Best Buy’s UK debut

7am on a Friday morning in an unloved corner of Essex is an unlikely time and place for a new era in electricals retailing to start. But today in Thurrock, the renowned US retailer Best Buy was due to open its doors for the first time. UK electricals retailing is unlikely to ever to be the same again.

It is one store, on one retail park. But Best Buy has big ambitions for the UK and its reputation means that its big rivals - DSGi and Kesa - will know they need to be on top of their game to ensure that the new pretender doesn’t eat their lunch.

The man in charge of making Best Buy as big a presence in Europe as it is in the US is Scott Wheway. The former Boots and Tesco man developed a formidable reputation as a retail operator before leaving Boots with a small fortune following its takeover by Stefano Pessina and KKR.

He wanted to take his time before finding his perfect next role. Striding round the Thurrock store with a new Apple iPad under his arm, it appears he has found it. He says the challenge of reinventing electricals retail was what persuaded him to join. “I’ve been a lifelong early adopter,” he says. “Whenever I went into stores - except Best Buy in the US - I’d always find that I knew more about the products than the person serving me.”

Best Buy’s phenomenal reputation for service is the ace up its sleeve and while DSGi and Kesa have both worked hard to improve the electricals sector’s dismal reputation for hard selling and lack of product knowledge, Wheway is adamant that Best Buy’s ‘Blueshirts’ will put it in a different league.

Having come out of an intensive nine-week training programme, there was no mistaking their enthusiasm on what was admittedly a preview day for the media on Monday. But behind their bubbly exteriors, there is a serious reason why they have to know their stuff inside out, which is that according to Wheway, what Best Buy calls “the connected world” requires a whole different way of selling electronics.

“The old fashioned transaction -buying a phone, buying a PC - is about to disappear in a puff of smoke,” he says. He explains that a customer coming in thinking they want a PC might find, after consulting with a Blueshirt, that actually what they need is an internet-enabled TV. To further explain the point, he holds up his iPad - “What’s a phone today, what’s a slab?” he asks.

Announcing the brand

Communicating what’s different about Best Buy to UK shoppers is the biggest challenge it is going to face because beyond the techie community, the brand isn’t known. This week there was going to be what Wheway describes as “a lot of very tactical activity” to get the brand understood, and while he declined to go into details ahead of the launch, last weekend teams of Blueshirts were out as far away as Croydon explaining to people in the streets what makes Best Buy unique. A radio, print and online advertising blitz were also going to be part of the mix.

Best Buy Europe has a pedigree that means it has to be taken seriously, being a joint venture between Best Buy Inc of the US and Carphone Warehouse - which itself has built its success on an ethos of service and impartial advice and whose founder Charles Dunstone has been the pioneer of the connected world concept.

The impartiality ethos is crucial if Best Buy is to replicate its US reputation and staff are not on commission. Wheway stresses if the right solution for a customer is a cheaper option, then that’s what will be recommended. Customers can hook up with an energy supplier at Best Buy, but a tie-up with an exclusive supplier was avoided despite the better margin this would give.

But while service is Best Buy’s USP, Wheway knows being competitive on price has to be a given. “Price is the entry ticket to the game,” says Wheway, and Best Buy will offer customers a Price Match Guarantee if they find the same product cheaper elsewhere. “We’ve got a very strong competitive set,” he says, adding that it’s not just the obvious rivals like Currys and Comet but also online players like Amazon that represent serious competition.

Nothing is being taken for granted and one word that comes up time and again while interviewing Wheway is humility. He describes the store as “our first attempt to take customers through the connected world”, and freely admits that everything is up for review depending on what customers make of it, describing the store as “our best interpretation of three things: the DNA of Carphone, the DNA of Best Buy, and what we learnt from 18 months of research.”

He continues: “The O-level retailing lesson is that when you’re entering a new space it is important to have almost too much humility.

“On Friday morning when we open it will be the accumulation of a lot of work for a lot of people and they’ll be walking 10ft tall, but what matters when we close the doors is what we’ve heard from our customers.”

All in the DNA

The connected world concept bringing together mobiles, laptops and how people connect to the mobile web is one that UK customers get more than US shoppers at the moment, and Wheway thinks they will respond. What that means to Best Buy is it will enable the retailer to identify a customer’s other needs and then offer services and products that will meet them.

He gives the example of games consoles, sold in an area described as the Ultimate Games Experience room. The games are played on a 3D TV and the room is connected to the web, which allows the Blueshirts to talk to the customer about the customer’s internet account, and enter into a conversation about bandwidth. What these conversations do is in Wheway’s words give Best Buy access to other “profit pools”.

And that’s going to be vital because increasingly much of the hardware that Best Buy sells is going to be free. “Phones are free and all the profit is in connections, laptops are increasingly becoming free. Will it end there? Best Buy’s view is that we don’t think so.”

Seven stores have now been acquired and the plan is to open “eight or nine” this financial year in increments of four to six weeks. “We see this as a marathon, not a sprint,” says Wheway, who refuses to give a target number of stores, saying that finding the right mixture of channels - between big Best Buy stores, smaller Carphone Warehouse stores and the Best Buy website, which launches in the Autumn - remains to be seen. He refuses to give details of what will be offered on the website other than to say that Best Buy will be doing some “pretty cool and sexy things” online.

Best Buy’s competitors had plenty of warning of its arrival, although Wheway insists the plan was always to open the first store around about now. And they have responded - the giant Currys megastore round the corner was emblazoned with offers for 10%-off discounts at the time of visiting and has embarked on a barrage of advertising.

But Best Buy is different, and it’s not price but the culture the uber-keen Blueshirts exude that it sees as the differentiator, and why Wheway says he went to work there. “There are some similarities with Tesco, in terms of its scale, and there are some with Boots in that it requires the same level of specialism. What’s different with both Carphone Warehouse and Best Buy is they have a lot more fun. It’s an attitudinal thing.”

While the battle that is inevitably going to take place in Thurrock might be local for now, as Wheway and his team gradually increase the pressure on the accelerator, it will be replicated on a wider scale. There is going to be no rush - further stores will open in Southampton and Merry Hill in June, with Liverpool, Croydon and Bristol to follow and by giving warning of its arrival, Best Buy has given its UK rivals time to raise their game, and they have. But with its Thurrock store, Best Buy is setting the bar high for electricals retail in the UK.

Inside Best Buy’s first UK store

There is no mistaking Best Buy’s big blue box, perched in a prominent spot on the Lakeside Retail Park, in an area with one of the densest concentrations of out-of-town retail anywhere in the UK.

The incumbent electricals retailers have borrowed a lot of ideas from Best Buy’s US stores over the past few years, but nevertheless, the interior of the store is quite distinct from its UK rivals. Set around a racetrack, the density of stock is low - eschewing the ‘wall of washing machines’ approach now employed by DSGi and pioneered by Best Buy in the US - and the store is very easy to navigate.

One distinct point of difference is the Green Tech area, immediately to the right of the entrance, which Best Buy Europe chief executive Scott Wheway says was the result of the customer insight work done ahead of the launch, showing that “customers were really interested in our green credentials”. Inevitably the £89,000 Tesla electric car inevitably catches the attention - “it gives the area a bit of va-va-voom,” in Wheway’s words - but there is also a wide range of electric bikes and scooters, and green devices. Wheway says that on a trial opening day last week, eco-buttons for PCs - which simply switch it into hibernation mode when not being used - were big sellers.

The centrepiece of the store though is the connected world area immediately in front of the entrance, with phones to the left and computing to the right. Almost all products - which are given plenty of space and displayed on low-light pine tables - in the store are connected for shoppers to try and the Blueshirts and Geek Squad help proposition are strongly in evidence.

Along the left hand wall are home appliances and the right is games. One nice touch is what’s called the Ultimate Games Experience room, a darkened room where customers can try out the latest games and consoles. It is in a private room, Wheway explains, because many customers like to be able to try out the most popular 15- and 18-rated games.

Further back inside the racetrack are cameras and MP3 and MP4 players, then, as in Best Buy stores in the US but unlike in UK electricals stores, DVD and CD areas. Wheway says that selling Blu-ray discs in particular is a no-brainer because people want films to watch on their new home cinema kit, but admits that music is less of a dead-cert, saying “we’re going to give it a go”.

At the back is the home theatre area, with three sumptuously fitted out rooms dedicated to allowing real video and audio enthusiasts to try out what Best Buy calls “video immersion”, “3D and HD TV immersion” and “audio immersion” respectively.

For those who have seen Best Buy stores in the US, a lot of it won’t be radically different, but there are significant adaptations for the UK market, the Green Zone and the focus on the connected world particularly. It is unquestionably different to what has gone before in the UK and is well worth a visit.