Technology

Best Buy is a Clicks-and-Mortar Believer

How the consumer electronics chain's Web site augments the marketing campaign in its stores.
Joseph RadiganMay 8, 2001

(Editor’s Note: This is the first of three articles about content management in E-commerce and Web design. Today’s story will focus on how one major retailer’s redesign of its site fits its marketing strategy and how the site’s design is used to complement the promotional campaign in its stores. Tomorrow’s story will look at a global firm’s use of the Web to distribute documents to its employees and clients. A column next week will focus on one of the emerging technologies in Web design.)

At a point when there’s still a world of doubt surrounding the eventual outcome of the E-commerce revolution, Best Buy may have figured out what it’s going to take to make clicks-and-mortar retailing really–if you’ll forgive us–click.

The current version of the company’s Web site had its coming-out party last summer. Management for the Eden Prairie, Minn.-based retailer of consumer electronics knew it wanted to upgrade the Web site from just selling DVDs and videos and use it to drive more volume through its stores.

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Barry Judge, vice president of marketing for BestBuy.com, says even a low-scale marketing effort was hardly inexpensive, although he declined to spell out the costs of the company’s Web operations. But given the cost required just to publish a low-scale site, the retailer soon realized there was no such thing as a half-way Web investment, and it expanded the site to include everything in its stores.

“We just think there’s a bigger opportunity if you’re going to expend a lot of resources,” he says. Now the Web site pushes Best Buy’s entire product line, from home computers to CDs and to consumer electronics.

While the site isn’t profitable on its own yet, Judge is convinced it’s headed that way. By one metric, he feels it’s already making an impact. Best Buy’s stores get some 200 million to 300 million shoppers a year. The Web site has already attracted 100 million visitors in less than 12 months since the redesign.

Granted, Web visitors are not equivalent to shoppers, but Judge says the electronics’ retailer’s management isn’t demanding that each surfer type in his or her credit card account before they click away from the site.

Two years ago, the company determined that its customers were not wedded to any one selling channel, but that by intelligently coordinating the marketing campaigns for each of them, it could drive more revenue from both the stores and its Web site.

“Best Buy is very much a self-serve retail environment,” Judge says, noting that its stores employ a sales force that is not paid on commission.

“We have a lot of early-adopter technology users, and our stores attract more tech savvy consumers to begin with,” he says. “About 80 percent to 90 percent of our core target is already on the Web.”

Since customers were already in the habit of coming into the store and browsing, it made sense to use the Web site to let them do the same.

Judge says the retailer determined that for any expensive product such as a computer, the buying process can easily involve two or three trips to the store before the purchase is actually made. Customers will compare notes and perhaps mull the purchase of a computer or big-screen TV with other family members.

Using the Web to distribute pricing and product information that’s identical to what’s found in the company’s flagship chain of 400 stores may add a step or two to that process, but that’s all right with Judge. He says that in surveying its customers, the company is finding that its shoppers are using the Web site to do more homework.

“From our surveys, we have a sense that the Web is a really important sales tool,” he says. “We manage our business to optimize customer acquisition and profitability, and we do things that if we were a pure play Internet site, we wouldn’t.”

Another step in the process is the 50 million circulars Best Buy mails out each weekend, which highlight the promotional campaigns for the week ahead. Sunday morning, the Web site is refreshed to match the current promotions.

That final piece of the equation is supervised by Greg Perry, BestBuy.com’s manager of E-publishing systems, who supervises a staff of 25 designers and Web publishers.

Since last Thanksgiving, Best Buy has been using Interwoven’s TeamSite and three related products–Templating, Open Deploy, and Data Deploy– as its content management platform.

Perry joined the firm in January 2000, and he says the original Web address was built very simply, drawing upon files stored in a Microsoft Access database and then pushing them to the Web with an internally developed tool. Perry ultimately scrapped the homegrown system because it wasn’t strong enough to support a large-scale Web effort.

Harley Manning, a research director at Forrester Research in Cambridge, Mass., says Best Buy’s situation is hardly unique. In the last several years, two trends have developed side by side.

On the one hand, clicks-and-mortar retailers have discovered that they need content management systems that are far more versatile than they could get by with just a few years ago. At the same time, the developers of content management systems have upgraded them from simple, serial workflow tools into systems that can simultaneously manage several file upgrades from several departments while at the same time handle short-term modifications to reflect a retailer’s marketing campaign.

But there’s more to the content management systems’ role than permitting companies to refresh their Web pages on a regular basis. Manning notes that manufacturing companies and retailers that, until recently, were not on the Web in any big way, have had to become quasi- publishers as their Web sites have become more central to their operations.

“They’re accidental publishers,” Manning says. “These are firms that are not professional publishers. Yet suddenly they find themselves with all the same problems: Somebody creates content, somebody else edits it, and then they have to put it up.”

Manning says, “If you’re a manufacturer, you might not have that discipline, except for a few pockets of the company.”

Thanks to the improvements in content management tools over the last few years, these “accidental publishers” can now better manage their Web sites without incident, Manning says.

In Best Buy’s case, the Interwoven product allows the company to pull data from a variety of sources. For example, product specs are drawn from a Microsoft SQL Server database, while pricing data comes from the same mainframe that’s supporting the retail stores.

Other files, such as “how-to” explanations for installing electronic equipment are stored in simple text format and are converted by TeamSite into HTML code. Then, they’re fed to a staging server.

Ultimately, everything is pushed out to the company’s Web host, Exodus Communications, Perry explains.

Getting to this point wasn’t easy. Perry recalls that prior to the implementation of TeamSite, his staff was literally manually entering all the code each week for each new version of the home page. Today, most of the process is automated, and at any given time, his staff is working on editions of the Web page five weeks in advance.

For example, the edition for the week of May 13 is nearing its final deadline, while an early version has been just begun for the June 10 edition.

If anything, Judge sees a Web site that’s even more closely aligned with the stores. For example, by the time the Christmas shopping rolls around, Best Buy will have installed 10 interactive kiosks in each of its stores that will run off the same databases supporting its Web site.

“What we believe in is one brand in multiple channels,” Judge says. “If you believe in that philosophy, it requires integration and consistency across all the channels. But the retailers who can provide that are the ones who will win.”