How Best Buy could switch from expensive retail business to e-commerce? How company can lead digital market?

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Created: October , 2012 Last update: April 2014
Ivan
E-mail: strivanlab@gmail.com
Cell: +1 (416) 890-0037
Skype: ishmelev
Toronto, Canada
Digital Franchise
e-Commerce Strategy

2. 50.71
49.14
42.41
38
40
42
44
46
48
50
52
2011 2012 2013
Best Buy business is slowing down
Big Box store expansion is costly with high CAPEX, OPEX and long-term ROI
Current e-commerce strategy: Company sells through its own web-store
offering the prices matching, free home delivery and social features
Those initiatives are not enough to lead the e-commerce market, because
competitors offer the similar products and services
Need in Digital Strategy
Revenue
-3.1%
-13.7%
BestBuy.com visitors
Flat
% change in online sales
25%

3. Digital Franchise - platform allowing entrepreneurs easy to launch
their own e-commerce store to sell goods supplied by Best Buy
Fast e-Commerce Expansion
One e-store
Thousands customers Millions CUSTOMERS
Thousands e-stores
VS

4. e-Commerce Evolution
Branded
e-Store
Affiliate
Program
Digital
Franchise
Company sells goods
through its own web-site
Partners use their own sites
to sell goods supplied and
delivered by the retail
Retail branded e-store
launched and fully
operated by partner
Affiliate Program Digital Franchise
Strategy Bring all sales to one site Split sales to many sites
Partners Bloggers/Publishers Entrepreneurs, Experts
Function Advertising Sales, Delivery, Support
Brand Partner`s brand Single retail brand
Delivery By supplier By partner
Technology Site developed by partner Site developed through retail took

5. Platform
CRM
ERP
BILLING
Tools
Development
kit
Franchise
Supply
Warehouse
Support
Processes
Services
PR/Marketing Financing
Customer database
Price and availability
Payment system
Tool to launch e-store
Loans and finance services
Guarantee, return
Logistic, supply, wholesale
License, certification
Branding, rewards,
promotions, advertising
Storage, package
ConsultingManagement, finance,
strategy, marketing
other Other services

6. Case: Networking Equipment e-Store
Entrepreneur Profile:
Charles is a engineer with an expertise in electronics and network
devices. He is an expert who needs an extra income.
Current activity and services:
He buys the modem/routers and sell them through:
- Personal web-site: www.charleslidstone.com
- Classified sites: Craiglist, KiJiJi, e-Bay
- Neighbors, colleagues and friends
He provides following services:
- Installation, configuration and maintains
- 24/7 availability at home, mail or deliver
- Professional recommendations and help
- Guarantee and repairs
Digital Franchise case (example):
1. Designed e-store using the Developer Kit from Best Buy
2. Orders and stores the most popular models at home
3. Receives orders and meets customers
4. Provides customer support