How Best Buy Blew the Chance to Out-Apple Apple

What in the world was Best Buy thinking when they discontinued their Studio D and Escape small store concepts several years ago? Designed as neighborhood boutiques, with Studio D for 30-45 year old soccer moms and other more tech-challenged consumers, and Escape for younger tech-savvy consumers, the strategy was to customize these stores for specific niche demographics and lifestyles. And had they continued, they would likely have expanded across a multitude of niches. Each was designed and imaged differently, with customized merchandising and service strategies, and all were highly educational and experiential.

Am I missing something here, folks? I don’t think so.  In fact, while making my public speaking rounds during those years, I declared Best Buy the poster child of brilliant preemptive distribution, localization and customized experiences (as I continue to preach from my co-authored book).

They almost certainly closed the initiative down because, though the stores were making money, they weren’t making enough money to justify the investment and the more complex operations (given the educational experiential and customized merchandise in these stores). Why spend time and investment on a side show when the main attraction in the big box was on fire, with soaring double-digit growth?

However, they blew their biggest opportunity ever, occurring at just the right time to ride that meteor in the big box, while simultaneously investing those winnings in a paradigm-breaking world class vision that would own the 21st Century.

I’m sorry, but in my opinion they were either naïve, short-sighted, lacking vision, or maybe all three.

Apple didn’t miss the opportunity, did they?

Worse, look at Best Buy’s recent melt-down and their quandary of where to go from here, stuck in the middle, with the Internet and other discounters stealing huge chunks of their business.

Even more confounding and ridiculously blind on the part of Best Buy, it appears, is the fact that Apple has only one brand to offer its customers (of course it seems that’s all they need at this point), but Studio D and Escape would have provided consumers a broad selection of many brands and likely several of their own.

Further, Apple has a mono-design and experience (although fantastic).  But, the niche strategy discarded by Best Buy would have different niche-friendly designs and experiences.

Just click on to this link (video of Studio D and Escape store formats) and look at the accompanying photos.

The techy geeks could zip around the hip, industrial feeling and almost night-clubby atmosphere of Escape where they could check out the edgiest gadgets, games and whatever customized line mix that fitted their niche preferences.

The Studio D soccer mom would find a softer, more sensible touch.  Subtler lighting, warm, home-like displays and what they called a “please touch” environment, all enveloped this niche in a feeling of intimacy. These stores had solutions-based merchandising stations, classrooms, a community gallery, web experience, and community outreach programs. Everything about the layout, merchandise, staff and educational programs focused on learning and building interaction among the store associates and themselves.

Best Buy courageously stepped out of the box, so to speak, to retain a world-class and award winning designer of “collaborative public experiences,” ESI Design’s Edwin Schlossberg, to help bring the concept to market.  Too bad the courage wasn’t sustainable.

Need I say more? Yes, one more blockbuster observation.  Had Best Buy continued to pursue this strategy, they might have had national chains of four or five niche boutique brands in neighborhoods (preemptive distribution and great experiences), which they could then bring into their big box stores, creating a mini-mall or boutique bazaar, a must-go-to destination, eliminating the quandary about what they are going to do to get their mojo back.

What a shame!!

Robin Lewis About Robin Lewis

Robin Lewis has over forty years of strategic operating and consulting experience in the retail and related consumer products industries. He has held executive positions at DuPont, VF Corporation, Women’s Wear Daily (WWD), and Goldman Sachs, among others, and has consulted for dozens of retail, consumer products and other companies. In addition to his role as CEO and Editorial Director of The Robin Report, he is a professor at the Graduate School of Professional Studies at The Fashion Institute of Technology.