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Best Buy SWOT Analysis and Recommendations
- 1. Best Buy 2012 Chloe Chan, Onyuka Chinbat, Matt Fedorchak, Dan Lamberti
- 2. Agenda • Company Overview • SWOT Analysis • Objectives • Recommendations • Conclusion • Q&A
- 3. Company Overview Fiscal 2012 • $50.7 billion in revenues • 0.9% annual growth • Operating profits dropped 54% → $1.1 billion • Net income at -$1.2 billion • Showroom for lower cost retailers → Amazon and Wal-Mart • Digital tv sales declining, mobile devices on the rise
- 5. Objectives How can Best Buy: • Increase customer traffic/sales • Strengthen mobile/online presence • Improve brand recognition
- 6. Website • Personalized item recommendations • Customer reviews • Registry • Order tracking • Design
- 7. Social Media • Form of micro-blogging • Benefits • Allows you to get a pulse of happenings • Allows you to be responsive to customer issues • Allows you to get the word out • Fills in information gap • Promotes business and brand
- 8. Best Buy Mobile App • 2011 Features (Based on Best Buy Release Notes) • Shipping costs • Search - easier and consistent • Game trade-in values - reduced latency for more current and accurate prices • Recommendations • Create user account (Reward points) • Price Match • Alerts & Reminders • Store availability • Deals of the Day • 360 Image Rotation of Product
- 9. Credit Card • Financing options on large purchases • Money back opportunity • Connection to rewards and app • Increased rewards • Mobile payment option
- 10. • Store Display • Customer experience • Comfortable and relaxed environment • Tech Support • Free computer consulting services • Apple’s Genius Bar Store Layout Redesign
- 11. Conclusion • Website • Social media • Mobile app • Credit card • Store layout redesign
Editor's Notes
- http://investors.bestbuy.com/investor-relations/financial-info/annual-reports-and-proxy-statements/default.aspx http://www.forbes.com/sites/prospernow/2012/08/14/the-showroom-showdown-best-buy-vs-amazon/#96588747f26c The industry trend has been gravitating towards online stores. Consumers demand a more sophisticated ecommerce shopping cart. When we take a closer look at best buy’s website compared to its most threatening rival, Amazon’s website, there are some interesting cross shopping insights. Among Best Buy’s most loyal electronics shoppers, 51.6% admit to surfing Amazon (for any category) within the past 90 days. Fewer (40.6%) perused the offerings at Best Buy during this same time period. On the flip side, among Amazon’s most loyal electronics shoppers, 92.4% had visited the site within the past three months, while just 16.8% had been curious enough to enter a Best Buy. This means that even the most loyal best buy shoppers are checking out amazon’s website. We suggest an investment of updating and adding certain features to the website. The biggest change would be to offer more of a customized shopping experience with personalized item recommendations on each customer’s account based on shopping behavior. The second update would be to include more customer reviews. 63% of consumers indicated that they are most likely to purchase from a site if it has product ratings and a variety of dependable reviews. The registry feature will allow the customer to save items online and come back to it later or share their registry items with others, for an easier shopping experience. Order tracking on the website will keep customers informed every step of the way and further enhance the customer’s confidence in best buy.
- In addition to the website, marketing efforts in social media should also be a focus for Best Buy. For the millennials, social media has become the platform for communication. Micro-blogging is a web service that allows subscribers to broadcast short messages to other subscribers of the service. A popular example is Twitter that limits posts up to140 characters. Amongst the many benefits listed on this slide, Twitter has allowed many companies to enhance their customer service experience such as Zappos and Dell. By allowing customers to tweet about any issues, questions, or concerns, Zappos and Dell are readily replying and ensuring their customers are being taken care of. Employees spend lot of time posting promotions, tips for customers, and shout-outs to fans. This combination of content humanizes customer service and creates more emotional engagement. All the conversations between Zappos and Dells and their customers are available to the public eye which allows the word to get out. Best Buy can take on this outlet of communication as well. Roughly 3,000 employees are handling the Twitter account. With the increase in stores for Best Buy, I believe we can add 100 more employees. Employees will be screened for certification and employee status.
- Best Buy released their mobile app in 2010 with the following features of displaying shipping costs for purchases, easy search engine, and game trade-in option. In addition to the recommended marketing efforts of the website and social media, spending time revamping the mobile application can enhance the consumer experience by promoting a easy and user-friendly mobile app. We recommend updating the app with features such as:
- Along with the reintroduction of the mobile app, one of our long-term recommendations is to introduce a Best Buy credit card. The credit card would have to be partnered through a credit card company like Visa or Mastercard and would be a normal credit card usable anywhere that these types of credit are acceptable. It would be in the company’s best interest to provide certain incentives for customers that open a Best Buy credit card in order to increase the number of customers willing to start a credit line through Best Buy. These incentives include financing options on large purchases of at least $150 or more. Depending on the amount spent, customers will be given the option to finance their purchases over a financing schedule of 6,12, or 24 months based on their preference. With these financing options, customers will be able to select how quickly they want to pay off their debts for purchases over $150. In order to qualify for a 24 month financing option customers must spend $500 or more. After these financing periods are expired, Best Buy will have the ability to charge interest on the money not yet paid. As well as a financing option for customers, we recommend offering customers 2% back on any Best Buy products purchased in-store or online. This will increase the sales for Best Buy by offering customers an incentive to purchase their products from Best Buy as opposed to other competitors. In order to provide convenience and easy access, we intend to link the credit card to each customer’s account through the app. With this setup, we also plan to offer increased point rewards for purchases of Best Buy products at 3% and the credit card and reward point accounts can easily be managed through the app. Lastly, included in the app will be the ability to use the Best Buy credit card as a mobile payment option via smartphones. By providing convenience and incentives to customers, Best Buy will be able to increase their sales and generate revenue through interest payments.
- -provide technical support and troubleshoot hardware problems -some repairs can be completed right on the spot for an additional fee