Yes, I believe that this data mining is paying off. Just as important, Best Buy is a great example of the payoff of focusing on the customer. So many retailers talk about it; so few actually do it. I read this article yesterday and forwarded it on to a few people. Interesting enough, one retailer responded back to me with the following: “I couldn’t disagree with Best Buy or you more on this topic. Merchandising to a particular profile completely makes sense to me. However, training Best Buy Sales Associates to look for these types of customers is simply not a good idea in my opinion. If you have been to a Best Buy..,I think they should train the employees to not talk to each other in huddles, to pull their pants up to a respectable level, to use words bigger than yea and uh-huh and to give you a sincere greeting. Asking them to focus on a particular profile is asking them to alienate the rest of the customers.” A couple points to this… Read more »

Bravo to Best Buy. The core issue is maximizing customer relevance and that means choosing who your target customer is and what they value. More retailers need to choose customers they will serve with unquestioned superiority to any competitor as well as customers they’re willing to lose.

This discussion of focusing on customers reminds me of the common lament by supermarket executives when faced with the choice to do a dedicated Hispanic store. The lament goes something like: “Hispanic shoppers are becoming more Anglicized in their food preferences, so why change?”

But often, what’s really being said? “We’ll be largely irrelevant to 40% of our shoppers, because they’ll want what we stock today in a decade or two.”

Increasing customer relevance means choosing who you won’t be serving!

This will be interesting to watch. If Best Buy can sustain the sales growth noted from stores oriented toward specific shopper types, an argument could be made that they would be better served with a smaller footprint that offers a more focused selection of products.

Supermarkets have been doing this type of localized product mix marketing for a very long time to appeal to neighborhood makeup, but not to the point of eliminating products desired by other shoppers. However, unlike a supermarket, there are probably a lot of SKUs Best Buy can eliminate as it sharpens its customer focus at the store level.

Best Buy’s comp sales increases are superior in the revamped stores. I assume they’ve made sure that the ROI is superior too, after expensing the added costs. I’ve walked out of several electronics stores that were blasting music I dislike, because I’m not willing to suffer to shop.

Data-driven segmentation should become the norm for superior retail concepts. Very few retail concepts are really for “everyone,” regardless of claims made by the retailers themselves. Executives know the 80:20 rule but don’t always use it to drive their strategies.

Mentioned but not emphasized in the article is the use of data to consciously turn away unprofitable shoppers. The 80:20 rule works in reverse, too. A minority of shoppers can create the majority of losses. The serial returners, the bad-credit risks, the cherry-picking loss leader lovers, etc. Why not get a divorce from these people ASAP, without turning off the profitable customers?

My impression is that many retailers want “everyone” to love them…but that’s not where they should go.

We work with many different retailers across many different channels, and too many continue to maintain the fear that “if I focus on only one customer target, I will offend all the others.” The result: vanilla stores and ill-defined propositions. Kudos to Best Buy. They are leading the way in creating store experiences where a customer walks in the door and says, “I understand this store and the value it can provide me.” The key, of course, for Best Buy will be to take to a new level their ability to be nimble in managing product assortments, employee training, operations and the physical store experience.

I think Best Buy is doing the homework that most retailers are not willing to do. While the changes Best Buy is looking at are more for the here and now, they are also making great strides in knowing who their customers are, who they could be, and where both of those sets are located. Isn’t that the Sales 101 that many retailers seem to have forgotten about? If Best Buy keeps up their profiling as a long term strategy, they may just know if their customers are going to move before they actually do.

It’s been a while since I’ve seen a topic with as many responses as this one. For the skeptics who are waiting to see whether BB’s strategic choice to target its best shoppers will have a lasting positive impact, you can stop waiting. Best Buy is not the first to implement Larry Seldon’s ideas. (BTW, they were not Accenture’s ideas.) Harrah’s Entertainment is one example of several companies that have been targeting for a few years now with sustained positive results. Before Harrah’s began targeting, the numbers looked like this: for every $100 Harrah’s Best Gamer spent on gaming at all outlets, about $35 went to Harrah’s, and the other $65 went somewhere else. Today, Harrah’s captures $56 for every $100 spent, and that “share of wallet” continues to grow each year. I agree with the panelist who said, “retailers who maintain the fear that if they focus on only one customer target, they will offend all the others, will end up with vanilla stores and poor propositions.” Watch for other retailers like Tesco, Target… Read more »

Kudos to Best Buy for using the data available to them to improve the customer shopping experience.

My only caution to Best Buy would be to be careful not to focus so much on the target group that they alienate any of the other “minority” customer segments. Even in a “Jill” store, while the appliance department might be 100% focused on what Jill is looking for, it might make sense to have a leather couch or two in front of the plasma TVs for the “Barry” customers that are looking for a place to spend their money. The challenge is to not alienate “Barry” by having the plasma TV he’s thinking about buying showing an animated kid’s movie!

Best Buy obviously is paying great attention to demographics and I’ve always been an advocate for catering to one’s customer base in a particular area.

However, let me pose a question. If you are retooling your stores completely to attract Buzz or someone like him, what happens when he moves away and Jill moves in? Do you revamp the store yet again? I think Best Buy is the type of retailer that can focus on several customer segments in one location.

This strategy has all the makings of a disaster. While profiling customers and placing them in categories may be a worthwhile academic exercise, it is a foolhardy way to run a large retail business. I applaud Brad Anderson’s decision to “fire” those customers who only buy when things are on sale or those customers who abuse the store’s return privileges. But profiling customers is a mistake that will ultimately cost the company millions of dollars in lost sales. The first mistake here is categorizing a store by “some” of its customers and tailoring the store’s merchandise and service for those customers. The second mistake is to profile any customer by the way they are dressed, their age or any other narrow criteria. The third mistake is to allow store personnel to categorize customers on their own. And, yes, this includes managers. For as long as I can remember, savvy retailers have insisted that every customer be given every opportunity to buy whatever the store has to sell. With store personnel judging customers by their appearance,… Read more »

Meet Jill “the Buzz” Barry. A common person with uncommon nightmares. Tonight, Jill will come face to face with her demons in an all too real, imagined place we call, “the Best Buy Zone…” Confusion abounds. She’s been left off the mailing list for returning two cell phones that didn’t work in her office or neighborhood… shame on Jill for not knowing the cell towers next to her house were CDMA and the one near her office was GSM. Ban her from the store! High six figure income and all… gone. With this demographic stereotyping and targeting, Jill, as a successful business woman with significant buying power that is balancing work and family, is out? Jill’s technical understanding was not as great as “the Buzz,” therefore she will be booted? I bet she’d like a 50″ Elite plasma, though. Successful metrosexuals not spending enough money? Such a Republican viewpoint… Technosexuals are at least represented. I am sure Best Buy/Accenture is focused on value targeting with dreams of improving margins and revenue. “Cut the scum! Get… Read more »

Retailers have forever talked about “putting the customer at the center of everything we do” – well, it’s inspiring to see Best Buy walking the talk. They are a very smart, successful company and are not going down this path based on just a hunch or a book. In an age when every store in every market looks and feels nearly the same, Best Buy can better target and serve their best customers, drive further growth and profitability, and make the shopping experience more interesting at the same time.

Tweaking store atmosphere and service practices to appeal to targeted shopper groups is a nice idea. It’s an even better idea if Best Buy has a plan to keep monitoring its locations with the intent of periodically readjusting them to align with changing shopper demographics.

The “Jill” soccer mom types in a community may well give way to “Buzz” young men, as the little goalies reach high school. Communities are not static that way.

Adjusting displays and merchandise mix to suit this targeting should also be more practical today than ever before. Since every Best Buy store is able to offer the chain’s entire virtual assortment with the aid of its Web site, it may be less important for every item to be on display at every store.

The big however: Don’t make any profitable shopper feel “second class” or they will tend to vote with their feet.

Catering to your best customers is a smart move, but Best Buy would reap even bigger benefits from hiring knowledgeable people who are friendly and eager to serve every customer walking in the door. Personally, I have experienced quite the opposite on my visits to their stores. A great customer experience can make all the difference when consumers are deciding where to spend their money on an item available at a myriad of outlets.

Congratulations to Best Buy. Hopefully, the major national grocery chains will take notice!!!!

Simply said, Best Buy is micro-marketing by its neighborhood shoppers that the outlet is in. Yes, demographics, as well as NOW psychographics are being combined for maximum catering to the target shopper. Couches, music and cozy discussion areas that set the mood is one of the non retail practices that will pay great dividends!

Marsh supermarkets co. is having a reading/ book and magazine cozy area in its new outlet in Naperville, IL. This is an important activity and need that book stores, the Starbucks, etc. have utilized with meaningful success. So why haven’t more grocers done this in their 60.000 sq. ft. stores. Space is available! Or must such required space go to a gigantic Pepsi, snack display?

What choice would be made, by the grocer, for long term shopper loyalty, and their wallets being used more often? Hmmmmmm

While Brad Anderson and Accenture have teamed up to provide for customer centricity, the use of 4 profiles to build a store format has the potential to re-brand individual markets as to the Jill’s and Buzz’s of the world. What BB is missing appears to be the movement of segmented clusters from one lifestage to another and how to capitalize on lifestage shifts, not simple demographic profiles. To think that everyone in a Jill profile store looks and acts like a Jill is extremely short sighted. Jill may get pregnant, get married, divorced, buy a house, move, take drugs, smoke, attend church regularly, have 2.7 kids, etc. To think that you would make a capital investment around such simplistic store profiles will require future larger cap X investments as the lifestage of a Jill shifts. This tends to happen rather quickly rather than slowly. BB needs to come up with strategies that also shift the non Jill’s of the world into the Jill’s of the future. That’s leveraging the power of your Cap X investment.

Before Best Buy decides to implement customer policies based on the data it has mined, it must first establish a customer friendly shopping atmosphere that all can enjoy. As with several friends, my experiences with this company can best go under the category of sales prevention. One time I entered a crowded Best Buy camera department to discover the lone available associate helping a customer. After waiting several minutes, I politely asked if someone was available to answer three focused questions about a specific camera. I was told that the knowledgeable sales person had gone to lunch and should be back in 20-30 minutes. This was mid-afternoon. I observed several icy stares from fellow customers who had been patiently waiting. As I was on my own lunch hour and, in any case, didn’t care to waste a half hour for two minutes of questions, I left, as did a couple of other customers. Another time, as I was leaving the store after not finding what I was looking for, I came upon a large display… Read more »