RILA show: Best Buy learns from pandemic experiments

Retailers in every segment exercised extreme flexibility to maintain customer service levels through the pandemic, but the electronics dealer Best Buy says that pressure allowed it to discover improvements that will last for years to come, two executives said today at the Retail Industry leaders Assoc. (RILA)’s annual conference.

A prime example is the Minneapolis-based company’s “virtual store” initiative, Damien Harmon, Best Buy’s EVP for omnichannel, said in a session at the LINK2023 show in Orlando. Before the pandemic struck, the firm had assigned between 2,000 and 3,000 employees to selling and installing goods inside customers’ homes. But in pursuit of covid safety and social distancing, the company recalled them to work remotely. 

That change happened just as it had decided to convert all its brick-and-mortar stores from live shopping to curbside delivery only. And at the same time, the company had been relieving pressure on its call center workers by launching automated self-service features that handled many customer calls.

Taken together, those three steps meant that Best Buy suddenly found itself with a team of trained employees isolated from the customers they needed to serve. So when homebound Americans drove a spike in e-commerce shopping demand, Best Buy met the demand by connecting those workers to shoppers through online chat and phone links, and quickly discovered that those “virtual stores” actually outperformed the previous, home-visit model. 

While Best Buy never suspected the initiative would outlast the pandemic, the company today has expanded its virtual store model by adding video call capability, and is trying to “pour gas on it” to fuel further growth, Harmon said in a breakout session titled “Driving Omnichannel Success through a Customer-centric Supply Chain.”

And while that program has been a happy success, the company has also walked back some other recent initiatives that didn’t pay off as well, Best Buy’s EVP and chief supply chain officer, Mark Irvin, said in the same session. Those experiments included outfitting every U.S. store to ship retail e-commerce orders—later adjusted for a focus on larger, more efficient customer fulfillment centers—building small-scale retail stores that stocked less inventory, and launching an employer parcel delivery program that compensated for congested transportation networks during the pandemic. 

“The supply chain is the first, middle, and last mile, and that has to be customer centric; there’s no flexibility there. But who does it; there’s lots of flexibility there,” Irvin said. “We’re building a culture that’s willing to make some mistakes, to fail and then learn.”