Best Buy Case Study Anesu Chaora Cara Chandler
Best Buy Case Study Anesu Chaora, Cara Chandler, Kit Kemper, & Bhavana Srinivas B 585 Biomedical Analytics: Best Buy Case Study
Company Background B 585 Biomedical Analytics: Best Buy Case Study
Facts ➔ The company was founded by Richard Schulze in 1966 and called “Sound of Music ” before the name changed to Best Buy in 1983. ➔ Best Buy generates nearly $40 billion annually. ➔ In North America, Best Buy has about 1, 600 stores and locations. B 585 Biomedical Analytics: Best Buy Case Study
Facts Joly stated “Continuous shift in consumer behavior is because consumers are increasingly researching and buying online. As a result, traffic to our brick and mortar stores continued to decline. ” Driven by Technology Innovation B 585 Biomedical Analytics: Best Buy Case Study
Facts Best Buy’s gross Profit for its U. S. stores declined from 25% to 22% between 2011 and 2014 B 585 Biomedical Analytics: Best Buy Case Study
Renew Blue strategy is designed to address Declining Comps and Declining Margin issues by (1) Growing online business (Variety in Electronic tools, Easy check-out, Price Competitive); (2) Enhancing in-store customer experience (Holiday prices, in-store pick up); and (3) Leveraging multi-channel capabilities (e-commerce platform, Web App, Reward System). All to deliver to customers great advice, service and convenience at competitive prices in the channel they want to be served. B 585 Biomedical Analytics: Best Buy Case Study
Renew Blue Gross Profit has Improved to 24. 6% in 2015 as compared to previous year B 585 Biomedical Analytics: Best Buy Case Study
Progression in Analytics - Timeline B 585 Biomedical Analytics: Best Buy Case Study
Progression in Analytics - Overview - Pre 1997: Literature suggests no major analytics initiatives at company B 585 Biomedical Analytics: Best Buy Case Study
Progression in Analytics - Timeline - 1997: Company embarks on 2 year ‘scientific retailing’ initiative - Initiative leads to major financial turnaround - 2004: CEO (Brad Anderson) begins to emphasize ‘customer centricity’ - Managers feel need for a review of the role of analytics in organization after then B 585 Biomedical Analytics: Best Buy Case Study
Progression in Analytics - Timeline - 2006: CEO and top executives prioritize enterprise-wide approach to analytics - Team of business and technology professionals is assembled - Team starts by identifying and defining metrics - Team works with representatives from each functional area - Access to tools that provide new data and customer insights is given to business operators across organization. - Centralized group (RASC) is created to support store managers with specialized or advanced analytics. B 585 Biomedical Analytics: Best Buy Case Study
Progression in Analytics - Timeline - Central analytics groups are also formed within functional areas (marketing, supply chain and human resources) - Leadership showcase stores that successfully use analytics for positive reinforcement. - 2008: Pricing and assortment decisions for the Christmas holiday season incorporates customer analytics for the first time. - Improves profits from Black Friday weekend, a remarkable achievement in one of the most dismal Christmas shopping seasons in retail history. - 2009: In analytics system migration, problems occur - 10 days worth of web traffic and sales behavior data lost. B 585 Biomedical Analytics: Best Buy Case Study
Progression in Analytics - Timeline - 2009: Company enlists the help of consulting firm - Web Analytics Demystified - 2010: Lays the groundwork for future growth and communicating about how the new data strategy would help in the long term - 2013: Works with Samsung to implement Samsung Experience Shop within Best Buy stores. - 2013: Works with Microsoft to redo their PC section B 585 Biomedical Analytics: Best Buy Case Study
DELTA Framework Evaluation B 585 Biomedical Analytics: Best Buy Case Study
DELTA Analysis of Reward. Zone loyalty program data showed: 1. Best customers = 7% of total customers Analytical Competitors 2. These customers were responsible for 43% of sales Customer Centricity Initiative Analytical Companies Analytical Aspirations Localized Analytics Analytically Impaired B 585 Biomedical Analytics: Best Buy Case Study
DELTA Streamlined the 293 analytical systems and data feeds to improve quality and cut costs. Worked with representatives from each functional area to define metrics in a way that best reflected Best Buy’s commitment to customer centricity, using the three key fact-based questions: Analytical Competitors Analytical Companies Analytical Aspirations ● What happened? ● Why did it happen? ● What should happen? Localized Analytics Analytically Impaired B 585 Biomedical Analytics: Best Buy Case Study
DELTA B 585 Biomedical Analytics: Best Buy Case Study
DELTA Reporting and Analytics Support Capability (RASC) • A centralized group responsible consistency of Best Buy’s analytical capability • Provide information about performance from the store level to the corporate level • Help for store managers to analyze and influence customer behavior
DE LTA Corporate motivation = driving data and decision making to individual stores Customer segmentation and data warehousing are a priority. Assembled a team of business and technology professionals to launch a new initiative to redefine how the company deploys, uses, and integrates analytics for better decision making and business outcomes. B 585 Biomedical Analytics: Best Buy Case Study
DEL TA Identify metrics and define them • Deploy a scorecard and reporting tool that gives stores and functional groups access to actionable insights about customers Establish a new training program to teach: 1. How to identify and serve different types of customers 2. How to interpret and act on data B 585 Biomedical Analytics: Best Buy Case Study
DELT A Byrne Doyle, District Manager, Best Buy Michigan: ANALYTICAL AMATEUR Transformed one of the worst-performing districts in the company into a top performer Diverse background having had many different roles at Best Buy Balances short-term with long-term customer and employee metrics Mentors subordinates B 585 Biomedical Analytics: Best Buy Case Study
DELT A David Schamehorn, Director of Customer Behavior Analytics: ANALYTICAL SEMIPROFESSIONAL Interest in application of mathematics to business Joined Best Buy as a model builder and analytical professional (if needed) Led customer analytics team of forty people Considers strategy optimization a hobby B 585 Biomedical Analytics: Best Buy Case Study
Future Work (Analytics Competitor? ) B 585 Biomedical Analytics: Best Buy Case Study
What Does It Take to Become a Competitor? DATA ENTERPRISE Executives understand potential of analytics Manage analytics at the enterprise level Exploit unique data Model review and management Establish data governance Extend analytics tools and infrastructure broadly and deeply. Create a BICC B 585 Biomedical Analytics: Best Buy Case Study
What Does It Take to Become a Competitor? LEADERSHIP TARGETS Encourage Leaders to be visible with regard to analytics Communicate internally and externally about how analytics contribute to success Focus on strategic initiatives, value creation, and distinctive capability that will enhance competitive differentiation Infiltrate the strategic planning process so analytics can shape business strategy B 585 Biomedical Analytics: Best Buy Case Study
Is Best Buy an Analytics Competitor? Strengths Opportunities Embraced analytics to improve online performance. Leverage suppliers and in-store analytics to optimize the retail environment. Creation of RASC to centralize analytics at the enterprise level. Track online-to-offline sales to determine how the two are correlated. Weaknesses Threats Exploitation of unique data. Dying brick-and-mortar sales Leader visibility Analytical competitors in the same market. B 585 Biomedical Analytics: Best Buy Case Study Letting analytics shape the business
The Competition B 585 Biomedical Analytics: Best Buy Case Study
The Problem Best Buy competes in a market that is already advanced in analytics. Amazon is one of the most analytically advanced companies in the world. Microsoft and Apple are technology companies that have made extensive investments in analytics platforms. Costco, Microsoft and Apple use in-store analytics (membership, check-in, echeckout, i. Beacons) very well. Walmart recently acquired Jet an online retailer founded by former Amazon employees that is analytics driven. Analytics: Best Buy Case Study B 585 Biomedical
How to Become Competitive A)Leverage relationship with diverse suppliers to improve the retail experience, by sharing data from concepts like the Microsoft PC section and Samsung store-in-a-store. B)Implement in-store analytics by using trackers (RFID, Cameras, i. Beacons, and Wi. Fi) to determine where customers spend their time and how traffic flows within the store. C)Use online-to-off tracking to tie online marketing efforts to in-store sales. D)Encourage executive evangelism for analytics. B 585 Biomedical Analytics: Best Buy Case Study
Quiz B 585 Biomedical Analytics: Best Buy Case Study
- Slides: 30