Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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For all its success, observers say there are areas where Best Buy needs improvement. Paula Rosenblum, managing director of research and advisory firm Retail Systems Research LLC, says Best Buy could do a better job of cross-channel merchandising and marketing.
“Best Buy has gotten way too complicated in its pricing structure, which can make it hard to shop both online and in stores,” she says. “There are ‘Store Only’ specials advertised on BestBuy.com, for example, that are hard to find in the store.”
With multiple points of access for customers, multichannel retailing can be messy but will continue to evolve at Best Buy, a spokeswoman says.
An upgraded e-commerce platform should help. Best Buy has been operating for several years on a highly customized version of Art Technology Group Inc.’s ATG Commerce Suite, and is upgrading to the latest version this year. Among the major advantages, says ATG product manager Kelly O’Neil, Best Buy merchandisers will be able to quickly create new merchandise displays and pricing without having to go through the retailer’s I.T. department.
The latest platform also supports stronger integration with contact centers, so that agents can help shoppers while looking at the same e-commerce page a customer is on, O’Neil adds.
Shari Ballard, the executive vice president who oversees all of Best Buy’s U.S. retail operations, has challenged each channel to display merchandise in ways that fit how consumers shop. “We need to make sure we don’t get locked into a box in how we present products,” Thompson says.
That could include targeted areas of the web site, for example. “In vacation season, we may let customers shop for cameras, batteries and other products in a vacation section,” Thompson adds.
Best Buy also is trying out other new ideas. With 35% of online shoppers using Best Buy’s in-store pickup service, the retailer is testing curb-side pickup so customers don’t have to leave their cars. It’s also experimenting with mobile commerce at m.BestBuy.com, and it will be developing ties between sales of digital music players and its 2008 acquisition of online music retailer Napster Inc.
As the company heads into the second half of 2009, with president and chief operating officer Brian Dunn-who started with Best Buy as a store associate in 1985-slated to succeed Brad Anderson as CEO in June, observers can expect the retailer to continue its longstanding policy of generating new ideas from within. Dunn is particularly focused on what he calls the connected world of retailing.
One of the innovations Thompson is particularly enthusiastic about is in that arena of new ways to connect with consumers. It’s called Best Buy Remix, and it allows outside web developers to reach into Best Buy’s product catalog for data they can present on their own web sites. In technical terms, Best Buy is exposing its application programming interfaces to these external developers in hopes they will develop new ways to let consumers interact with BestBuy.com’s product information and images.
One example is a project with web development firm Ribbit that connects the BestBuy.com product catalog to a third-party web site, ConsumersPrice.com, where shoppers can request alerts when particular Best Buy products become available at a certain price.
“This is getting to new and fundamental ways we’ll do business within the next few years,” Thompson says. It’s part of Best Buy adapting to what Thompson refers to as the semantic web, a more flexible Internet where shoppers will access the product information they want without having to jump among multiple pages.
If that information shows up on web pages that are not part of BestBuy.com, that’s not a problem for the retailer. To continue bringing cheer through e-commerce, Best Buy executives know they will have to follow their customers. “We have to be relevant to customers wherever they choose to touch our brand,” Thompson says.