Don't Worry So Much About Best Buy; VARs Have The Edge In Small-Biz Service
I have some firsthand knowledge of the quality of service offered by The Geek Squad. If my experience is any indication of Best Buy's overall ability to execute in services, you should encourage customers to try them. Just make sure your customer has your telephone number, because it won't be long before you get a call back begging for real service.
All that aside, let's sit back and try to analyze this more deeply and unemotionally. Best Buy's core competency is delivering a stellar buying experience. Unlike CompUSA, whose floor clerks always seem to be too busy rearranging and stocking shelves to offer advice, Best Buy generally has someone ready and able to answer questions. Its stores are well designed, its checkout is fast, and it is certainly price-competitive.
If you can shrinkwrap a technology product and fit it on a shelf, Best Buy can probably sell it efficiently. If the product is under warranty and needs to go back to the manufacturer because it's broken, Best Buy can box it, ship it and rebate your money. The Geek Squad, meanwhile, can provide very basic services including setting up small wireless networks, adding a hard drive or other simple tasks.
What it has no experience doing is delivering consulting services that require analysis of a customer's needs, adding proprietary or complicated software, and making technology drive business-process efficiencies. That's what VARs do well.
So, beyond consumers, who else is likely to buy at Best Buy and look for services from the retailer? I would argue that sole proprietors or very small businesses with only the most basic technology requirements might be appropriate.
The minute that a small business needs to install a server or do more than share an Internet connection and a printer, however, it is going to be out of Best Buy's league.
But let's assume Best Buy wants the high-end small-business market. Then I would argue the advantage is yours because Best Buy's current services model will not work. It employs technicians of limited capabilities who are anything but highly skilled and highly paid. They really don't need to be to perform the level of services offered by The Geek Squad. But we all know that highly trained technicians who can install and configure servers to run critical customized applications for companies of 25 employees or more are not inexpensive. Sales for these sorts of services can't be closed in a few minutes in a store. They take weeks and sometimes months of hard, up-front consulting.
Best Buy has no experience in that more complicated sales model, and entering it will not be easy unless the company partners with VARs. Therein lies the opportunity. In the end, what Best Buy will want is the product sales and the really low end of the services business. It's equipped to handle this. If it does get requests from customers needing more robust services, my bet is it will look to outsource that service in an attempt to capture the product sales.
Best Buy ultimately may become a source of service sales leads in small businesses as this plays out.
If the retailer doesn't go in that direction, my bet is it's going to begin posting some very unattractive profit numbers as it attempts to build an expensive services organization. Wall Street, in turn, is very unforgiving about this sort of thing.
So stop worrying.
Make something happen. I can be reached at (781) 839-1202 or via e-mail at [email protected].