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Best Buy launches tailor-made m-commerce site


By Gemma Taylor - Electricals retailer Best Buy UK has today unveiled a site tailor-made for use on smartphones as it aims to improve its multichannel presence.

The retailer, which launched its first ‘Big Box’ store in the UK in April last year, has had a disappointing first year as the electricals sector continues to struggle during the ongoing economic downturn.

It is hoped that developing an online and m-commerce strategy will boost sales for the company, which reported EBIT losses of £62.2 million in the 12 months to March 2011.

Weak consumer demand has adversely affected the sector as a whole and has seen plans for the UK bricks and mortar expansion of Best Buy Europe essentially shelved.

The development of digital platforms has been a priority for all retail sectors in recent times and a report earlier this month found that retail website interaction on smartphones in the UK was up 163 per cent compared to the same period last year.

Best Buy UK hopes to capitalise on this growing popularity and move in line with its prediction to see over ten per cent of its online orders coming from mobile devices within the next two years.

As the first consumer electricals retailer to launch a fully transactional m-commerce site, the company is building on its existing online presence, as its website already offers extensive blogs, a community forum, reviews, editorial-based product descriptions and video content.

While the expansion of the company in property terms has not come to fruition at this stage, Best Buy UK Managing Director Steve Jensen told Retail Gazette earlier in the year that the growth of its property portfolio was not a priority for the company.

“In an environment where the customer wants multichannel why would you want to take on so many bricks and mortar stores?” he argued, adding that the company’s commitment to digital strategies was paramount.

“I am also really passionate about m-commerce solutions; it’s about meeting customers where they are.”

This initiative has now been launched following the unexpected delay of the company’s physical development.

Best Buy’s Thurrock outlet opened a year behind the original schedule and, while the retailer had aimed to open as many as 200 standalone shops throughout the UK, there are only 11 in operation to date.

The US-based retailer, which teamed up with mobile phone specialists Carphone Warehouse in a 50-50 partnership to increase its European presence, sold its Belgian retail operation in April this year for €22 million (£19.45 million) to telecommunications specialist Belgacom, subject to clearance from the Belgian Competition Authority.

This move of course diminished the retailer’s European presence and it is feared that a lack of customer knowledge about Best Buy outside the US may have a negative impact on the new digital arm of the business.

Neil Saunders, Consulting Director of industry analysts Verdict Research, told Retail Gazette that multichannel offerings are the inevitable way forward for any growing retailer.

“There is no doubt that m-commerce is the fastest growing area of retail at the moment, and will certainly continue to be a big thing over the next few years,” he commented.

“This presents a big opportunity for retailers, a direct opportunity to make money via mobile as a channel and as a tool to engage customers.

“It is a direct selling tool and informational tool; you can give information to draw people into the store.”

However, Saunders stressed that it is vital for retailers to develop their brand separately from their e-tail presence, in order to improve brand awareness.

“The big challenge for Best Buy UK is interaction with the brand, as the average UK consumer does not know what Best Buy is or what it stands for. Confidence in the brand is difficult to establish,” he added.

“If you are doing anything remote, consumers must readily understand what they are buying, and so it is best to already be established.

“This is a danger that many new entrants fall into, internalisation; communicating to make people understand the brand is a fundamental thing to do to make multichannel work. Brand awareness is an underpinning factor for success.”

Best Buy UK’s new m-commerce site will offer customer reviews, navigational options, access to website promotions and offers and delivery options.

Published on Tuesday 30 August by Editorial Assistant

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