Have you ever heard of Hubert Joly?
No worries – no one else had either when he was named the CEO of Best Buy in mid 2012.
NB – I’m sorry to feature an American retailer – but Joly is French and the story I believe is universal and important.
Back to my narrative… Not only was he French – he came – horrors – from the travel industry…where he had been CEO of Carlson…which owns among other holdings the Radisson Hotel Chain and T.G.I. Fridays restaurants.
Worse…he had no profile among the digibabble analysts who almost to a digital posting dismissed him and Best Buy as goners to the juggernaut of the Amazon retail engine.
Preemption alert – this is not about Best Buy vs. Amazon – apples and oranges…in fact apples and steak – a wasted discussion and frankly a smokescreen discussion for the dogmatists.
Rather this is about people, insight, shopping and the need for championing open thinking the same way we tout open systems.
What did Joly do?
He embraced what he had – stores/showrooms and good salespeople…Listen:
“Our goal is not to be lower than the competition…it’s to offer a very compelling set of customer promises with the assortment, the advice, the convenience, the service. So our goal is simply to eliminate price as an obstacle to buying.”
It’s also important to note that Best Buy has been working to take costs out of their system to improve their overall margins.
Yet there are still analysts who think that price is still the only deciding factor and that Amazon will win over everyone – and here is the joke (in my opinion), the notion that Amazon can make up in volume what it sells below margin is poor math…work it out – keep adding negative numbers and let me know when you hit positive….
Best Buy has simply gone back to basics – people like to see and try the kind of products they sell – make it easy for them to buy on the spot as well, and they will leave the store having bought as opposed to having used their smartphone to check prices and order remotely.
And I’m speaking from experience. I went online – could not figure out what was right for what we wanted so we walked across the street to Best Buy – bought and had them install – simple and at the same price as buying blind online. And we had a great time – watching, listening, asking questions – the experience was excellent and worth the walk – as is sitting here with my wife catching up on the Homeland season on our big new screen.
Bottom line…the story is still being written and the jury is out – but here is the thing – the stock price is up – over 200% this year…and they are in the top three S&P performers of the year like they are a tech stock… and sales are trending up – including Internet and they beat their earnings. Obviously they have a long way to go – but let’s stop the knee-jerk comparisons and learn from what they are doing right and why experiences don’t just exist online – despite the digibabble.
And my bet? Watch Amazon copy them…as I’ve predicted before.
We need to stop meaningless comparisons; we need to end the near religious canonization of all things digital; we need to kill the belief that nothing existed before the Internet….
We need to put a lid on digibabble….
Remember – digital is everything but not everything is digital – Best Buy’s use of digital to enhance your experience is light years ahead of the Amazon experience – and that is the point – you cannot compare them…
Amazing…learning from a guy who came from the travel industry…hmmmmm…people, experiences, life…a lesson many companies are beginning to follow….
“The greater the ignorance the greater the dogmatism.” Sir William Osler
There is too much open knowledge out in the world for us to be dogmatic about anything – and that is what makes our world so full of amazing opportunities.
What do you think?