Let's talk about two of my favorite subjects gaming and the future. In this post I will talk about Motion based gaming, Mobile Gaming, and 3D gaming.
Motion based gaming
So, Microsoft has launched the Kinect and Sony with the Move. Although I am happy to see motion gaming getting some attention from these companies I think they are about 2 years too late. Nintendo already did this and dominated the market doing it by exploiting a time where social gaming was on the rise with Guitar Hero and it's clones. Nintendo was actually pretty content to be number 3 in the industry making a gaming system instead of an entertainment system.
I want to go on record and say that these two copies of the Wii are very likely to fail. Let me explain why, and hopefully someone makes the right moves to correct some of these missteps.
First and likely most important, the content. I have been a gamer since the Intellivision and I haven't seen a single console/accessory that was successful without having amazing games. Check the end of this post for an appendix of those failures. If Microsoft and Sony want their add-ons to be successful they will need to get a strong game that their core audience wants. My Fix: Court a franchise like Call of Duty, Madden, or Street Fighter to build a motion version of one of their games; the most important thing about getting one of these is to avoid gimmicks and to build something that is native to the system and flows well - gimmicks get old quickly as I am sure many dusty Wii owners can tell you.
Second, they should have waited until their next generation of consoles. As stated before it is an accessory - which means that each company has several million consoles out there already. Even if 60% of the customers who own a system were to upgrade to this accessory that means you have a much smaller market to sell games meaning less developers want to make a game for it - which leads back to the first point. It is for the same reason that the Apple operating system has a lack of viruses. My fix #1: Give the accessory away - make sure everyone that has a system gets one. Not a great option because these things are expensive. My Fix #2: Come up with something that makes people want to have it, perhaps an awesome new game...
Third, its been done. The Wii has been out for four years (as of 11/19). That is 4 years of motion based gaming. Nintendo has been very successful with 100s of non-essential accessories for the Wii. Nintendo took the market by storm by going where the gaming business was headed. Sony and Microsoft are playing catch up to something that happened 4 years ago, which ever company can see what is coming next is going to have the upper hand for the future. My Fix: Obviously this is done, but make sure you are focused on what is coming next.
Mobile Gaming
Two words make me excited about the future viability of Mobile Gaming, "Angry Birds". This has quickly become one of the most downloaded games on a smart phone. Mobile gaming helps bridge the gap between hardcore gamers and the mainstream audience, this is important for keeping gaming alive and to keep thriving it gaming has to have mainstream appeal.
Let's not forget about the gamers though. Touch screen gaming is fun, but it is more of a vacation from gaming than a fulfillment for a hardcore gamer. Most gamers want to have the control that you will currently only find in a hardware based peripheral (i.e. a controller). If someone wants to dominate the market right now someone would develop a universal controller for smartphones. (I hope those involved with Rocketfish/Insignia are reading this part) The idea is simple, it would connect to Android/iOS based phones via either a data cable or Bluetooth. It would have a universal mount on the top so that you could place your phone inside, and it would have an extra battery inside (like the Zagg Sparq) so that you could charge your phone while playing. It would be awesome if there was some sort of phone storage on the device as well, so that it could all fold up and turn into a hip pouch.
The other big thing that is missing from smartphone gaming is the social element. The iOS based phones have some games that allow for this, but what I am looking for is a first person shooter (e.g. Doom, Call of Duty, CounterStike) that is able to be played on a smart phone against other people playing the game. Eventually as these phones become more powerful - why not allow them on existing gaming networks like Xbox Live (like Shadowrun for the where PC and Xbox 360 users played against each other).
When these things happen I would imagine we will have to look at combining Best Buy Mobile with our gaming department. Look at the rumors on the PSP - a reminder of the NGage; which is a device that was unfortunately ahead of its time.
When the big console gaming companies start releasing their content on smartphones we will see an explosion and a game changer. I hope we are modeling our business for these eventual future when games are no longer purchased in a physical form (will it be the death of GameStop?)
3D gaming
When I first sat down in front of a current version of a 3D Tv, I was excited by the possibilities that are offered for gaming. Immersion is the quality of a good game, if the game is good enough the outside world melts away and you become a part of the game. 3D is a tool, like anything else, and if used properly I feel that there are going to be a slew of amazing games using this technology. Kudos to Nintendo for bringing a 3D experience without glasses to E3, and hopefully soon to the general public. As more and more people experience the medium the greater the likelihood for good games to be generated in the future.
I personally believe that we will see a huge push for first person shooters and sports games done in 3D coupled with motion gaming. Not only are you performing the action, shooting, passing, running, dodging, etc, but it is happening in 3D - which should be doing a pretty good job of tricking your brain into thinking you are in the game - which leads me back to the immersion that I was talking about earlier.
My advice is to watch people play a games they are really in to. Whether it is Madden, Call of Duty, World of Warcraft. If they get really into the zone, sometimes they reach a Zen state where they can find their calm center and the rest of the world doesn't matter. Immersion is an awesome thing to experience, it is the thing that many gamers are chasing out there.
A brief Appendix of failed accessories:
The Multitap - This device was created to allow for additional players on various consoles, in fact it was tried several times for systems like: Nintendo Entertainment System, Sega Mega Drive, Sega Genesis, Atari Jaguar, Sega Saturn, Sony PlayStation, and Sony PlayStation 2. Eventually console manufacturers created consoles that were capable of 4 players, making a Multitap unneeded and increasing the percentage of games that allow for 4 players.
Light guns - These guns were able to be pointed at the screen and register where they were shooting. An amazing idea, but with the exception of the Zapper these were not bundled with the original system. The shooting games requiring light guns flopped, most of the games were terrible for one reason or another, the guns weren't as accurate as people wanted them to be either. Other notable mentions in the light gun category: The Menacer and the Super Scope.
The Powerglove - This alternative controller for the NES was an amazing piece of technology, but a huge failure. One of the biggest reasons for the failure was that it release in the US with two games (only 1 game in Japan). It was so technically advanced that it wasn't matched in ability until the Wii controller 15 year later. This device helps prove the point that no matter how awesome an accessory - without games it will fail.
XBand and Sega Channel - These services were ahead of their time as well but likely paved the way for a better Xbox Live and Playstation network. These were early attempts at online gaming and providing online content, the problems were that the technology was too slow to support gaming and that there weren't enough people interested in adding to their existing console.
The Sega Activator - This was an amazing idea based off of the light harp. It was an octagon that was laid on the floor, players would break the plane above the octagon to do different in game moves. One of the problems were that it was too expensive $80 (which close to the cost of the Sega Genesis console which was either $99 or $149 when the activator came out). Another problem was that it was inaccurate, being thrown off by all sorts of things, like the ceiling/floor not being 100% parallel.
Others that I am not going to describe are: The Atari Mindlink, R.O.B., Playstaion Eye, Xbox Vision, the Game Cube(not an accessory, but a failure just the same), Nintendo Powerpad, Trance Vibrator, Roll&Rocker, 32x, SegaCd, and lets do our best to forget the Virtual Boy.
Wednesday, November 17, 2010
Best Buy Digital Magazine
Today I read an interesting post by Barry Judge, "We should launch a ipad style magazine with editorial content focused on the connected world. New avenue for Best Buy On as well?"
I thought it was an amazing idea, and I think 140 characters to be too limiting for my honest response so I will post it here.
The idea is great, but to expand on it iPad's and other tablets are going to have a small penetration this year, sure there could be anywhere from 13-30 million sold over the next 12 months, but I think that we should expand the idea to cover all iOS and Android platform devices. This would give Best Buy a huge number of devices that will support our effort.
Beyond that I think that it would provide a great opportunity to educate our customers around the connected world by writing how to guides with links to videos, pointing out new and emerging technologies, and also a platform for explaining some of the value propositions of our brand that will help customers use technology to improve their lives.
As Timothy Young asked about the @Gamer magazine, which brings me to my next point. We have various printed materials all around the store, ranging from @Gamer which is an amazing gaming magazine to First Glimpse to the department guides (Digital Imaging Gaming, Movies, and Home Theater). These are all things that could be rolled into the same magazine or better yet maintained as separate entities that have the ability to link to one another - or at least make mention of the other pieces that are out there.
I thought it was an amazing idea, and I think 140 characters to be too limiting for my honest response so I will post it here.
The idea is great, but to expand on it iPad's and other tablets are going to have a small penetration this year, sure there could be anywhere from 13-30 million sold over the next 12 months, but I think that we should expand the idea to cover all iOS and Android platform devices. This would give Best Buy a huge number of devices that will support our effort.
Beyond that I think that it would provide a great opportunity to educate our customers around the connected world by writing how to guides with links to videos, pointing out new and emerging technologies, and also a platform for explaining some of the value propositions of our brand that will help customers use technology to improve their lives.
As Timothy Young asked about the @Gamer magazine, which brings me to my next point. We have various printed materials all around the store, ranging from @Gamer which is an amazing gaming magazine to First Glimpse to the department guides (Digital Imaging Gaming, Movies, and Home Theater). These are all things that could be rolled into the same magazine or better yet maintained as separate entities that have the ability to link to one another - or at least make mention of the other pieces that are out there.
Friday, May 14, 2010
Social Media Specialist
For those who are interested this update is a presentation of an idea for a new role:
CASE FOR CHANGE
Currently the world is more connected than it ever was in the past. People are using social networks to connect to businesses, talk about their experiences, and to research new product. Best Buy has been pushing into the social sphere with initiatives like Twelpforce and developing relationships with different companies including Google, Foursquare, Facebook, and Twitter. Our customers continue to use the telephone to communicate, but they have shown that they are willing to have the conversations with or without us in social media. Our corporate office has given guidelines, but has been very clear that they are looking for the field to develop and innovate in the social space.
THE ROLE
The Social Media Specialist would be responsible for driving growth in our stores through a combination of utilizing social networks along with participation in community and in-store events. Each participating store in the district would select an associate to become a Social Media Specialist. The initial structure will require 20-30 hours a week. The initial test will run for 6 months, while we evaluate the impact of the role.
RESPONSIBILITIES
Twelpforce/BBYFeed.com
Twelpforce is currently a large part of the Best Buy social media strategy. Anyone in this role should be an active member of Twelpforce due to the unique nature of the program. There are many best practices that can be learned from participation in this program. More than 25,000 questions have been answered by the 2,600 associates working with Twelpforce. Now with the new BBYFeed tool, currently in beta testing, there is increased visibility of customer questions.
Twitter/Facebook
By using Twitter and Facebook page at the local level gives us an ability that very few retailers have started utilize, which is an advantage that where can capitalize. These are two of the fastest growing mediums in the world of social networking. We can use both forms for the purpose of marketing, customer contact, and around general awareness. Awareness works in both directions, making our customers more aware of our offers and making us more aware of the needs of our customers.
Other Social Media (YouTube, Flickr, FourSquare, etc...)
Although Facebook and Twitter are among the largest social media networks in existence, they don’t always provide the same opportunities as other tools that are available. The social media specialists need to be cognoscente of all of the tools they have at their disposal. This could include providing demonstrations of cameras through Flickr, PodCasts presented through YouTube, or promotions for checking in through FourSquare.
Blogging
Blogging exists in so many different forms, making this is a very general term. In this context we would leverage a weekly/bi-weekly editorial around various technologies in our store. These could range from “Why should I own a compact camera and a D-SLR?” to “What’s and E-Reader?” These articles would be handed out to customers as a stacking tool in stores, along with being posted the store’s Twitter feed and Facebook page.
Local Marketing and Event Planning
This includes coupon creation, local website management and maintenance, and event planning. This person will be responsible for utilizing RMT for approval. Social media specialists will also be responsible for communicating upcoming events and recaps of those events through the social media networks. Communication around donations and store participation in events also fall into the marketing category as well, the good acts that we do in our communities should be communicated in the name of transparency.
Leadership Meetings
These individuals should present weekly at the leadership meetings to keep the store leadership informed around news in the social media side of the business. This will also give the opportunity for the leadership team to be able to inform around upcoming events or other areas where they may have increased visability.
SELECTING INDIVIDUALS
The ideal individuals will be those who are familiar with and have a passion for social media. A person who can manage multiple tasks at once, is able to establish rapport, and able to speak to the Best Buy brands. If demand warrants more associates may be put in this role, with each taking different portions as a focus, such as dividing social media and community events.
BEGINNING THE EXPERIMENT
After all stores are given the opportunity to select individuals, a meeting at the district office would be organized to explain best practices, exchange contact information, and clearly land the expectations of the role. This meeting will also give the opportunity to discuss any questions the individuals may have. After this meeting the social media specialists would be able to begin their rhythms, with a bi-weekly conference call to ensure that best practices are being exchanged and to establish a rapport between these individuals. Eventually the conference call would move to one a month as these individuals become more comfortable with their roles.
Social Media Specialist
Position Summary
During a test period of 6 months one representative from each participating store will focus on achieving growth through connecting with our local community with social media. This position will utilize various methods of reaching out to our community in order to acquire new customers, retain existing customers, and to emphasize our role in the community.
Key responsibilities (with % of time)
1. Updating and creating social media profiles on a daily/weekly basis, along with communicating with our customers. These sites include Facebook, Twitter, blog sites, local store pages, and email. Utilizing these tools the Social Media Specialist will inform around in store events, community events with store participation, and to answer questions and concerns from customers in our local area. (30%)
2. Coach and train store associates around the use of social networks, Twelpforce, communicating community events, and explaining best practices and proper usage of social media. (20%)
3. Using RMT to maintain the local store page to represent in store events, community events, and provide a contact path for the store. (20%)
4. Attend local events with a goal of creating ongoing relationships with members of the community and to represent and promote the brand in a physical capacity. Develop partnerships with local groups that match the store’s growth plan, targeting various groups such as schools, military, law enforcement, and fire departments. Work with store leadership to create in-store events. (15%)
5. Partner with the various internal groups such as the Viewpoint committee, Local Wolf Pack, and BBFB to work with all aspects of the community. Attend meetings and host conference calls to review growth and impact in each area. Spearhead tag awards, @15, teach awards and assist with local acquisition by utilizing zip code analysis. (15%)
Position Impact
This position will report directly to the GM and DM. It will directly impact and be evaluated by the following key business metrics:
1. True Blue CSI
2. Customer Acquisition and Retention
3. Number of Fans/Followers Facebook/Twitter
4. Hits to local web pages
5. Marketing coupon redemption
6. Number of events scheduled and attendance
7. Comp results
8. Twelpforce questions answered
9. Review of blogs and social media content created
CLOSING STATEMENT
This role will serve as a cog in our social media network. This is a space that changes constantly and to stay relevant we must press ourselves into it. One of the greatest things about Best Buy is the strength of our people and their ability to innovate around the business. Our people perhaps are our greatest asset, and this role is just another example of our company utilizing our people to do things that our customers expect. In some cases our associates are already doing fulfilling parts of this role, through Twelpforce our associates are already making personal connections to our customers. We already seek to educate customers through our Geek Squad blog, which is written primarily by field agents. There are hundreds of stores with Facebook pages, along with hundreds of stores that are using Twitter. This role creates a single person who is responsible for managing this content along with promoting growth in this area. These individuals will help to create a social culture in their store along with connecting the store more deeply to the local community. Furthermore, by creating this position tell the community that we are interested in connecting with them beyond just trying to sell them something, this transparency has been one of the pieces in the success story that Twelpforce has been writing for nearly a year.
CASE FOR CHANGE
Currently the world is more connected than it ever was in the past. People are using social networks to connect to businesses, talk about their experiences, and to research new product. Best Buy has been pushing into the social sphere with initiatives like Twelpforce and developing relationships with different companies including Google, Foursquare, Facebook, and Twitter. Our customers continue to use the telephone to communicate, but they have shown that they are willing to have the conversations with or without us in social media. Our corporate office has given guidelines, but has been very clear that they are looking for the field to develop and innovate in the social space.
THE ROLE
The Social Media Specialist would be responsible for driving growth in our stores through a combination of utilizing social networks along with participation in community and in-store events. Each participating store in the district would select an associate to become a Social Media Specialist. The initial structure will require 20-30 hours a week. The initial test will run for 6 months, while we evaluate the impact of the role.
RESPONSIBILITIES
Twelpforce/BBYFeed.com
Twelpforce is currently a large part of the Best Buy social media strategy. Anyone in this role should be an active member of Twelpforce due to the unique nature of the program. There are many best practices that can be learned from participation in this program. More than 25,000 questions have been answered by the 2,600 associates working with Twelpforce. Now with the new BBYFeed tool, currently in beta testing, there is increased visibility of customer questions.
Twitter/Facebook
By using Twitter and Facebook page at the local level gives us an ability that very few retailers have started utilize, which is an advantage that where can capitalize. These are two of the fastest growing mediums in the world of social networking. We can use both forms for the purpose of marketing, customer contact, and around general awareness. Awareness works in both directions, making our customers more aware of our offers and making us more aware of the needs of our customers.
Other Social Media (YouTube, Flickr, FourSquare, etc...)
Although Facebook and Twitter are among the largest social media networks in existence, they don’t always provide the same opportunities as other tools that are available. The social media specialists need to be cognoscente of all of the tools they have at their disposal. This could include providing demonstrations of cameras through Flickr, PodCasts presented through YouTube, or promotions for checking in through FourSquare.
Blogging
Blogging exists in so many different forms, making this is a very general term. In this context we would leverage a weekly/bi-weekly editorial around various technologies in our store. These could range from “Why should I own a compact camera and a D-SLR?” to “What’s and E-Reader?” These articles would be handed out to customers as a stacking tool in stores, along with being posted the store’s Twitter feed and Facebook page.
Local Marketing and Event Planning
This includes coupon creation, local website management and maintenance, and event planning. This person will be responsible for utilizing RMT for approval. Social media specialists will also be responsible for communicating upcoming events and recaps of those events through the social media networks. Communication around donations and store participation in events also fall into the marketing category as well, the good acts that we do in our communities should be communicated in the name of transparency.
Leadership Meetings
These individuals should present weekly at the leadership meetings to keep the store leadership informed around news in the social media side of the business. This will also give the opportunity for the leadership team to be able to inform around upcoming events or other areas where they may have increased visability.
SELECTING INDIVIDUALS
The ideal individuals will be those who are familiar with and have a passion for social media. A person who can manage multiple tasks at once, is able to establish rapport, and able to speak to the Best Buy brands. If demand warrants more associates may be put in this role, with each taking different portions as a focus, such as dividing social media and community events.
BEGINNING THE EXPERIMENT
After all stores are given the opportunity to select individuals, a meeting at the district office would be organized to explain best practices, exchange contact information, and clearly land the expectations of the role. This meeting will also give the opportunity to discuss any questions the individuals may have. After this meeting the social media specialists would be able to begin their rhythms, with a bi-weekly conference call to ensure that best practices are being exchanged and to establish a rapport between these individuals. Eventually the conference call would move to one a month as these individuals become more comfortable with their roles.
Social Media Specialist
Position Summary
During a test period of 6 months one representative from each participating store will focus on achieving growth through connecting with our local community with social media. This position will utilize various methods of reaching out to our community in order to acquire new customers, retain existing customers, and to emphasize our role in the community.
Key responsibilities (with % of time)
1. Updating and creating social media profiles on a daily/weekly basis, along with communicating with our customers. These sites include Facebook, Twitter, blog sites, local store pages, and email. Utilizing these tools the Social Media Specialist will inform around in store events, community events with store participation, and to answer questions and concerns from customers in our local area. (30%)
2. Coach and train store associates around the use of social networks, Twelpforce, communicating community events, and explaining best practices and proper usage of social media. (20%)
3. Using RMT to maintain the local store page to represent in store events, community events, and provide a contact path for the store. (20%)
4. Attend local events with a goal of creating ongoing relationships with members of the community and to represent and promote the brand in a physical capacity. Develop partnerships with local groups that match the store’s growth plan, targeting various groups such as schools, military, law enforcement, and fire departments. Work with store leadership to create in-store events. (15%)
5. Partner with the various internal groups such as the Viewpoint committee, Local Wolf Pack, and BBFB to work with all aspects of the community. Attend meetings and host conference calls to review growth and impact in each area. Spearhead tag awards, @15, teach awards and assist with local acquisition by utilizing zip code analysis. (15%)
Position Impact
This position will report directly to the GM and DM. It will directly impact and be evaluated by the following key business metrics:
1. True Blue CSI
2. Customer Acquisition and Retention
3. Number of Fans/Followers Facebook/Twitter
4. Hits to local web pages
5. Marketing coupon redemption
6. Number of events scheduled and attendance
7. Comp results
8. Twelpforce questions answered
9. Review of blogs and social media content created
CLOSING STATEMENT
This role will serve as a cog in our social media network. This is a space that changes constantly and to stay relevant we must press ourselves into it. One of the greatest things about Best Buy is the strength of our people and their ability to innovate around the business. Our people perhaps are our greatest asset, and this role is just another example of our company utilizing our people to do things that our customers expect. In some cases our associates are already doing fulfilling parts of this role, through Twelpforce our associates are already making personal connections to our customers. We already seek to educate customers through our Geek Squad blog, which is written primarily by field agents. There are hundreds of stores with Facebook pages, along with hundreds of stores that are using Twitter. This role creates a single person who is responsible for managing this content along with promoting growth in this area. These individuals will help to create a social culture in their store along with connecting the store more deeply to the local community. Furthermore, by creating this position tell the community that we are interested in connecting with them beyond just trying to sell them something, this transparency has been one of the pieces in the success story that Twelpforce has been writing for nearly a year.
Wednesday, May 5, 2010
Salaried (non-exempt) Supervisors and Full Time associates
I have been kicking this idea around for a while and thought it was time to put it on the blog. Essentially when talking about SG&A labor is brought up as the biggest or only controllable expense. Although, I completely disagree with this thought process I will embrace it and see what we can do to make the business more efficient and more profitable.
The Model
Supervisors and Full-Time associates would be moved from hourly to salaried. During most of the year (January 31st– October 1st) these associates would work 32 hours a week. During the holiday rush these associates would work around 50-55 hours a week. Each week associates would be scheduled as normal (based in traffic and other metrics), with a certain number of associates scheduled as on-call. The on-call associates would be expected to report to the store within 1 hour of a call. During the larger part of the year associates would typically be scheduled for 4 – 8 hour shifts and one day of on-call; with the on-call portion being scheduled as well. Associates would typically also have 2 weeks with on-call shifts, and then 2 weeks without, rotating through the months. During the holidays associates would either be scheduled for 5 – 8 hour shifts, with the possibility of being asked to stay up to 4 hours later each shift, or be scheduled for 4 – 10 hour shifts, with 1 on call day. These would alternate every two weeks in a similar manner to the on-call rotation mentioned earlier.
Why?
The customer benefit is that our stores would be constantly staffed, and in the event that the store was understaffed for a large rush we would be able to call in more associates.
The company benefits are that we will be better able to forecast our labor (the full-time associates’ hours would have already been calculated – leaving only the part-time associates’ hours to fluctuate), gives the ability for associates to participate in projects like Twelpforce 24 hours a day, and allows for Supervisors and High potential associates to work on more projects from home in their spare time (this is something that currently happens, but usually with employees off the clock, by making these associates salaried I would assume the company would have less liability around that work.)
The employee benefits are that during most of the year you are getting paid whether you work or not. If everything works the way it should, even these associates could be sent home early if traffic permits – putting them on an on-call status until their normal shift would be over. This could give more associates a better work/life balance.
Notes and cautions:
During the test portion Supervisors and Full-Time associates would have a chance to opt into the program. Also, we can’t abuse the labor, during the holidays, when the highest number of customers are coming in is where the company benefits the most from this plan, during the rest of the year if we take it easy on the associates everyone will be happy. This is partially inspired by the way managers work now, where they give up 90% of their life for 4 months to have a pretty easy scheduling during the rest of the year.
I would also add that currently only a small percentage of the store staff is full-time; this plan still gives the ability to use labor to control SG&A.
As always, if you have any feedback I am willing to listen, post them here, tweet me, or if you know me outside of this blog contact me in any way you see fit.
Have a great day!
The Model
Supervisors and Full-Time associates would be moved from hourly to salaried. During most of the year (January 31st– October 1st) these associates would work 32 hours a week. During the holiday rush these associates would work around 50-55 hours a week. Each week associates would be scheduled as normal (based in traffic and other metrics), with a certain number of associates scheduled as on-call. The on-call associates would be expected to report to the store within 1 hour of a call. During the larger part of the year associates would typically be scheduled for 4 – 8 hour shifts and one day of on-call; with the on-call portion being scheduled as well. Associates would typically also have 2 weeks with on-call shifts, and then 2 weeks without, rotating through the months. During the holidays associates would either be scheduled for 5 – 8 hour shifts, with the possibility of being asked to stay up to 4 hours later each shift, or be scheduled for 4 – 10 hour shifts, with 1 on call day. These would alternate every two weeks in a similar manner to the on-call rotation mentioned earlier.
Why?
The customer benefit is that our stores would be constantly staffed, and in the event that the store was understaffed for a large rush we would be able to call in more associates.
The company benefits are that we will be better able to forecast our labor (the full-time associates’ hours would have already been calculated – leaving only the part-time associates’ hours to fluctuate), gives the ability for associates to participate in projects like Twelpforce 24 hours a day, and allows for Supervisors and High potential associates to work on more projects from home in their spare time (this is something that currently happens, but usually with employees off the clock, by making these associates salaried I would assume the company would have less liability around that work.)
The employee benefits are that during most of the year you are getting paid whether you work or not. If everything works the way it should, even these associates could be sent home early if traffic permits – putting them on an on-call status until their normal shift would be over. This could give more associates a better work/life balance.
Notes and cautions:
During the test portion Supervisors and Full-Time associates would have a chance to opt into the program. Also, we can’t abuse the labor, during the holidays, when the highest number of customers are coming in is where the company benefits the most from this plan, during the rest of the year if we take it easy on the associates everyone will be happy. This is partially inspired by the way managers work now, where they give up 90% of their life for 4 months to have a pretty easy scheduling during the rest of the year.
I would also add that currently only a small percentage of the store staff is full-time; this plan still gives the ability to use labor to control SG&A.
As always, if you have any feedback I am willing to listen, post them here, tweet me, or if you know me outside of this blog contact me in any way you see fit.
Have a great day!
Wednesday, March 31, 2010
RUMOR! Best Buy buys Radio Shack
RUMOR RUMOR RUMOR
Because this is still in rumor status I have moved this to an internal page.
If you are a Best Buy employee You can view it on Watercooler through this path: Home » My Company » Best Buy - Innovation, Generating Value and Saving Money » Innovation and Growth Ideas » Best Buy acquires Radio Shack (rumor)
I would like to say again that this is just a rumor and that I am a line-level employee with no knowledge of what Best Buy corporate is doing in this matter.
This update was just an exercise for my brain and a way to express my thoughts to a company that I love. Because it could be taken the wrong way I have moved these thoughts to a place that can still fulfill my goals without any of the negatives that are possible.
Have fun,
-Mike
Because this is still in rumor status I have moved this to an internal page.
If you are a Best Buy employee You can view it on Watercooler through this path: Home » My Company » Best Buy - Innovation, Generating Value and Saving Money » Innovation and Growth Ideas » Best Buy acquires Radio Shack (rumor)
I would like to say again that this is just a rumor and that I am a line-level employee with no knowledge of what Best Buy corporate is doing in this matter.
This update was just an exercise for my brain and a way to express my thoughts to a company that I love. Because it could be taken the wrong way I have moved these thoughts to a place that can still fulfill my goals without any of the negatives that are possible.
Have fun,
-Mike
Friday, March 5, 2010
Talent Development + Validation
Lets try something new:
As always let me know what you think, please keep in mind that this one is off the cuff and I only prepared a very limited set of notes, (4 sentence fragments to remind myself of the inspiration) it was very different for me to do it this way and I am sure that i didn't go into as much detail or depth that I do when I write it out. I am very interested to know what others think about this video (not attempting to do this in a vacuum.) Regardless, I am going to try this out a few more times (I have to get more comfortable in front of a camera), hope you enjoyed.
As always let me know what you think, please keep in mind that this one is off the cuff and I only prepared a very limited set of notes, (4 sentence fragments to remind myself of the inspiration) it was very different for me to do it this way and I am sure that i didn't go into as much detail or depth that I do when I write it out. I am very interested to know what others think about this video (not attempting to do this in a vacuum.) Regardless, I am going to try this out a few more times (I have to get more comfortable in front of a camera), hope you enjoyed.
Tuesday, February 23, 2010
Reduce Velocity – Increase Margin (slow down and do it right)
What if we are going after our objectives the wrong way? What if during this past holiday season we pursued the wrong path by embracing the high velocity strategy? The answer to becoming a more customer centered company that is also more profitable cannot be found by increasing velocity. Conventional retail and Best Buy are not congruent. Wal-mart is the king of conventional retail; let’s let them keep that smoldering battlefield and move on to something that actually serves the customer.
Shrinking Product Margin – (the land of diminishing returns)
I will start off with a bit of math, the point of this exercise should become clear, but I will explain below.
If the average selling price (ASP) of an item is $1000 this year with 30% product margin ($300). The next year its ASP has dropped to $800, but the cost remains the same, the margin drops to 12.5% ($100). The next year its ASP drops to $600, but the cost has dropped a bit as well, and the margin only falls to 6% ($36).
If we sell $100,000 worth of this item the first year, $110,000 the second year, and $121,000 the third year, we have shown a 10% comp year over year which is a great gain in revenue. The problem with this gain in revenue is that the first year we make $30,000 in margin, the second year we make $13,875, and the third year we make $7260.
In this example we would have to sell nearly $250,000 the second year to actually grow, and the third year this number moves over $500,000.
The point is that there are products in our stores that are following a trend similar to this, and if we don’t find a way to stem the tide of margin erosion we will not be able to keep our doors open. Keep reading I will try to find a way out of this.
Competition (Wal-Mart, Target, Lowes, Sears, HHGreg, ABT, Amazon, the list goes on and on and on)
When you ask anyone who are competitors are it typically turns to other retailers, whether they are brick and mortar or online. The list is too long to accurately recreate here, but it suffices to say there are a ton of other businesses fighting for the same customers.
Do we want to compete? Ask yourself if a Wal-mart experience is the type that we even want to compete with. Wander around a vacuous space, hoping to find whatever it is that you came in for (try to remember after trekking for miles throughout the store), asking someone for help (if you can find someone) only to ask yourself if the answer they gave was really correct or just something they made up (depending on the training they have received around the products/services they offer and what that person’s idea of helping is.)
The easy answer is that hopefully we don’t compete with these retailers; we offer customers a better experience that doesn’t even come close to paralleling the scenario outlined above. The unfortunate truth however is that we do offer this experience for a great deal of our customers, especially during the holidays, especially when we increase the velocity.
The logic being that if an associate sells 20 of any given item in an hour vs. selling 2 of that same item in an hour, which is going to be the better customer experience? Which interactions are more likely to leave a customer in a position to take advantage of all of our competitive differentiators? It isn’t very likely going to happen in any one of those 3 minute back to back to back rapid fire interactions that leave the employee racing to the next customer and each customer getting either a canned presentation or just a few basic needs taken care of instead of the complete solution.
The other downside to this activity is that many of our associates are starting their path with our company during the holidays. Those who we train this way as a starting point with the company then retain many of these habits when we move onto the rest of the year. This means that we have to try to train out bad habit that we have instilled as we needed to speed up to handle the increased velocity.
Let other retailers handle the velocity, and let’s become something better
To simply state the case for change: If we continue down this path where we are competing against other retailers by selling product and relying on Home Theater and PC revenue streams to provide an outlet for growth we will not be able to continue being in business.
Here is my view on how we not only survive as a company, but drive growth and expansion through the foreseeable future just by refocusing our efforts and utilizing what we already have working for us.
Products & Services
There are products in our stores that still carry large product margins typically found in Appliances, Car Fi, and Best Buy Mobile. The issue we have now is that we use most of our marketing towards drawing traffic in Computers, Home Theater, and Media (cd/dvds). The question I ask here, would you rather have a customer spend $500 on a transaction and generate $50 in or $500 to generate $100 or better yet $0-250 spent by the customer generating $100s in profit? Yes this is just hypothetical, and an easy choice when it is put this way, but the point remains that put simply we are picking the first option, and $50 may be setting the bar to high.
If we put a focus on departments that sell profitable product instead of ones that sell profitable attachments we could increase margin growth regardless of the revenue lost. I realize that we are a public company and that revenue seems to be one of the biggest indicators of success, but I beg the question, isn’t profit a better measure of success than the total dollar amount that you bring in?
If attaching Geek Squad services is a profitable venture, wouldn’t it be more profitable to sell services on products purchased elsewhere? In this vein, we don’t have to warehouse it, sell it, etc. We just take care of it after the fact. If we advertised services instead of the product, sending the message that no matter where you buy your products Geek Squad will be here for you to Mount it, Optimize it, or protect it. If the product is in our system, why can’t we offer Geek Squad Black Tie Protection, even if it was purchased somewhere else (perhaps a functionality check is necessary first, but there should be a system for this).
NPV/DSUB
NPV and DSUBs, Best Buy Mobile comes to mind again, but so does Home Theater, Gaming, Digital Imaging, Computers, MP3s, Car Fi, and even Appliances in terms of the departments that can offer a D-Sub to a customer and sell products that we don’t have to warehouse or even deliver. There are so many products in the store that we can give to a customer and ring out in our store, that take up very little space in the logistics system. These include service from Smilebox, Napster, iTunes, CinemaNow, DirecTv, Comcast, AT&T, MediaCoMM, HughesNet… The list goes on and on.
These are all items that are essentially free (by comparison to other products) for us, and may have a great impact on our bottom line. The issue is that we have a very low offer rate around these services. If we focused on these parts of our business, if we change our culture in a way that we are actively attaching these services to our customers solutions, we can increase productivity, margin, and make the customers’ experience better all at the same time.
Vendor Show
Perhaps one replacement for our media department that could give us a huge potential to WOW customers along with driving the business, would be to host a vendor show in the front of the store. This would change out once a month (to keep it fresh), different vendors would have interactive displays that would show customers the latest and greatest of everything they have to offer through their technology. During different times in the week we could have our employees or vendor reps actually staff these stations and give presentations and demonstrations of the newest technology (like going to a CES). We could use these to show people how all of the products we offer in the store can work together, and use it as a starting point to talk about having Geek Squad come to their house to either give a consultation or to come out and make it work for them.
Shrinking Product Margin – (the land of diminishing returns)
I will start off with a bit of math, the point of this exercise should become clear, but I will explain below.
If the average selling price (ASP) of an item is $1000 this year with 30% product margin ($300). The next year its ASP has dropped to $800, but the cost remains the same, the margin drops to 12.5% ($100). The next year its ASP drops to $600, but the cost has dropped a bit as well, and the margin only falls to 6% ($36).
If we sell $100,000 worth of this item the first year, $110,000 the second year, and $121,000 the third year, we have shown a 10% comp year over year which is a great gain in revenue. The problem with this gain in revenue is that the first year we make $30,000 in margin, the second year we make $13,875, and the third year we make $7260.
In this example we would have to sell nearly $250,000 the second year to actually grow, and the third year this number moves over $500,000.
The point is that there are products in our stores that are following a trend similar to this, and if we don’t find a way to stem the tide of margin erosion we will not be able to keep our doors open. Keep reading I will try to find a way out of this.
Competition (Wal-Mart, Target, Lowes, Sears, HHGreg, ABT, Amazon, the list goes on and on and on)
When you ask anyone who are competitors are it typically turns to other retailers, whether they are brick and mortar or online. The list is too long to accurately recreate here, but it suffices to say there are a ton of other businesses fighting for the same customers.
Do we want to compete? Ask yourself if a Wal-mart experience is the type that we even want to compete with. Wander around a vacuous space, hoping to find whatever it is that you came in for (try to remember after trekking for miles throughout the store), asking someone for help (if you can find someone) only to ask yourself if the answer they gave was really correct or just something they made up (depending on the training they have received around the products/services they offer and what that person’s idea of helping is.)
The easy answer is that hopefully we don’t compete with these retailers; we offer customers a better experience that doesn’t even come close to paralleling the scenario outlined above. The unfortunate truth however is that we do offer this experience for a great deal of our customers, especially during the holidays, especially when we increase the velocity.
The logic being that if an associate sells 20 of any given item in an hour vs. selling 2 of that same item in an hour, which is going to be the better customer experience? Which interactions are more likely to leave a customer in a position to take advantage of all of our competitive differentiators? It isn’t very likely going to happen in any one of those 3 minute back to back to back rapid fire interactions that leave the employee racing to the next customer and each customer getting either a canned presentation or just a few basic needs taken care of instead of the complete solution.
The other downside to this activity is that many of our associates are starting their path with our company during the holidays. Those who we train this way as a starting point with the company then retain many of these habits when we move onto the rest of the year. This means that we have to try to train out bad habit that we have instilled as we needed to speed up to handle the increased velocity.
Let other retailers handle the velocity, and let’s become something better
To simply state the case for change: If we continue down this path where we are competing against other retailers by selling product and relying on Home Theater and PC revenue streams to provide an outlet for growth we will not be able to continue being in business.
Here is my view on how we not only survive as a company, but drive growth and expansion through the foreseeable future just by refocusing our efforts and utilizing what we already have working for us.
Products & Services
There are products in our stores that still carry large product margins typically found in Appliances, Car Fi, and Best Buy Mobile. The issue we have now is that we use most of our marketing towards drawing traffic in Computers, Home Theater, and Media (cd/dvds). The question I ask here, would you rather have a customer spend $500 on a transaction and generate $50 in or $500 to generate $100 or better yet $0-250 spent by the customer generating $100s in profit? Yes this is just hypothetical, and an easy choice when it is put this way, but the point remains that put simply we are picking the first option, and $50 may be setting the bar to high.
If we put a focus on departments that sell profitable product instead of ones that sell profitable attachments we could increase margin growth regardless of the revenue lost. I realize that we are a public company and that revenue seems to be one of the biggest indicators of success, but I beg the question, isn’t profit a better measure of success than the total dollar amount that you bring in?
If attaching Geek Squad services is a profitable venture, wouldn’t it be more profitable to sell services on products purchased elsewhere? In this vein, we don’t have to warehouse it, sell it, etc. We just take care of it after the fact. If we advertised services instead of the product, sending the message that no matter where you buy your products Geek Squad will be here for you to Mount it, Optimize it, or protect it. If the product is in our system, why can’t we offer Geek Squad Black Tie Protection, even if it was purchased somewhere else (perhaps a functionality check is necessary first, but there should be a system for this).
NPV/DSUB
NPV and DSUBs, Best Buy Mobile comes to mind again, but so does Home Theater, Gaming, Digital Imaging, Computers, MP3s, Car Fi, and even Appliances in terms of the departments that can offer a D-Sub to a customer and sell products that we don’t have to warehouse or even deliver. There are so many products in the store that we can give to a customer and ring out in our store, that take up very little space in the logistics system. These include service from Smilebox, Napster, iTunes, CinemaNow, DirecTv, Comcast, AT&T, MediaCoMM, HughesNet… The list goes on and on.
These are all items that are essentially free (by comparison to other products) for us, and may have a great impact on our bottom line. The issue is that we have a very low offer rate around these services. If we focused on these parts of our business, if we change our culture in a way that we are actively attaching these services to our customers solutions, we can increase productivity, margin, and make the customers’ experience better all at the same time.
Vendor Show
Perhaps one replacement for our media department that could give us a huge potential to WOW customers along with driving the business, would be to host a vendor show in the front of the store. This would change out once a month (to keep it fresh), different vendors would have interactive displays that would show customers the latest and greatest of everything they have to offer through their technology. During different times in the week we could have our employees or vendor reps actually staff these stations and give presentations and demonstrations of the newest technology (like going to a CES). We could use these to show people how all of the products we offer in the store can work together, and use it as a starting point to talk about having Geek Squad come to their house to either give a consultation or to come out and make it work for them.
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