Can Best Buy get geekier?
With a new concept store, Business 2.0 Magazine reports, the electronics giant tries to lure more young nerds.
(Business 2.0 Magazine) -- Best Buy may seem to be in an enviable position. The Minneapolis-based company's 800 stores account for 17 percent of the retail electronics business in the United States, and its share price rose 10-fold during the past decade.
But keeping up that kind of growth is tough - especially when many younger, savvier customers are spurning the limited selection, bland decor, and sales tax of big-box retailers for cheaper, hipper online outlets.
Now Best Buy is opening experimental stores focused on desirable niches. Soccer moms, for example, get Studio D in the Chicago suburb of Naperville, with personal shoppers and classes in how to use a digital camera.
The young gadget geeks at the top of Best Buy's must-have customer list get Escape, in Chicago's swanky Lincoln Park neighborhood. Designed to look like a nightclub, Escape offers brand-new products that other Best Buys don't carry, as well as a snack bar and videogame-testing rooms with comfy couches and high-end TVs that are rented out by the hour.
The company doesn't know yet if Escape is an experiment worth repeating. "To understand a market, you need to have something out there for two or three years to see if it could be sustainable and profitable," says James Damian, senior vice president of Best Buy's experience development group. "It's a learn-and-earn model."
The experts sound off:
Jack Murphy Equity research analyst, William Blair & Co.
I've been there, and it's certainly different. The employees are encouraging you to play with everything, and the products are truly cutting-edge. But it's not going to be a mass-retail concept. It could be one or two stores in large markets where there are young professionals with money to spend.
Dennis Fong Former pro gamer; co-founder, Xfire
I buy the majority of my stuff online. But I'm more likely to walk into this store than Best Buy, which doesn't feel cool or lively - I know more about gear than people who work there. People would feel more comfortable testing games in a fun, laid-back setting than under fluorescent lights at Best Buy.
Best Buy clerk North Riverside, Ill.
We've experimented with setting up a lot of televisions for people to try videogames, and we had a problem because little kids would hog them for two or three hours. But we couldn't kick them out of the store either - being rude isn't part of the environment we're trying to create.
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