When
it comes to innovation, Best Buy continues to surprise me with with
just how far ahead they are of every other big-box retailer. For
example, they are currently the leading retailers of electric
bikes and scooters, and have recently added
Brammo motorcycles to the mix.
However, Best Buy's long-term strategy includes much, much, more than adding a few
two-wheeled EVs
to their huge selection of computer, electronics and appliance
products. As I learned from Chad Bell, Best Buy's director of emerging
business, the company believes that, by educating its customers about
electric vehicles, it can become a preferred destination for them to
purchase EVs of all kinds, up to and including highway-capable cars that
one might normally expect to purchase at an auto dealership.
Through Geek Squad, the company provides
repair and maintenance of the EVs it sells, and is beginning to provide
services related to EV charging stations.
At the recent
Plug-In 2010 International Conference and Exposition,
Mr. Bell represented Best Buy in a panel session called: "Innovative
Business Models in the Electric Vehicle Industry", which also featured
representatives from electric motorcycle startup
Mission Motors, and EV infrastructure startup
Better Place.
Mr. Bell explained that, as Best Buy has grown, so has its ability to
impact the communities it serves. Its large number of retail stores,
with their high access to consumers, gives the company its significant
reach.
At the same time, he related, "Transportation is experiencing a
paradigm shift on a global scale, as the industry move towards a more
sustainable power model, and a behavioral change to customized
solutions." Electric Vehicles are a
good fit
for Best Buy, for a number of reasons, one of those being that they
have a lot in common with many of their other products, “Electric cars
are basically computers on wheels."
Mr. Bell noted that Best Buy was already well-positioned to become an
early EV leader. In a December, 2009 poll, 240 people where asked,
"Where would you think to buy an electric vehicle or scooter?." The
leader, by far, was Best Buy (7%), outpacing Amazon.com (3%), and,
surprisingly, beating out motorcycle dealerships (3%), bicycle shops
(3%), and even Wal-Mart (1%).
However, since EVs are a completely new market, one that customers
are unfamiliar with, this emerging business model will only drive
long-term value for Best Buy if the company can successfully communicate
the benefits of sustainable transportation to its customers. The best
way to do this, is through education. "Our mission is to take a
leadership position in alternative transportation by educating the
customers about better ways to get around."
Like any smart car salesman, Best Buy knows that there is no better
tool for educating customers than letting them try out an electric bike
or
motorcycle
for themselves, so having customers test drive the vehicles is critical
for success, along with quality after-market service, which will be
provided by the Geek Squad.
(One interesting concept, related by Mr. Bell, was the notion that
EVs, and specifically electric bikes, could have plenty of unexpected
benefits for customers. For example, he related a story about a customer
who could not ride a standard bicycle, due to back problems. She was
quite ecstatic to find out how easy an electric bike was to ride, and
that, if she had one, she would be able to ride along with her children,
something that she had not previously been able to do.)
Mr.
Bell laid out the company's strategy for moving into different segments
of the EV market, with each successive entry representing a larger
market opportunity, and requiring a larger education effort for Best
Buy. This education process starts with currently available product
offerings, starting with non-licensed electric bikes, such as the
A2B, and then moving into motorcycles, such as the
Brammo Enertia.
The next step is to begin testing out early-generation electric cars, such as the
Mitsubishi i-MEV, and, in 2009, four i-MEVs were painted in
Geek Squad livery, and are currently part of the fleet. Rick Rommel, senior vp of emerging business,
told BNET's Jim Motavalli, “We like what we see...They're pretty good and our agents like them."
Subsequent steps include bundling car-sharing programs, such as
Zipcar, with its EV products, offering access to the company's on-site
charging infrastructure (used to charge Geek Squad vehicles) , introducing Neighborhood Electric Vehicles (
NEVs), such as the
Miles ZX40S or the
GEM, and potentially introducing, mass-production, full-speed,
electric automobiles.
Although they appear to be off to a good start, the success of Best
Buy's strategy is certainly not a given. As Russ Finley of Grist.org
points out,
"customer support is critical for retail sales, however, they are about
to embark on a steep learning curve. Many bikes will be returned
because they don't meet the near infinite variety of customer
expectations. A 300 pound guy who thinks he is getting a scooter will
not be pleased to find his range is only five miles..."
Of course, this is all the more reason why customer education is so important.
By 
