If you were to have asked me three years ago for a list of retailers that would be making cuts today, Best Buy
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would not have been on it. Then again, if you would have asked me in 2012 for a list of retailers that would successfully reestablish themselves in the second half of that decade after nosediving in the first, Best Buy wouldn’t have been on that list either. Such are the vicissitudes of retail, and Best Buy is today once again restructuring as the Star Tribune reported.
One portion of restructuring has understandably been drawing the most attention. That is, the part about massive layoffs which will find a portion of Best Buy’s Geek Squad tech support agents replaced with generative AI-based chatbots. This strikes me, for a number of reasons, as an ill-conceived and perhaps desperate move. The news coming out of Best Buy, though, isn’t all layoffs and automation attempts.
While the Geek Squad support for general customers is going at least in part virtual, it looks like the chain is deploying more of the remaining, human Geek Squad to focus on Best Buy Health, the chain’s sub-brand for age-in-place home health technology and services. I think there’s a path to growth there, though it might lead to a Best Buy very different from the one we’ve known for decades. In pursuit of a turnaround, Best Buy could be setting the stage to transform itself into something else entirely.
Why Best Buy is Looking For a Better Bet
Best Buy Health is a sub-brand launched a few years ago which deploys and manages suites of technology in the homes of older adults (allowing them to “age in place” comfortably in their own residences). This consists of solutions geared towards helping customers with age-related issues, fitness technology and even prescription fulfillment and medical device-related tech. The retailer has been steadily building Best Buy Health through partnerships and product/service expansion. I can see it being a good place for the deployment of Geek Squad technicians. Aging adults, their houses full wired with Best Buy Health solutions, are undoubtedly going to be expecting white glove tech service. I can also see focusing on age-in-place technology as a way to keep sales moving as new seniors-related tech devices are developed and released. The kind of regular sales Best Buy seems to have been missing in recent quarters.
Best Buy consumer electronics company store entrance, facade and exterior with customer car parked … [+]
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As I alluded to, a few years ago at the peak of the pandemic Best Buy was doing great. It was getting accolades for navigating the disruption, deploying its already advanced e-commerce resources to facilitate curbside pickup and deftly handling social distancing demands. It’s also one of those retailers that benefited from a sudden, massive shift towards work-from-home. A lot of people needed new computers all at once (and with pandemic payments hitting bank accounts, they had the cash to spend on them). These days, though, that unprecedented spike seems to have led to an equal and opposite crater, as people don’t replace computer hardware all that often and could, with less discretionary income, end up trading down when they finally have to.
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After its late-2000s downturn, Best Buy got back on its feet in part through launching a store-within-a-store partnership with Samsung, capitalizing on mobile gadget-mania to fill a gap left by shoppers defecting from Big Boxes to Amazon
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for big-ticket technology.
This time it seems Best Buy is not anticipating the emergence of a new must-have piece of consumer electronics hardware that sends people to stores in droves. Instead it’s bringing the hub to the emerging age-in-place customer.
Some Mental Exercises on Best Buy Health’s Future
The limitation I see to Best Buy Health is that people don’t really think “health” when they think Best Buy, even when the word “health” is appended to the name. Nor is the “Health” branding specifically geared towards age-related technology, it sounds more general. Thirdly, the offer seems to target a different customer base than the walk-in/online shopper looking for consumer electronics. Yes, a person using a suite of age-in-place technology could well be interested in new computers and devices, especially given older consumers being more tech savvy than ever today, but a younger person buying a laptop or a TV is not going to be a prime candidate to be converted to buying age-in-place tech, at least not personally; at least not right away.
I wonder, then, if it would benefit Best Buy to extend itself into health and wellness-related technology for a younger demographic, which could create a brand resonance that makes sense as they age into shopping Best Buy Health. Granted recent exercise technology has always seemed a bit feast-or-famine. We saw it with the frenzied adoption of FitBit and other health trackers followed by a big leveling off. We saw it with connected fitness recede from the talk of the locked-down world in 2020-2021 back to a niche as Peloton fell meteorically and Lululemon walked away from its expensively-acquired Mirror.
Still there could always be something new and more enduring on the way in home health tech. For instance, a recent Fast Company article points to gamification of exercise through all the fitness gadgets out there as a path to keeping people interested in connected fitness (and stemming the seemingly unavoidable tide of exercise attrition).
Meanwhile for the older demographic, partnerships with the new generation of ultra-modern assisted-living communities alongside the individual aging-in-place households could give Best Buy a thriving additional channel for seniors-focused technology (and maybe even have a Geek Squad office on-site for individual seniors communities).
How Far Will Best Buy Go With Age-In-Place?
A Best Buy focused on age-in-place/seniors-oriented tech solutions would be something quite different from the Big Box we’ve come to know. Maybe then, in the long run, it would be beneficial for Best Buy to separate the Best Buy Health brand from its consumer electronics roots entirely, taking Best Buy out of the name (or reducing its prominence) and giving it its own design aesthetic.
Then if there were, as I suggested, a selection of health-tech focused products in-store to build a customer pipeline from younger consumer electronics shoppers to older adults with different needs, it could be done in a store-within-a-store with the new endeavor’s branding. Such a change would leave space—on the floor and in the customer’s mind—for the Best Buy mother ship to both sell health-focused solutions and get in on the next big thing in consumer electronics, if and when it happens.
As an aside there will already, unfortunately, be more space to begin with in-store at Best Buy as of this year, since the DVD and Blu-Ray displays are all being removed. You can number me among those mourning Best Buy’s move to stop selling physical media and its broader implications for media consumption—but that is perhaps a topic for another day.