Digital gains are changing how Best Buy puts its associates to work

Discussion
Photo: Best Buy
Feb 16, 2021
Tom Ryan

Best Buy last week laid off some in-store workers and told others their weekly hours would be reduced as digital increasingly drives the chain’s sales growth, according to The Wall Street Journal.

One employee told the paper that he quit because he could no longer accumulate enough hours to qualify for insurance.

“Customer shopping behavior will be permanently changed in a way that is even more digital and puts customers entirely in control to shop how they want,” Best Buy said in a media statement. “Our workforce will need to evolve to meet the evolving needs of customers while providing more flexible opportunities for our people.”

Best Buy’s third-quarter comps jumped 23 percent, driven by a 174 percent spike in e-commerce. Online sales doubled to 35 percent up from 16 percent a year ago.

On Best Buy’s quarterly call, Corie Barry, CEO, said that with the accelerated digital shift, the chain is piloting numerous labor and store initiatives. This includes positioning about a quarter of its U.S. stores as hubs to support significantly more online order volume.

Management’s efforts to create a more “flexible workforce” and/or having staff handle multiple roles is  expected “to drive efficiencies in labor planning and cost.” A computing specialist, for instance, could take a shift in the mobile department or home delivery.

Ms. Barry said Best Buy is also “evolving the way we position employees to serve customers based on need, irrespective of channel.”

Toward that end, the company has cross-trained about 450 store associates to help customers via phone and chat as those types of interactions have been “significantly higher” during the pandemic. Another 5,000 are also being trained to “flex into digital sales, if needed, based on demand,” Ms. Barry said.

Digital has likewise become a “meaningful percentage of the mix” of Best Buy’s consultative services, although home visits still make up the majority.

“As we improve the technology and experience for digital interactions, it opens up the opportunity for our advisors to reach even more customers,” said Ms. Barry. “Fundamentally, our strategy and competitive advantage depends heavily on our people and the differentiated service we provide our customers.”

DISCUSSION QUESTIONS: Do you think Best Buy’s move to trim in-store staffing is more about adding flexibility, de-emphasizing traditional in-store selling roles, or a bit of both? What kinds of customer-facing retail jobs do you see gaining more importance in the years ahead?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"As bigger cities empty out and employees feel used turnover will skyrocket, mark my words."
"This feels like a bizarre turn of events for a retail brand that has built its reputation on knowledgeable, expert staff that helps customers."
"That’s funny, I distinctly remember Best Buy saying their blue shirts were their most valuable assets and having human contact separated them from the competition..."

Join the Discussion!

34 Comments on "Digital gains are changing how Best Buy puts its associates to work"


Sort by:   newest | oldest | most voted
Mark Ryski
BrainTrust

This announcement rubs me the wrong way. The company just delivered excellent results, and their employees are being rewarded with layoff notices – in an economy that has significant unemployment? I well understand the rationale management is describing, but where does the commitment to employees come into this? I would certainly understand if Best Buy was under financial stress, but that’s not the case. How employers treat employees – in both good times and bad times – says a lot about the company and its true culture. This recent announcement by Best Buy speaks volumes.

David Naumann
BrainTrust
David Naumann
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
2 months 26 days ago

Best Buy is responding to the new customer journey where the role of the store is changing. The dramatic shift to online shopping, for Best Buy and most every retail segment, is forcing brands to rethink the store and how service is provided to best meet customer expectations. Customer-facing retails jobs will likely evolve to more consultative roles, especially for complex products such as technology.

Neil Saunders
BrainTrust

There has been a big change in how consumers use Best Buy. More business is being done remotely and while stores are still playing a critical role in fulfillment and some aspects of service, customers are shopping them differently. Best Buy has a responsibility to adapt and has been doing so through testing new store formats. Optimizing staffing levels is another part of the rebalancing equation. Hours reductions and lay-offs are unfortunate, but they are needed if Best Buy is to remain fit and healthy over the longer term.

The timing of the announcement comes as Best Buy closes what has been a very successful fiscal year. That looks jarring. However the company has to look forward and assess its needs in 2021 and beyond.

Bob Phibbs
BrainTrust

Thank you for your help, now here’s the door. Big retail is moving from training soft skills to having people manage tasks. As bigger cities empty out and employees feel used turnover will skyrocket, mark my words. And when online isn’t the captive darling of the pandemic, and shoppers return to stores, will those Best Buy stores look more like Sears or Circuit City did as they cut staff thinking no one would notice?

Cathy Hotka
BrainTrust

Ouch!

Gary Sankary
BrainTrust
On the surface I agree 100 percent that we will see some changes in store roles. Keeping in mind that the vast majority of business in retail, throughout the pandemic and into the near future, still happens in a store. I anticipate that there will continue to be a strong need for basic blocking and tackling – unpacking trucks, stocking shelves and serving customers. Now there’s new emphasis on supporting digital sales and new fulfillment capabilities. Great. I applaud Best Buy for really turning around business before the pandemic, and their outstanding success during it. Their success should be providing more opportunities for the employees who supported their success, and maybe this is going to be the case. But reading between the lines: “Our workforce will need to evolve to meet the evolving needs of customers while providing more flexible opportunities for our people,” and “to drive efficiencies in labor planning and cost” starts to make me wonder if, despite their success and record profits, they’re falling back to a pattern of eliminating benefited positions… Read more »
Dr. Stephen Needel
BrainTrust

You can put lipstick on it, it’s still a pig. The company has good numbers but in order to keep up those profits, they are trimming some staff and re-assigning others. It’s not a flexibility play or a shift-to-digital play per se, it’s a profit play. More digital often means fewer associates.

Gene Detroyer
BrainTrust

Yes, and more digital is not driven by the company, but by the customer.

Ananda Chakravarty
BrainTrust
I disagree that more digital means less. There are strategic imperatives for retailers to change and it’s not just profit taking. There will be changes based on geography, store functions and more. There is a shift for retail and they need to embrace the move towards a digital-physical future. Digital introduces higher demand for employees, especially in warehouse, distribution and supply chain. Customer service, logistics and scheduling become sought after functions. Many studies support the drive of ecommerce to increase overall employment, as in this example. A great read to understand this better is this McKinsey report. The report speaks to the inherent shift in tasking for the UK retail market specifically, but really taps into understanding automation and retailing of associates and other employees by retailers. The general trend is not all negative as first glance might suggest. In the Best Buy case, it’s not profit taking by greedy management. There is a shift to omnichannel culture- or rather no-channel culture where employees are more generalized. This process of cross training may cost more… Read more »
Gary Sankary
BrainTrust

Ananda, I agree with you. Digital doesn’t mean less, it means different. Change is here to stay, resilience is the success measurement of importance now. My caveat is when they use the word “flexible” to mean fewer hours for employees to get them below the benefits threshold, and fewer structure hours making employees more on call than shift work. Which is cheaper for the company, but difficult for team members to manage.

Bob Amster
BrainTrust

Expecting a smaller workforce to take on multiple roles requires the retailer to do a very good job of training. Training its employees is not something for which the retail industry as a whole is known. Those who do it very well turn out to be the leaders. If Best Buy can pull that off, they have a chance at success with the new approach.

Christine Russo
BrainTrust

The discussion is really about — what does a brick-and-mortar sales employee look like? Of course a proficiency in customer service and sales is needed but a digital acumen could become a critical hiring prerequisite. Will retailers incorporate technology and digitization from their corporate teams and lean on the on-store employees for clienteling and more? The smart ones will.

Richard Hernandez
BrainTrust
Richard Hernandez
Director, Main Street Markets
2 months 26 days ago

You still need associates to maintain the increase in digital – curbside pickup, online help, BOPIS, etc. I do not know if the store associates needed to be laid off as many locations are still working on getting up and running on supporting the increased sales in digital.

Brandon Rael
BrainTrust

As part of any digital transformation, there is an accompanying organizational transformation, which shifts and evolves the associates’ role and significance. While there will be some short-term job reductions, considering how successful Best Buy has been before and during the pandemic, there will be an increase in hiring to address the digital-first customer strategies.

As consumer behaviors continue to shift and evolve, Best Buy’s operating model has shifted to a digital-first strategy. Best Buy has been one of the modern success stories of a company on the verge of bankruptcy yet had the courage, discipline, and determination to shift the entire in-store and digital experiences to address a changing consumer landscape.

The expectation is that the store associates will remain a critical component of the Best Buy experience and receive the proper training and support to execute against Best Buy’s value proposition.

Ken Lonyai
BrainTrust

We’ve been talking about the future role of stores for years. The shift in lifestyle from COVID-19 has accelerated the prior slow/steady growth of digital sales and stores are adjusting–good or bad. Even if the virus was gone tomorrow, stores are not going to recapture 100 percent of prior business now that COVID-19 has pushed consumers into more comfort online.

How those adjustments are made and what personnel moves where (or not) is another topic. It sounds like Best Buy is creating employee friction by not sharing a vision and not keeping employee welfare front and center in their digital reorg.

Mark Ryski
BrainTrust

Good points Ken. Imagine being one of the employees who didn’t get laid off — so we work really hard, deliver great results and we can still get laid off? Yeah, this is a company to build a future with…

Yogesh Kulkarni
BrainTrust
Yogesh Kulkarni
Chief Operating Officer, Antuit.ai
2 months 26 days ago

Best Buy is responding to market changes that are inevitable. Over time, the new hiring to support their digital business in remote customer support, fulfillment of online orders, etc. will surely eclipse the loss of jobs they are seeing in the actual stores. Many companies have to re-tool and Best Buy is most likely putting a proactive foot forward. Given the pandemic and difficulty for the families losing jobs, this comes at a bad time, so there could have been a more gradual approach.

Lee Peterson
BrainTrust

That’s funny, I distinctly remember Best Buy saying their blue shirts were their most valuable assets and having human contact separated them from the competition, like Amazon. Guess not. Having just gotten off the phone after a half an hour trying to contact a human being at a certain retailer, I find this move sad and ironic all at once. Ex-Machina, here we come.

Andrew Blatherwick
BrainTrust

All retailers will have to face the changing nature of their business as increases in online sales have accelerated by 10 years during the pandemic. However that does not devalue store staff and retailers must ensure that they are well trained, well motivated and able to serve the customer in a way that will bring shoppers back, whatever channel they are in. Yes, staff will have to be more flexible and understand the various channels and how to work across the retail offering. But retail will now more than ever need to be customer-centric, delivering theater and great customer satisfaction if they are to thrive. Staff are absolutely key to that.

Gene Detroyer
BrainTrust

My ongoing criticism of the retail industry (and all industries) has been the propensity to cut costs by cutting labor. Over the years it has been a signal that the company is or soon will be in deep trouble. The companies cut at the bottom, not at the top, yet the productivity is generally at the bottom.

This is probably not the case with Best Buy. Surely they do not have a profit issue. Their decision is strategic, operational and forward looking. Companies are not charities. If the demand for labor’s services no longer exists, they should be eliminated.

Smart companies, sustainable companies are always looking at the trends of their businesses and balancing their workforce with the needs of the business. Best Buy is moving toward a much more profitable business model, one that most retailers should consider.

Raj B. Shroff
BrainTrust
I think Best Buy’s move to trim in-store staff is to address the shift in how shoppers are interacting with Best Buy. If sales volumes are shifting to BOPIS or ship-to-home, in theory, fewer people are needed to roam the aisles. The people you do have in-store should be more versatile and able to help in purchase decisions. Was this swinging the pendulum a little too far? Hard to say at this point. I am curious what shopper behaviors are. Are people coming into the store to browse models and then going home to place an order for future pick-up? Or are they doing research purely online based on trusted sites and ratings/reviews and not visiting the store? To me it seems the store is a differentiator. In this commodity space, Best Buy would be wise to beef up Geek Squad and, as mentioned in the above, get more support online via chat or video to help the shopper. Seems like a race to the bottom unless retailers like Best Buy come up with uniqueness… Read more »
Peter Charness
BrainTrust

I’d have thought that more digital online/chat help would necessitate more associates being available, but I guess the numbers don’t add up. Pursuing customer-facing retail as a career is certainly in a downward spiral.

Steve Montgomery
BrainTrust

Best Buy’s move may be a good one financially gives the impression of being coldhearted. The publicity around the move may not sit well with the current and potential customers base, but I doubt that the number who will stop buying from Best Buy will make a significant dent in their sales.