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3 Reasons Why Best Buy’s Virtual Store Is A Brilliant Idea

Some retailers just understand what omnichannel retailing means better than others, and Best Buy
BBY
is one of those retailers.

In the very same week that it raised its earnings expectations heading into the end of the year, Best Buy also unveiled an ingenious new concept called the “virtual store.”

Put simply, Best Buy’s virtual store is a 40,000 square foot mockup of a real store inside of a warehouse in Bloomington, MN. According to the Star Tribune, the store is meant to act “more like a Hollywood set” from which Best Buy can offer “a new type of interactive, digital shopping experience that its leaders say is the next step in retail’s evolution.”

Or said another way, the virtual store is a way to provide the same great service online that Best Buy’s customers have come to expect from it in-store.

Case in point, the virtual store has “a gym staffed with personal trainers and equipment,” another space “dedicated to Microsoft
MSFT
laptops and devices,” and it also comes replete with “cubicles for staff to have more private conversations with customers as well.”

Roughly 120 Best Buy employees work directly out of the virtual store and another “few dozen” vendor reps are also on hand to help with customer demonstrations. All told Best Buy says that it estimates that its customer satisfaction scores have increased 20% since debuting the virtual store to the public.

And those statistics shouldn’t be a surprise, either.

Because Best Buy’s virtual store concept is brilliant for three key reasons.

#1 – Scale

By centralizing all the customer service activities out of one warehouse, Best Buy can service the entire country via that one operation alone.

In many ways, a virtual store is just a new version of a customer call center but one made all the better via new technologies like live video conversations and online virtual product demonstrations.

#2 – Service Consistency

Second, not only does the Best Buy virtual store take advantage of scale economies, but it also ensures better customer service consistency because it is set up to have the same people interact with customers day in and day out.

This setup contrasts sharply with all the money being thrown at clienteling solutions that attempt to put customers face-to-face with representatives from their local stores. The drawbacks of these solutions are many – for example, employee turnover is always high at a store level, so solutions like these require constant training and retraining and therefore make it difficult to provide a consistent level of customer service for the end consumer.

Best Buy’s virtual store gets around these obstacles by giving Best Buy a stable location, with fully trained and staffed employees, all the time.

#3 – Post-Purchase Revenue Generation and Cost Savings

Post-purchase add-ons and returns can literally make or break an online retail business, but the beauty of a virtual store idea is that it helps to increase the former and also to lower the latter.

Relative to an impersonal traditional e-commerce experience, where a consumer just goes on his or her browser, searches for what he or she wants, and then just clicks a buy button, the Best Buy virtual store is built to create a more personal, visual connection with customers.

This personal connection likely helps customer service representatives get to know their customers better and also likely warms customers up and makes them more amenable to any upsell recommendations that the service representative could provide.

But, most importantly, that same connection and extra time spent with customers also helps to reduce online shopping’s biggest pain point, i.e. customer returns. Online customer returns were, according to NRF, almost 21% of sales in 2021, so any reduction in returns that Best Buy can secure from its virtual store translates to an immediate bottom line profit improvement.

And one has to think that knowing who your Best Buy blue shirt is by name and seeing him or her firsthand on the other end of a live online interaction could go a long way towards achieving that end.

All in all, Best Buy’s virtual store brings scale, efficiency, and bottom line improvement by putting a few unique twists on ideas to which customers are already accustomed.

All of which is a hallmark of good 21st century retailing because there is no sense in recreating the wheel for no reason.