How Best Buy lets stores share credit for online sales
Figuring out how to let stores share in the credit for online sales is boosting multi-channel cooperation and sales at Best Buy Co. Inc., senior vice president of online stores and marketing Sam Taylor said at the eTail 2006 Conference this week.
Best Buy’s more than 700 stores share in the credit for online sales transacted through in-store kiosks, but more recently the retailer extended that credit to all online sales, Taylor said. When Best Buy executives informed store general managers about the expanded credit policy, “we got a standing ovation,” Taylor said. “That’s been the single most important thing to get channels working together.”
Taylor will speak at the Internet Retailer 2006 Conference in Chicago in June on the topic “Delivering Web Content That`s Focused on Customer Needs.”
Best Buy is No. 10 in the Internet Retailer Top 400 Guide to Retail Web Sites.
Each Best Buy store gets a scorecard that shows the extent of online sales credited to it from BestBuy.com, letting store managers see how well they’re performing in multi-channel sales. Taylor declined to say in his conference presentation how Best Buy determines each store’s allocation for online sales, but he said in a brief interview afterwards with Internet Retailer that store allocations are based on a formula that includes the ZIP codes of customers to associate them with their nearest Best Buy store. Key to the success of working out that formula was including store managers in the planning stage, Taylor said.
The credit-sharing policy has brought multiple benefits, Taylor told the conference. Store managers have become more aware of the value of BestBuy.com and have initiated effective in-store merchandising programs using web analytics data gathered from Best Buy.com and segmented by types of shoppers.
When a Denver Best Buy store manager learned that shoppers within a customer segment who like Star Wars video games also tend to like games related to professional wrestling, the manager drove up store sales with a new end-cap display that cross-merchandised Star Wars and wrestling products. “The store got a 70% sell-through and boosted revenue from the promoted products by 198%,” Taylor said. “We’re now making that a best practice for other stores.”
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