Best Buy and Consumer Habits

Quickly evolving from its origins as small scale music and record provider in the early 1960s, Best Buy rapidly found a niche market in offering comprehensive and large-scale distribution and presentation of consumer electronics to the retail market. The mass market, however, reacted strongly the saturation of the consumer electronics industry and thus Best Buy, based on its own research, began to move away from the traditional sales representative method of consumer interaction towards one that favored a holistic approach in selling entire entertainment systems directly to the market. The strong understanding of consumer motivation and behavior that Best Buy has gained through its research provides the basis for the company's continued success in the years since its inception. Finding it difficult to compete with the larger companies of Walmart and other international distributors, Best Buy quickly realized that the idea of challenging mass distributors on their own turf was an exercise in futility and rapidly changed its business model towards offering full-service installation, recommendations, and maintenance packages in lieu of directly competing with the sheer volume of its rivals (Wolf, 2012, p. 23). This strategy of orientating the company towards a niche market that its competitors had not seized enabled both rapid growth and a reliable base of consumer support from which further expansion efforts could be conducted. 

The case study of consumer electronics giant Best Buy offers a clear example of a company that effectively developed and utilizes a unique business model of marketing directly to consumers in what the company calls “consumer centricity”. Basing its operations on the idea of marketing a holistic package to prospective consumers, Best Buy successfully differentiates itself from its competitors by designing its products around what it has identified as the five primary types of consumer: the technology professional, the “soccer mom”, the “early adopter”, the “practical adopter”, and small business owners. These five groups are the central markets by which Best Buy aims to offer its services and does so by researching and testing the purchasing habits of individuals in each of these various strata. This is where social forecasting can benefit the company. 

Understanding consumer behavior is critical to the methodology of Best Buy's marketing strategy. The “consumer centricity” model promoted by Best Buy focuses on the five major consumer groups and thus enables the company to effectively mass appeal its products to a broad swath of similar consumers, yet at the same time, this endeavor cost a great deal of money to execute properly and drained substantial profit from the company. The obvious advantages of marketing popular product systems across broad swaths of consumer preferences were counterbalanced by the expensive and difficult task of re-training and changing store personnel and shops to implement the new strategy. 

Men and women differ greatly in their buying habits when inside a Best Buy store. Men greatly prefer tinkering and interacting with the devices they might purchase, whereas women tend to prefer having an authoritative sales representative speak and guide them through the list of products available. Thus, Best Buy adopted a strategy of compromise for both sexes—by having experienced representatives take prospective consumers through each of the products offered and give the customer an interactive tour of the materials, the company effectively appeals to both the male and female minds of consumer behavior. 

Objective criteria for women include the physical layout of the store, such as the measurable aisle lengths, softer colors, and lower sounds levels. Subjective criteria include having the sales representative actually walk the consumer through the store and show them exactly how the products offered will interact in the home and workplace. These approaches, both objective and subjective, are effective methods by which Best Buy applies consumer psychology to match buying habits, and how the company pushes itself towards creating an atmosphere welcoming to women and that encourages spending.

As a company that still operates largely from a brick-and-mortar business model, Best Buy faces serious challenges in the future from the advent of increased online sales and e-commerce. If consumers no longer need to physically visit a store, much of Best Buy's “consumer centricity” approach falls to pieces, and the attempts to make stores more accessible to male and female purchasers are in vain (Zimmerman, 2012, pp. B1-B2). Thus, while Best Buy has a thriving e-commerce business and can offer sales and holistic system packages all online, the company nonetheless is, at its core, an electronics store based on the idea of consumers walking in and interacting with sales staff in an environment scientifically designed to promote positive spending habits. 

References

Wolf, A. (2012). Best Buy begins layoffs of 2,400 employees. TWICE: This Week In Consumer Electronics, 27(15), 14. 

Wolf, A. (2012). Best Buy's Dunn endorses multichannel strategy. TWICE: This Week In Consumer Electronics, 27(2), 4-29. 

Zimmerman, A., & Banjo, S. (2012, October 12). Best Buy Plays Web Hardball. Wall Street Journal - Eastern Edition. pp. B1-B2.