Best Buy associate surprises a new graduate, May 2020 – Photo – Best Buy
Best Buy puts multi-taskers to work
Best Buy last week elaborated on a workforce reset aimed at encouraging store employees to tackle more tasks to support omnichannel practices, including delivering packages to homes.
The changes come as stores increasingly drive online sales. Online contributed a third of Best Buy’s first-quarter sales, up from 15 percent in the pre-pandemic first quarter of 2019. About 60 percent of online revenue was either picked up in-store or curbside, shipped from store or delivered by a store employee, “which is becoming an increasingly important aspect of our delivery experience,” said Corie Barry, CEO, on the retailer’s first-quarter conference call.
Best Buy implemented employee delivery in the fourth quarter, having associates do so during downtime periods and using Best Buy vans to avoid liability.
The service mostly supports next-day capabilities, speeds delivery times and offers “surprise and delight” to customers. “Typically, the customer feedback we hear is, I wasn’t expecting a blue shirt necessarily to come walking up with the package and delivered it safely to my home,” Ms. Barry said.
Enabling employee delivery is part of a broader effort to create a “more flexible and engaged workforce” by upskilling in-store sales associates to handle other tasks, such as virtual consultations and remote support. “Our employees are gaining skills that can be used across their career journey, and they’re gaining more confidence,” she said.
Some are picking up skills related to in-home tech assistance. Early results show that, as skills are added, employees drive a higher customer net promoter score. Ms. Barry said, “As we continue to evolve our labor model, we have not lost sight of the competitive advantage our team members provide, especially in more complex sales transactions.”
The labor changes are resulting in fewer net employees; Best Buy’s employee count fell 17 percent in 2020. Full-time employees are now 60 percent of the chain’s workforce, compared to 54 percent pre-pandemic.
“We are iterating to find the balance between providing in place full-time opportunities that come with benefits and guaranteed hours and schedules, while also maintaining the flexibility that is often important in retail,” said Ms. Barry. “Overall, we are doubling down on the expertise by investing in our people, in their training, skill sets, and career progression.”
- Best Buy (BBY) Q1 2022 Earnings Call Transcript – The Motley Fool
- Best Buy Adopts Home-Delivery Plan That Flopped at Walmart – Bloomberg
- Digital gains are changing how Best Buy puts its associates to work – RetailWire
- How Best Buy is rethinking the role of its store employees – Modern Retail
- Best Buy shrinks sales floors for a more fulfilling experience – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Is empowering associates to handle deliveries, virtual consultations and other non-store tasks an efficient way to manage omnichannel needs or is it stretching associates too thin? What do you think of Best Buy’s strategy of reducing the overall staff count by upskilling workers and increasing the percentage of full-time workers?
Poll
BrainTrust
Nikki Baird
VP of Strategy, Aptos
Ryan Mathews
Founder, CEO, Black Monk Consulting
This is about a company’s willingness to spend time and money – in wages and training – to create a talented force of store associates. It probably can be done. Wages have to attract workers with the talent and desire to learn more and the business has to spend on developing the training programs and paying for the time to deliver them to the employees.
Ms. Barry’s focus on “investing in our people” is a huge advantage that will further endear Best Buy to customers. Empowering these associates will bring new creativity to the company and will provide closer ties to customers. I recently bought a television and chose Best Buy because they respect their associates this way.
I think Best Buy is crystal clear that they are not just a purveyor of tech product, but they are also a provider of tech know-how. That package, that combination gives them a 1+1 = 3. I have to believe that they will evolve the whole equation in a win/win manner. And that may very well result in a lower head count. Efficiencies do that.
Inevitable. Retailers, whether through Wall Street pressure or their own short-term decisions at the expense of long-term thinking, have tried to cut their way to growth for far too long. You can’t grow by closing stores or cutting employee hours or trying to staff stores with unskilled workers to keep wages low. It’s time for retailers to re-learn that skilled workers who don’t have to juggle three jobs make far more effective workers – driving sales, customer satisfaction and, ultimately, customer loyalty and lifetime value.
Many employees like to learn and have variety in their work. It keeps them interested, motivated and fulfilled. It’s not as much about reducing the overall staff count as giving employees a sense of more responsibility and a feeling that there is importance to their work. For Best Buy, they are finding the balance between part-timers and full-timers. Business is constantly changing, and therefore the responsibilities of many employees will (and must) change as well.
I’d like to say this is brilliant, but it is not. It is just plain common business sense. Employees are not an expense. They are an asset. Expenses cost a company money. Assets are an investment that demand (and generate) more sales and profits.
Best Buy just continues to make good moves. Sadly, I don’t expect many retailers who aren’t already thinking this way to change their attitude.
Labor is a non-scalable resource. Too much will translate into poor quality engagements, less time for customers and missing what’s right in front of you. Although this is only a single instance, a friend related his recent experience in a Best Buy store where he waited 45 minutes for an associate to assist in making a locked-in sale – even after speaking with two associates at different points in the store. He just gave up and being a loyal Best Buy customer, said he’d buy it online after looking at the reviews. The customer in the store is more valuable – they’ve taken the time to leave their home, drive to the store and enter the store with their wallet or purse open. For commodity products like electronics, the customer online can jump sites in an instant – there is less stickiness and investment or “skin in the game.” For Best Buy it’s a balancing act, with strong online sales – but the store needs to have strong service otherwise the best customers will vanish.
No action will benefit a retail company more than turning employees into authentic brand advocates. In the case of Best Buy, improving the quality of jobs over the quantity of workers is going to reduce turnover and make employees feel invested in the success of the company, which will manifest as phenomenal customer service. I’m happy to see that Best Buy fully understands that stores are an intrinsic part of online sales, and that happy employees mean happy – and more loyal – customers.
Employees as authentic brand advocates. Nailed it!
The upskilled and multi-skilled workforce is great. But that is not to be confused with the idea of multi-tasking, which is what Best Buy is also promoting. Having employees deliver a package during downtime(?), or do tasks that are not central to the job definition or career goals is going to cause dissatisfaction. It takes a meaningful amount of time spent on anything to be able to get to an 80 percent mastery level. For instance, if an associate is now trained on remote support for new PC installation, it is best to have that associate in that role for at least three to six months before rotating out to other tasks.
Best Buy’s empowering their employees to handle multiple tasks only works if they have first equipped them with the skills needed to successfully perform those tasks. That done, the employee’s ability to handle a variety of functions in the multichannel environment makes them more valuable to the company. In Best Buy’s case this means moving them into full-time positions with all the benefits that brings. This is a win for the employee, Best Buy and their customers.
Upscaling isn’t teaching new tasks. Driving to someone’s home and delivering a package is what we used to call grunt work, it needed to be done but anyone could do it. Adding the ability to do more complex installs I’m all for and being able to convert at a higher level on a complex sale I’m all for, but net promoter as a delivery person, nope.
Bob,
All I can say is, “Amen, Brother.”
If I had read your comment first, I wouldn’t have had to write mine .Not sure where the “skill” is in all this “upskilling.”
Bob and Ryan, I don’t think the framing of this discussion fully represents what Best Buy is actually doing. Delivery is just a small part. The bigger part is providing education and training so that employees can become certified to perform tasks outside their primary job function and earn a different hourly wage depending on the task performed. Retention is the main goal, not delivery.
The example given was delivery. I don’t see how being better at mindless tasks gives anyone better life skills.
You read my mind on this issue, Bob. My first thought was, “Why divert well-trained, well-paid store associates to do mundane package delivery?”
But then I had a second thought about this. If we regard the delivery experience as an added customer service dimension then this practice could create some shopper magic. In other words, delivering the package may be a very low-skill task, but interacting with the recipient is a customer service opportunity. So, IF the BestBuy deliveries are used as an opportunity to cement shopper relationships, they could indeed be an ace in the hole for the brand. That would depend on properly trained associates who knock on doors prepared to answer questions and leave behind a calling card.
“Just text me if you have any issues or questions about this item.”
Talk about a relationship-builder.
And in an ideal world maybe that is possible but the sale is already made. Imagine if actual time on the floor was more than picking orders? A guy in a blue shirt could deliver a package just as well and say, “Text me if you have questions.” I highly doubt this is a value add as much as way to move budget money from store personnel to delivery so the books look better.
Best Buy’s strategy is designed around melting down traditional silos so that organizational design and functional roles are better aligned with the changing operational reality formed by consumer behavior, which in turn is made possible by the massive consumer adoption of advanced technologies. Organizations that don’t have the mindset to explore new organizational designs and are prepared to experiment with cross-boundary roles will fade away. It’s not only about adapting to changes in the business environment but doing so at a commensurate or faster pace. The longer a company waits to make changes, the wider the gap and the greater the necessary magnitude of change required to catch up. At some point, the early inertia will keep you from ever getting back into the game without painful internal disruptions up to and including flirting with bankruptcy. Best Buy’s board and C-suite have aligned on leading and creating their future rather than adopting a reactive strategy. Bravo!
Let me be the Devil’s Advocate for a moment amid the choruses of cheers for this program. Forgive me if I fail to see “upskilling” in turning a sales associate into a driver. Delivery is delivery. What they have accomplished here is a near 20 percent labor force reduction. As Ananda pointed out there is no way this isn’t going to impact in-store service levels which will inevitably drive more and more sales online, which will ultimately reduce the need for as many – or at least as large – brick-and-mortar locations, which will further drive down labor costs. Kind of looks like a strategic cost-reduction plan more than an employee enablement program. Teaching new skills on the tech side? Great! Training skilled workers to be drivers and carry refrigerators? Not so much.
Excellent Ryan. Same conclusion I came to. Not a devil’s advocate — understanding what is going on behind the PR on becoming task robots, not customer service providers = #bigdifference.
A perfect storm of rising wages, a tight labor market, and competition from the gig economy has triggered a tectonic shift in retail, and Best Buy’s plan is just one example. Retailers have begun to rethink the role of the workforce as being more than a disposable resource with a 60 percent turnover rate. New goals include improving retention, productivity, engagement and customer satisfaction. This is the future of work in retail.
This a great move by Best Buy because it provides some real benefits and motivators to their employees. If you look at what employees want out of a job this program checks off a lot of the boxes.
1. Learning new things
2. Opportunity to Grow
3. Recognitions.
4. Greater responsibility and independence.
5. Recognition.
Saying that “Our employees are gaining skills that can be used across their career journey…” is only half true. You can package it any way you like, but this strategy is to Best Buy’s benefit. Sure, the associates will learn new skills, but not all of them will help on their career path.
I’m with Bob and Ryan on this one. Handling virtual consultations and offering remote support are a benefit to the company and to the associate; asking a skilled sales person to drive a van to deliver product is not. In a pinch maybe, but not as a regular part of the job description.
Why not just call it what it is? An efficient way for Best Buy to manage its omnichannel needs.
To the extent that this initiative is perceived as a way to reduce headcount and simply work the store associates harder, it will be doomed to failure, regardless of the improvement in and customer experience. Ultimately, unhappy employees lead to unhappy customers. Best Buy must carefully identify employees who are willing and able to add additional tasks to their day, and not make those tasks mandatory across the organization. Post Covid, workers are very sensitive to management loading additional tasks for their own profit at the expense of employee satisfaction. Good strategy, but tread carefully.
I think the key is the broadening the skill of the store employee to be a retail employee. Doing delivery is probably not the best example of upskilling a store employee, but if they are cross trained for online customer service, product training, trouble diagnostics etc. it is a good thing for their career and for the customer.
Finding a balance between specialization and excellence will be difficult. The key will be training and career pathing. Providing unskilled workers an opportunity to build skills that level up their career makes a lot of sense. Asking skilled workers to become delivery people will likely hurt employee morale and retention. Matrix skillsetting and career pathing will be everything in this new world.