Integrators Unfazed By Best Buy OfferMarch 16, 2009 By Nancy Klosek
The retailer recently announced a new initiative to provide free delivery, product recycling, simple hookup and removal of the packaging with the purchase of TVs starting at $1,000. While the move raised some eyebrows among custom installers and independent retailers, it doesn’t cause much worry. Their foot in a customer’s door, they said, makes a much bigger imprint than Best Buy’s for a lot more significant reasons than sheer size or market clout.
“All something like that does is encourage a TV buy at Best Buy by the customer who would otherwise have bought at a Walmart,” said Peter Shipp, principal of Architectural Electronics in Winter Park, Fla. “They’re taking out business from another big-box store.”
The type of customer Shipp’s business thrives on – the referral customer – won’t be impressed or overly satisfied with such basic services. And he doesn’t think Best Buy has proven itself, mainly through its Magnolia stores, as formidable competition to the independent integrator and specialty retailer. “They’ve not leveraged that business,” he said.
Brad Ritti, owner of Mr. Hook It Up in Orlando, whose business is heavily reliant on referrals, said Best Buy’s move isn’t a real threat. He understands the thinking behind the move: most consumers are basing their buying decisions on price more than ever, which has greatly decreased average selling prices. Big-box chains like Best Buy “lack the relationships and personal care philosophy” to build the kind of successful long-term partnership he enjoys with his best and most loyal customers, Ritti said.
Ritti has re-packaged some of his solutions to appeal to a broader customer base. But once inside the home, he can present lighting control, home automation and other solutions to increase the sale. Ritti reinforces his local presence with direct mail, community newspaper advertising and, most important, charitable donations and community activities.
Charles O’Meara, president of Absolute Sound in Central Florida, works both the specialty retail and custom integration sides of the fence. He wondered if the offer would get Best Buy through the customer’s door at the customer’s expense. “Do they come on Thursday at 2, the way we would if we were called to, or on the following Wednesday, sometime between 12 and 5?” he asked. “This is a bare-boned, minimum type of service. If the consumer is going to shop with a specialty business, they’re expecting a better experience and probably something better in the form of installation. It’s really as little as you can get away with, and not as much as you possibly can do. We’ve all done this for certain customers as a matter of course.”