What's most astute about the new partnerships is that they provide growth leverage for the company at a time when asset-intensive retailing investments are hard to swallow. In a brilliant move, the two-step distribution system will help Best Buy expand its reach beyond areas where the big-box retailer has physical stores.
In what some industry observers considered an about-face for the company, Best Buy For Business chief David Hemler started reaching out to solution providers seeking potential channel partnerships less than one month after Best Buy acquired small-business VoIP provider Speakeasy for $97 million. Until then, the Best Buy unit hadn't formally taken that approach, although many of the partners were already sourcing products from the retail side of the business.
In reality, the foundation for Best Buy's foray into the potentially lucrative small/medium wholesale markets has always been rooted in strategic approaches distinct from its core retail business. Almost a year ago, when BBFB was still in its formative stages and Jeff Dudash, (PR manager at Best Buy) was looking for a new agency to work with, he indicated that the B2B division will target small businesses with its 'technology solutions ... and we're looking for an agency to help us communicate Best Buy For Business' ability to deliver simple and affordable technology solutions to small businesses.'
In any event, the company is avoiding the mistakes we cautioned against in an earlier post, mistakes made most notoriously by Robert Nardelli at Home Depot. BBFB is making it clear they understand the fundamental marketplace distinctions between retailing (consumers) and wholesaling (businesses). BBFB is smartly focused on finding creative new ways to adequately provide the complex services required by business customers. After careful review of its options, Best Buy determined that the most efficient and effective means to that end was through these new independent partners.
We applaud Best Buy for this initiative. It's an excellent distribution strategy move on two fronts:
- The voice of the customer - business buyers - was put front and center in determining what services were key
The Best Buy for Business Department offers an extensive menu of services including a team of professionals who can recommend business computer systems tailored to a customer's specific needs, expedited checkout, a wide selection of business technology, Reward Zone program and a 24-hour computer support task force.
- A careful 'make-buy' analysis was done to assess objectively whether the company or outside distribution partners were best positioned to meet certain business customer needs
It's this type of disciplined and strategic thinking that is likely to raise Best Buy's likely success in the notoriously fickle small business marketplace. Kudos!