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


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.”
- Best Buy Is Cutting Some Store Workers’ Jobs, Reducing Hours – The Wall Street Journal
- Best Buy cuts store jobs, reduces hours of other workers – Minneapolis Star Tribune
- Best Buy Reports Third Quarter Results – Best Buy
- BBY.N – Q3 2021 Best Buy Co Inc Earnings Call – Best Buy/Thomson StreetEvents
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?
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33 Comments on "Digital gains are changing how Best Buy puts its associates to work"
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Founder, CEO & Author, HeadCount Corporation
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.
CEO and President, Cogent Creative Consulting
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.
Managing Director, GlobalData
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.
President/CEO, The Retail Doctor
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?
Principal, Cathy Hotka & Associates
Ouch!
Retail Industry Strategy, Esri
Managing Partner, Advanced Simulations
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.
Professor, International Business, Guizhou University of Finance & Economics; Executive Director, Global Commerce Education
Yes, and more digital is not driven by the company, but by the customer.
Retail Thought Leader
Retail Industry Strategy, Esri
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.
Principal, Retail Technology Group
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.
Owner/Founder, Retail Creative and Consulting Agency
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.
Director, Affiliated Foods, Inc.
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.
Strategy and Operations Executive
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.
Consultant, Strategist, Tech Innovator, UX Evangelist
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.
Founder, CEO & Author, HeadCount Corporation
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…
Chief Operating Officer, Antuit.ai
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.
EVP Thought Leadership, Marketing, WD Partners
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.
Chairman Emeritus, Relex Solutions
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.
Professor, International Business, Guizhou University of Finance & Economics; Executive Director, Global Commerce Education
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.
Founder & Principal, PINE Strategy & Design
Retail Strategy - UST Global
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.
President, b2b Solutions, LLC
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.
Founder, The Adelman Group