Best Buy thinks outside the big box

By Tom Krazit
Staff Writer, CNET News.com

Published: March 20, 2006, 4:00 AM PST

Last modified: March 20, 2006, 7:40 AM PST

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In several concept stores located in the Midwest, Best Buy is gathering data about consumer behavior in retail outlets that are quite different from the "big box" stores normally associated with America's largest consumer electronics retailer. The new stores, with names like Eq-life, Studio d and Escape, are helping Best Buy understand how to improve the shopping experience of a new class of technology buyers.

High Impact

What's new:

Best Buy is testing a number of concept stores that are helping the retailer understand how to improve the shopping experience of a new class of technology buyers.

Bottom line:

Consumer electronics are starting to appeal to different types of customers than they did five or 10 years ago, and the industry is recognizing that these consumers are a driving force behind technology purchases and that traditional marketing strategies don't necessarily appeal to them.

Eq-life is about a year old, while Studio d and Escape have been up and running for about a year and a half, said Dawn Bryant, a Best Buy spokeswoman. Eq-life sells "health and wellness technology products" such as heart defibrillators for home use, she said. Studio d focuses on women looking to learn more about technology products such as digital cameras or notebook PCs, while Escape is filled with flashy video games and powerful electronics.

"We want to learn more about customers and what they like to buy. That information feeds how we serve customers in our other Best Buy stores," Bryant said. Eq-life and Studio d are not publicized as Best Buy affiliates, but Escape does note that its products are supplied by Best Buy.

Consumer electronics are starting to appeal to different types of customers than they did even five or 10 years ago, said Stephen Baker, director of industry analysis at NPD Techworld, which focuses on technology retailers. For one thing, the industry has recognized that women are a driving force behind technology purchases and that traditional marketing strategies don't necessarily appeal to them, he said.

Retailers believe that women want to understand how a technology product works and fits into their homes before they take it home, Baker said, leading to interest in stores such as Studio d that focus on education and a more personal sales approach. Studio d, in the Chicago suburb of Naperville, Ill., schedules classes and one-on-ones focused mostly on the digital camera, in hopes of creating "an experiential environment around preserving memories," Bryant said.

Escape, on the other hand, is going after the customer most retailers covet: the young male video gamer. Most retailers believe this customer spends more money than the average technology buyer and is obsessed with whatever is new and cool, Baker said. Best Buy has to know what this type of customer wants to entice that customer into a Best Buy store, and it can experiment with different strategies at Escape's Chicago store, he said.

Eq-life appears ready to cash in on the needs of aging baby boomers for health products and services, such as pedometers, massages, and yes, personal defibrillators. It has three locations in the Minneapolis/St. Paul area.

Web sites have become the preferred channel for many technology shoppers. But Best Buy, Circuit City and Wal-Mart Stores are still making money on consumers who want to see technology in person before buying it. The idea behind stores like Studio d and Eq-life is to find out how to keep people coming back to retail by offering an experience that can't be duplicated online, and one that's different from typical large retailers.

Over the last nine to 10 months, Circuit City has been testing out some ideas that would appeal to specific types of customers in stores located in South Florida and Boston, said Amanda Tate, a company spokeswoman. She declined to comment further on what the company had in mind with those new stores.

The idea of taking instructional classes for technology products appealed to Gigi de Guzman, a shopper interviewed while browsing at a San Francisco Best Buy store. "I signed up for Home Depot classes, so why not?" she said. Home Depot offers how-to classes on things like installing tile or gardening that appeal to some women otherwise turned off by Home Depot's warehouse shelves filled with lumber and tools.

Simple ideas like educational classes or in-store tutorials would improve the customer experience in stores like Best Buy, de Guzman said. She recalled visiting a technology store in New York that used a touch screen flat-panel display to let potential customers walk their way through product features and specifications, which beat trying to track down a salesperson.

Best Buy can take the feedback from its experimental stores and make subtle changes to the way it displays products in its flagship stores. For example, the store could place external hard drives or wireless networking products next to digital cameras to create a photo archiving center.

"Not everything is applicable or transferable, but you try to roll out as much as you can into the big stores," Baker said.

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