Best Buy Rethinks Retail Spaces

Online and offline shopping continue to morph into different shapes as they adapt to shifting tech and cultural realities. That was the case before a pandemic was thrown into the mix, transforming consumer shopping in both near and long-term ways. It taught us things about ourselves we didn’t know.

Somewhere in the middle of all that is the steady evolution of physical retail. We have longstanding innovators like the Apple Store, and recent retail digitization from players like Amazon. The broader “retail as a service” (RaaS) trend offers things like cashierless checkout and streamlined logistics.

Now, Best Buy wants to join the party. In a move that appears to actively sidestep the fate of consumer electronics retailers like Circuit City, it’s experimenting with a new digital-first store. The highly streamlined concept has 1/8 the footprint of the average Best Buy location and is digitally infused.

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Two-Track Mind

So what does the new store offer? Launched first in Monroe North Carolina last week, the 5,000-square-foot space will showcase a selection of high-margin and popular products. Top categories include home theater, computing, headphones, wearables, fitness, cell phones, cameras, and smart home gear.

Like Apple Stores, trying products is a key part of the experience. When ready to purchase, shoppers scan a QR code and someone will bring the product out to them and check them out using a mobile terminal. Smaller items like charging cables can be bought right off the shelf using the Best Buy App.

Additionally, signature “blue shirt employees” and Geek Squad techs staff the store for product advice and support. This makes it a sort of showroom space to try out products, but the thing that differentiates it – besides square footage – is that most of the shopping activity takes a page from eCommerce.

In addition to roving mobile transactions throughout the store, shoppers can order online and pick up items from lockers outside the store. For things like appliances, they can check them out in store then place an order that’s shipped to the store for pickup at a later date (more on that in a bit).

This essentially means that the new Best Buy experience offers two tracks. One is the traditional retail experience of showing up at a store to browse products (albeit, a pared-down selection). The other track is the streamlined order-ahead method that gained so much steam in the Covid Era.

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Just in Time

Product selection will align with those two tracks… including smaller high-margin products and bulkier fare. But even for the latter, Best Buy will keep limited quantities for demonstration purposes. After seeing these products IRL, shoppers can order and pick up items at a later date, as noted.

That last part is important because, though it accommodates the Covid-induced hunger for online/pickup orders, it also follows an old-school retail fundamental: Just-in-time inventory. Without having to order several units of that bulky smart fridge in advance, it not only saves space but cash flow.

In pre-Covid scenarios, this held some disadvantages in that not having a given item in stock meant losing business to competitors that did. But cultural factors align with this model, given consumer comfort with “order ahead.” In fact, this brings the best of both worlds, given the showroom option.

Of course, all of the above is an experiment. So Best Buy will have the chance to test these hypotheses (some of which are our speculation), in practice. So it will likely learn a lot from outcomes in the coming months. And true to tech-sector dynamics, we’ll know the model works if Best Buy competitors copy it.

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