Will Best Buy’s golden years strategy deliver long-term success?
While most retailers seem to be obsessed with finding ways to attract younger consumers into their stores and onto their websites to shop, others such as Best Buy see business opportunities in catering to the needs of the nation’s senior citizens.
The consumer electronics retailer’s Assured Living program, which launched last year, is geared to meeting the needs of the elderly. Best Buy offers in-home consultations to match technology to a given customer’s situation and then employs its Geek Squad to do the installation. The goal of the program is to provide older customers with tools such as medical alert systems designed to protect their health.
Best Buy’s recent acquisition of GreatCall, maker of the medical alert devices and Jitterbug cell phones designed for senior citizens, is a clear example of its commitment to this market segment. GreatCall’s range of products and services has helped the company growing its subscriber base to more than 900,000 people. GreatCall generates more than $300 million in annual revenues.
When the deal was announced in August, Best Buy pointed to statistics showing that roughly 50 million Americans are over the age of 65 today, with that number expected to increase 50 percent over the next 20 years.
“We know technology can improve the quality of life of the aging population and those who care for them,” said Hubert Joly, chairman and CEO of Best Buy. “Now, we have a great opportunity to serve the needs of these customers by combining GreatCall’s expertise with Best Buy’s unique merchandising, marketing, sales and services capabilities.”
Being able to offer services in addition to products is key to Best Buy’s strategy, Sam Glick, a partner in the health and sciences practice of Oliver Wyman told CNN. Assured Living and GreatCall “provide key services that can’t be disrupted in a cardboard box,” he said.
DISCUSSION QUESTIONS: How do you expect Best Buy’s senior focus to affect its results over the long-term? What rivals are most likely to challenge Best Buy for this market in the years to come?