionality. This became a theme.
I have been thrown out of a store before for taking pictures, so I’m afraid you will have to use your imagination for some of this. I also limited my interaction with staff, as I did not want to distract them from customers, and there were many visiting on both days.

There were three primary areas I was interested in based on the promotions leading up to the opening: Tablet Central, the Home Theater 3DTV Interactives, and the new Magnolia Design Center.

Tablet Central: Nice Layout, but Not Quite There

This is one of the first areas you experience as you enter the store. This photo shows the overall layout, with each vendor’s tablets featured in their own section.

Best Buy Tablet Central Photo courtesy of The Mama Report (www.TheMamaReport.com)

 

The nice clean look makes it easy to find the product. You pass through all the other vendors’ tablets before reaching Apple (you can see it back and to the right), which is a smart decision. Each tablet is on a post so you can interact with it.

I expected to see an educational interactive to help me decide which tablet is right for me. It’s possible that one exists, but I didn’t see it on either of my visits. In 2008 I designed an educational interactive for GPS devices, and I hoped they used something similar for tablets. But no luck.

The beautiful design was hampered by two execution issues – one predictable, one incomprehensible. Each tablet features an interactive that shows its features. But two were not functioning, including one tablet that was frozen at both of my visits. Some of these tablets (especially the less-expensive ones) were not designed to run third-party interactive demos, so it was not surprising.

The second issue was worse: When I visited on Monday, there were 37 spots for tablets, but 9 were empty! When I returned on Thursday, there were now 11 empty spots – 3 out of 6 on the first section you see as you enter the department. You can see what the empty post looks like here – not the ugliest thing, but hardly what you want to see in a new store opening.

Where is the Tablet?

The store was only open for two days, so why the empty posts? Did they sell out of some items? A beautiful design is wasted with an empty post in the middle. Three in one section is incomprehensible.

If this issue shows itself within the first week in the first store, then it will definitely be repeated as this concept expands. It’s not the biggest issue – but would you ever see this at Target?

Home Theater 3DTV Interactives: Much More Work Needed

These have been a part of Best Buy stores for years. Interactives let you learn more about how the products and technologies work. In the back of this home theater department is an impressive-looking 3DTV display with separate pods for LG, Sony, Panasonic and Samsung 3D televisions.

This was my first exposure to 3DTV, but the display did not whet my appetite as Best Buy obviously hoped it would. The quality of the content was inconsistent, from beautiful to poor. In one, a jumping person had a leg that looked strangely pixelated; the Panasonic display’s text looked horrible. I found the 3D more of a distraction than attraction.

The displays were certainly engaging and easy to use. Each has a set of glasses that you can easily adjust to your height to view the 3D. There are also additional glasses for others to wear.

Four buttons allow you to choose between different types of content: general 3D content, ESPN-3D, Blu-Ray movie trailers, and content specific to this vendor. But this features a puzzling design, as you can see below.

Best Buy 3D Interactive Sign

At first, it looks like there are three options but four buttons. Can you tell me which button is for ESPN3D? Why don’t the buttons line up with the text? I pushed the wrong button a few times before I understood the layout. This suggests that the designers did not see the buttons and the sign together before they came to the store. Five minutes of concept testing would catch this issue, making it easier to use.

The displays also had significant functionality issues. The ESPN-3D button resulted not in the promised content, but instead in a bouncing DirecTV logo. This was true both days I visited.

On Monday, the Sony and LG stations showed a beautiful trailer for Hugo, but neither Panasonic nor Samsung worked. The Panasonic display refused to display 3D. And the Samsung glasses did not work – you saw double images whether watching with or without the glasses. When I returned on Thursday, the Sony TV now had a big blue message on-screen referring to a software update that had recently completed, rendering it non-functional. But at least the Panasonic display was now fixed (Samsung was still broken, and the LG was functional both times).

I talked to a rep about the issue on Monday, and he was quite familiar with the problems. I understand that things break, but these issues were obvious to casual observers. If this happens in the store right next to the corporate office, how will things be in Bangor?

Magnolia Design Center

The third item is clearly the most impressive. Magnolia is a high-end home theater retailer Best Buy purchased 8-10 years ago, and several hundred of their stores now include a Magnolia store-within-a-store featuring higher-end home theater products. This design center included products above even the typical Magnolia line.

The Design Center hosted three rooms that I can only dream about: an outdoor kitchen with TV and automated shades, an outdoor theater, and the ultimate home theater room. The house is run by Control4 home automation systems that allow you to manage all the devices with an iPad, even raising and lowering the shades and lighting. The home theater room features an incredible 7.2 sound system with gorgeous video, home automation servers, high-end soundproofing, and a screen that drops from the ceiling – everything you can imagine.

Most of it was functional, although they did have to rely on the original remotes more than once, and a few features never did work. In this segment, perfect execution is even more important. If customers are spending this kind of money on a home theater setup, it had better work flawlessly every time.

The Best Buy Magnolia Design Center - beautiful! Photo courtesy of The Mama Report (www.theMamaReport.com)

 

I walked away very impressed, but with one troubling question: Who is this Design Center for? The home theater room alone must have had over $200,000 in equipment. While there are people who buy this equipment, do they shop at Best Buy? And are there enough of them to pay for this use of space? I understand the concept of showing higher-end equipment to move people up the price curve. But how will a shopper with a budget of $10,000 react to a $200,000 demo?

I can only hope that the company has strong research to show that there is a very wealthy segment willing to shop at Best Buy. But my suspicion is that this room’s primary purpose will be to wow vendors (and employees’ friends) rather than to drive purchases. Which is fine, so long as the staff understands when it is appropriate to use this room for customers (very rarely!).

The Design Center is reportedly going to two other Twin Cities stores (Oakdale and Minnetonka). These are in wealthier suburbs, where they might find a more receptive audience.

What Items Should Scale?

Best Buy is a smart company, and typically uses a 1-3 store test to shake out the concept and determine what should scale. Given this approach, which items should scale?

The overall design is very impressive. The company does not plan to open many more stores, but this design should certainly be used for relocations and any planned remodels. Best Buy has an impressive analytics capability, and will certainly monitor the store to find out the lift in revenue. I imagine it will be significant.

Tablet Central should also scale, but only after some thought is given to the merchandising approach (a version of Tablet Central has already scaled). Several obvious options exist: use less space to avoid the gaps or creating a design that does not require empty posts for missing merchandise. Or, even better, find a way to have sufficient inventory for each space. There are multiple ways to fix this issue, but it should definitely be fixed before scaling.

The 3DTV display needs to be put on hold until it can be rethought. This is a destination, and any content needs to wow customers. The trailers definitely do, but some of the vendor content does not. More importantly, more thought needs to be given on it maintenance, either using a simpler experience or investing in more in-store labor to support it.

The Magnolia Design Center is difficult to evaluate without access to their research. But I would move very slowly on this. The functionality issues are not unusual for a new display of this type, and they are minor enough that I am sure Best Buy can fix them. But I am still uncertain whether this will drive sufficient revenue.

Is the Issue Design or Store Execution?

True design takes the store’s capabilities into effect. But Best Buy has always been more about moving quickly than it has about perfect execution. My suspicion is that the swirl regarding the company’s leadership led them to rush this store design before it could be fully tested. They typically roll these new designs out quietly, away from the flagship store and without significant promotion.

Now that it is out there, the company needs to focus on the strengths – the beautiful design and increased interactivity – and scale those quickly. I’m a huge fan, and I know that this will help to restore their reputation. But Best Buy also needs to have the patience to hold back those items that are not ready to scale, particularly the 3DTV display and perhaps the Magnolia Design Center. Here’s hoping they take the time to get it right.

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Update: JT’s comment on this post led me to checking this out.  It turns out that the 3DTV display is standard in all stores.  So while this issue is not specific to the new store format, it perhaps raises a more troubling question: how many of these displays are functioning in the field?  JT’s isn’t, as least.

(JT – thanks!)

{ 17 comments… read them below or add one }

JT July 3, 2012 at 7:47 am

Jim,
Great article. I completely agree with your assessment of the Best Buy store. We have 2 Best Buy locations near my home. A larger and more traditional store with the Magnolia center and a newer, more scaled down store excluding the Magnolia and Apple sections. You observations were spot on, so many of the displays are either non-functioning or missing items. The Magnolia center seems like an area nobody ventures into and has a feel almost like you are not allowed in there (they really should make it more open and accessible and part of the center of the store so more people/families can experience it.
You comments on the 3D display also hit home – 3 days ago I was in the store trying out the 3D displays – I too noticed only 1 (of the 4) were operational and was impressive yet the other three made me wonder if 3d was really worth it, wasn’t working, or maybe the manufacturers technology was not up to snuff. Similarly confused by the buttons not lining up, I tried ESPN 3D and came away with the thought that ESPN3D is hardly worth the subscription price if most content was not in 3D. Most likely, this was the display not working. Hardly the impression you want to leave with customers if you are Sony, ESPN, or Best Buy as a poor impression of a new technology will damage the opportunity to impress customers with this product and will mean lost sales for Best Buy, Sony, ESPN, Comcast and whomever benefits when customers are “wowed” by the technology. I was thinking “well, I won’t be interested in 3D until they work out the kinks and get more content out there. It might be another year before I look at the technology again too see if anything has changed. While I admittedly wasn’t looking to buy 3D at that time, who knows how much sooner I would move toward the purchase if I was “wowed” but the display. I look at purchases like this as a series of hurdles for manufacturers and retailers to over come with consumers. Besides price (and getting the wife to approve which is the biggest hurdle), often the buying into the technology is one of the biggest hurdles to get customers over before they start the purchase process (usually a mental process more than anything). While the 3D technology is neat when it works, non working displays give customers too many reasons to write off the technology for a while and not get to the “this is something I need” part of the putting it on your bucket list of things to have – and that can be devastating for retailers, manufacturers and even a whole technology industry. Best Buy has a bigger obligation to ensure their technology is working or how can they expect the buying public to assume it will in their home.

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Jim Tincher July 3, 2012 at 8:47 am

Thanks for the thoughts!

Being from Minneapolis, we tend to see things the rest of the country doesn’t, so I assumed the 3DTV display was new to this store format. It’s disappointing to hear that the one item with the most problems has been scaled! You are spot on – the natural consumer tendency is to feel that if Best Buy can’t make the technology work, what chance do we have? Who knows how many potential consumers have been scared away from the technology.

And there’s NO way I’d ever get my wife to sign off if the display didn’t even work!

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PW August 30, 2012 at 5:20 pm

Best Buy’s display problems extend even to relatively “low tech” displays. Shopping for car stereos, more than once I’ve had to explain to a Blue Shirt that a subwoofer was wired out of phase.

The first time, I explained to the clerk three different ways what speaker phasing was, but he never got it. He eventually blew me off as a relic from the 8-track days who didn’t understand modern technology (for what it’s worth, I help design $50M data centers).

The second time (different store, about a year later), the clerk simply said “so that’s why we don’t sell any of them”, and walked away.

Now, the car stereos were displayed on two smaller boards, rather than one bigger board. An obvious tactic to push upselling since you couldn’t listen to mor eexpensive speakers on a cheaper deck or vice versa. My problem was that with my speaker size constraints, I needed a smaller pair mounted om board number one and a larger pair mounted on board number two.
Best Buy used to keep all the decks, speakers and amps on one big display board — very cool — but now I could not listen to the system I wanted without using two very different decks.

I hailed another clerk to see if maybe my assumptions were wrong, but I was correct. He couldn’t seem to see why listening to different decks would make the speakers sound different. I asked him then why aren’t all the decks $99 (left board) or $599 (right board). He started to tell me all the features on the expensive deck (better tuner, lower distortion, etc). I said that’s why I can’t make an apples to apples comparison. He didn’t get it.

At this point, the existence of Best Buy as a value-add completely disappeared. If I was left to guess how a system would sound, and knowing their hassles for returning merchandise, I figured why would I want to do business with Best Buy. They may be brick and mortar, but they weren’t offering me any value. If it was going to be a crapshoot, I might as well order from Amazon.

I did order from Amazon, and saved money.

I recounted the whole issue with one of my management friends at corporate. He just shook his head and agreed with me. “Those displays have been screwed up for years. They should be having the gear installed by the car stereo installers, but they don’t want to spend the money so they have the clerks do it.”

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Jim Tincher August 31, 2012 at 4:04 pm

PW,

Your experience is unfortunate, but not terribly surprising. Often, vendor requirements (read: funding) drives what happens in the displays. Best Buy, like all major retailers, receives tons of vendor dollars, which often outweigh customer requirements.

I don’t know if that was the case here. But you (and incidentally, Best Buy’s strategy) have it right: without the ability to experience the technology, the physical retailer offers no compelling value outside of instant gratification. I go into more detail on this in my Shopper Education white paper, available off the navigation menu.

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Sophie September 5, 2012 at 9:36 am

The connected store concept was tested out of the home base market for over a year before Richfield was transformed. There has been a ton of media attention around the changes in the Vegas and Pittsburgh markets, so my suggestion is to research that before writing a review. It may help give more context. However the review is spot on – technology has to be working in the store, and BBY is famous for not putting labor in place to maintain this.

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Jim Tincher September 5, 2012 at 12:07 pm

Sophie,

Thanks! I was aware of the other pilots, as I know some people who worked on them. This is pretty standard for BBY – most big launches happen elsewhere. It was surprising to me that BBY did not iron out the bugs before this one, which was launched to much higher fanfare.

And yes – the labor is a critical issue! That’s where design is so important – great design takes existing constraints (such as maintenance and support) into consideration.

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Josh September 6, 2012 at 7:19 pm

BBY’s problems are far more than just displays. Their customer service has went way downhill — and it seems like they no longer hire knowledgeable employees. My girlfriend works in a Best Buy Mobile department here in GA. She has a manager who has no idea how to manage or schedule and a “lead” who has told multiple folks who didn’t qualify for mobile plans to call corporate and complain. The biggest problem is that this leads the customers to believe that it’s Best Buy denying them from receiving phones when in reality it’s the cell phone companies refusing to offer service to certain folks for various reasons. The other big problem BB has, is that they don’t utilize their FT and PT employees correctly. They require their part time employees to work at least 5 shifts/days per week. Which is causing my gf to quit since she can’t meet the weekly availability requirements due to her school schedule — and her managers refuse to work with her. They actually rejected her “change in available hours” when she handed them her school schedule and her school observation hours. Her mobile manger scheduled her to work 4-9 today even though she’s in school until 7:30. He then proceeded to tell her that it was her responsibility to find her a replacement and that if she just called in she would be written up as an unexcused absence. So while they need to change their displays to look nice and function well — they also need to fully vet their managers on their ability to actually manage.

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BrandonT September 19, 2012 at 12:08 am

Yes, they do need to reorganize the entire Scheduling System.. However, i DO NOT feel it is that big of a deal to make the Employee Cover there own shift! MOST Retail business’ do this now a days Including some of the big Name restaurants… Business’ are however, doing this to put more responsibility on the employee so they can fire them faster and higher in a new Minimum Wage Staff Member, which is not ok! With Giving the EMPLOYEE 100% Control of there schedule presented to them, it is much easier to Write up an employee for not getting a shift covered if called out

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BrandonT September 19, 2012 at 12:05 am

This concept isn’t new… The Best Buy in Racine Wisconsin has looked like this since they moved across the street into the old/smaller Circuit City Building 2 years ago or so. So how is this a new Flagship Concept again?

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Jim Tincher September 20, 2012 at 10:11 pm

Brandon,

The big differences are in the interactivity. Although to my knowledge the aerial signage is new, outside of a few test stores before this one. In most stores it’s hard to see to the back of the store because of so much signage.

But it is true that some of the functionality items are not new. But many (including the Magnolia) are.

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krypton October 3, 2012 at 6:10 am

1) They have succeeded in teaching their people to insure that any new customer is greeted when they enter a department: they don’t get the idea, though, when they greet someone from fifty feet away. They also have the drill down cold with the checkout rant about joining their “bargain club”, to the point where they start shouting at customers who refuse. Most customers already know about the address/phone data collection dodges.
2) Few of the BB stores reshop moved merchandise as soon as they could. Few of the stores really try to line up sale tags with the right products. It’s a great way to lose sales.
3) They seem to have a real problem with watching the customers to keep them from opening taped boxes (instant “open box buy”), and especially seem to like to ignore customers who are damaging display merch, while they harass people who are just browsing.

In short, they have a lot of really lousy floor managers. I’ve heard a lot of employees griping about the way the stores mismanage employee hours, both inside and outside the stores. Oh, and about a third of the restrooms are nearly nonfunctional (no water, no towels, no airdryer), and only about 10 % actually work correctly. I travel a lot: this only represents experience in about ten stores…

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Michael Harris October 3, 2012 at 12:21 pm

One of the things that Circuit City had was the STS department. A dedicated staff that installed and maintained those type of displays. In 2005 they were out sourced to IBM/ADT but the same people were used. Funding was cut and the days of good displays went away. 2009 they were gone for good.

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Jim Tincher October 3, 2012 at 1:17 pm

And it’s so critical. Best Buy also had SFTs (I think it was System Functionality Trainers) who kept up these displays – but they have also been cut.

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Mitchell October 11, 2012 at 12:16 pm

When was this written?
The Best Buy’s in the greater Pittsburgh area (around 8 of them) as well as several Best Buys in Nevada have had this layout for almost two years.

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Fred Carter October 21, 2012 at 3:47 am

Have read the above comments and must say they are too true.The service in the Birmingham, Alabama store is awful as is the demeaner of the sales people. They act like they couldn’t care less if you are in the store or not. BB used to be one of my favorite stores. Now they may have seen the last ofme. It’s too bad for a once wonderful store!

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Pj Little December 23, 2012 at 5:32 am

I agree Fred. I can say the same for the Joplin, Missouri store. I have not shopped there since an employee threatened me because I wanted to exchange a printer that did not work with my computer for a more expensive model. Not every third party piece of software or peripheral hardware works on every computer configuration. It is a fact of life Best Buy should have learned long ago. .
Arrogance and ignorance killed CompUSA, Ward’s, and nearly K-Mart. None listened to valid customer complaints.

All the eye candy in the world will not stop Best Buy from following in their footsteps.. Poor quality products + employees who are poorly trained = closed doors. It is a time proven fact. Maybe Best Buy can turn it around, and I hope they do. But, to do so they first inspire employees, think outside the box, and be prepared to make radical changes. The current business model is a failure.

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Christopher January 5, 2013 at 10:00 pm

The question is what is Best Buys commitment to follow though, and how much do they understand the that the customer wants concepts they’re preposing. Remember the Musicland chain, it was struggling before the Best Buy acquisition however they pumped millions into remodels that did not work, in some cases hindered the business. I watched them do complete remodels of stores and in less than 6 months they shuttered them.

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