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Best Buy Wants to Become Top EV Seller; Educating Customers is Key

Steve Puma | Monday August 9th, 2010 | 9 Comments

Best Buy is now selling the Brammo EnertiaWhen it comes to innovation, Best Buy continues to surprise me with with just how far ahead they are of every other big-box retailer. For example, they are currently the leading retailers of electric bikes and scooters, and have recently added Brammo motorcycles to the mix.

However, Best Buy’s long-term strategy includes much, much, more than adding a few two-wheeled EVs to their huge selection of computer, electronics and appliance products. As I learned from Chad Bell,  Best Buy’s director of emerging business,  the company believes that, by educating its customers about electric vehicles, it can become a preferred destination for them to purchase EVs of all kinds, up to and including highway-capable cars that one might normally expect to purchase at an auto dealership.

Through Geek Squad, the company provides repair and maintenance of the EVs it sells, and  is beginning to provide services related to EV charging stations.

Best Buy sponsored electric motorcycleAt the recent Plug-In 2010 International Conference and Exposition, Mr. Bell represented Best Buy in a panel session called: “Innovative Business Models in the Electric Vehicle Industry”, which also featured representatives from electric motorcycle startup Mission Motors, and EV infrastructure startup Better Place.

Mr. Bell explained that, as Best Buy has grown, so has its ability to impact the communities it serves. Its large number of retail stores, with their high access to consumers, gives the company its significant reach.

At the same time, he related, “Transportation is experiencing a paradigm shift on a global scale, as the industry move towards a more sustainable power model, and a behavioral change to customized solutions.” Electric Vehicles are a good fit for Best Buy, for a number of reasons, one of those being that they have a lot in common with many of their other products, “Electric cars are basically computers on wheels.”

Best Buy now selling electric vehicles.

Mr. Bell noted that Best Buy was already well-positioned to become an early EV leader. In a December, 2009 poll, 240 people where asked, “Where would you think to buy an electric vehicle or scooter?.” The leader, by far, was Best Buy (7%), outpacing Amazon.com (3%), and, surprisingly, beating out motorcycle dealerships (3%), bicycle shops (3%), and even Wal-Mart (1%).

However, since EVs are a completely new market, one that customers are unfamiliar with, this emerging business model will only drive long-term value for Best Buy if the company can successfully communicate the benefits of sustainable transportation to its customers. The best way to do this, is through education. “Our mission is to take a leadership position in alternative transportation by educating the customers about better ways to get around.”

Like any smart car salesman, Best Buy knows that there is no better tool for educating customers than letting them try out an electric bike or motorcycle for themselves, so having customers test drive the vehicles is critical for success, along with quality after-market service, which will be provided by the Geek Squad.

(One interesting concept, related by Mr. Bell, was the notion that EVs, and specifically electric bikes, could have plenty of unexpected benefits for customers. For example, he related a story about a customer who could not ride a standard bicycle, due to back problems. She was quite ecstatic to find out how easy an electric bike was to ride, and that, if she had one, she would be able to ride along with her children, something that she had not previously been able to do.)

Currie Bikes at Best BuyMr. Bell laid out the company’s strategy for moving into different segments of the EV market, with each successive entry representing a larger market opportunity, and requiring a larger education effort for Best Buy. This education process starts with currently available product offerings, starting with non-licensed electric bikes, such as the A2B, and then moving into motorcycles, such as the Brammo Enertia.

The next step is to begin testing out early-generation electric cars, such as the Mitsubishi i-MEV, and, in 2009, four i-MEVs were painted in Geek Squad livery, and are currently part of the fleet. Rick Rommel, senior vp of emerging business, told BNET’s Jim Motavalli, “We like what we see…They’re pretty good and our agents like them.”

Subsequent steps include bundling car-sharing programs, such as Zipcar, with its EV products, offering access to the company’s on-site charging infrastructure (used to charge Geek Squad vehicles) , introducing Neighborhood Electric Vehicles (NEVs), such as the Miles ZX40S or the GEM, and potentially introducing, mass-production, full-speed, electric automobiles.

Although they appear to be off to a good start, the success of Best Buy’s strategy is certainly not a given. As Russ Finley of Grist.org points out, “customer support is critical for retail sales, however, they are about to embark on a steep learning curve. Many bikes will be returned because they don’t meet the near infinite variety of customer expectations. A 300 pound guy who thinks he is getting a scooter will not be pleased to find his range is only five miles…”

Of course, this is all the more reason why customer education is so important.

—-

Steve Puma is Director of Business Development for SABA Motors, and a sustainability writer/consultant. His work focuses on clean transportation, including Plug-In Electric Vehicles, something he is very passionate about.

Steve holds an MBA in Sustainable Management from Presidio Graduate School and a BA in Computer Science from Rutgers University. You can learn more about Steve by reading his blog, or following his tweets.


▼▼▼      9 Comments     ▼▼▼

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  • Pingback: Best Buy committed to EV dev.- leading with, but not only Brammo « The Electric Chronicles

  • Rockodilered

    ZENN no longer manufactures its “neighborhood electric vehicle.” You should research before writing an article.

    • http://www.thepumablog.com Steve Puma

      Thanks for pointing out my error. It does happen from time to time, and when someone points one out, I always update the article as soon as I can.

      However, it doesn't change what I was trying to say, which was to say that Best Buy is considering NEVs “like the ZENN”, not necessarily the ZENN, in particular. Technically, the statement was correct, whether or not ZENN is still selling cars.

      It is very likely that Best Buy is considering selling any number of vehicles that are not even in production yet, and there have been rumors that the Aptera is one of those. Plenty of those it considers will not end up being sold at the stores.

      In the future, I would appreciate it if you would refrain from snarky comments, which serve no purpose. If you really wanted to contribute something to the discussion, you could have simply pointed out that ZENN vehicles are no longer being sold.

  • http://www.facebook.com/jen.boynton Jen Boynton

    Lord have mercy, if Best Buy is planning to rely on its much maligned Geek Squad to do EV repairs, they, and EV owners, are in for a world of hurt. The Geek Squad is regularly featured on the Consumerist for insane upsells and “optimizations” like turning on new computers and downloading software for $79.99, stealing porn from customer computers, and general incompetence: http://consumerist.com/cgi-bin/mt/mt-search.cgi

    Otherwise this is a pretty interesting new direction for Best Buy, I'll be watching with interest!

    • http://www.thepumablog.com Steve Puma

      Funny thing about that. It sounds like the kind of shenanigans that still go on in car dealerships all across the country, although, to a lesser extent than years ago.

      I wonder how widespread this is. As with any company of this size, you are going to have incompetence raise its ugly head every once in a while.

      In the original opening sentence to this article, I had lamented my usual mixed feeling when big-box retailers, such as Wal-Mart or Best Buy get into the sustainability game. There are always huge pros and cons that go along with their decisions.

      But, one thing I can say, regardless of the Geek Squad's perceived competence, is the level of enthusiasm for both sustainability and electric vehicles exhibited at all levels, from senior management down to floor salesmen. I believe that this comes from a more “bottom-heavy” corporate structure: the definitely listen to their employees on the ground a lot.

      I guess we'll see how this goes, but I give them a better chance than big auto at successfully communicating the value of unfamiliar products to their customers.

  • Mikey

    Good article but Best Buy is struggling to service electric bicycles. Not the electric part so much as the bicycle components. Geek Squad techs are a far cry from bicycle mechanics.

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  • http://www.annamclark.com Anna

    Great article. I'm sure Best Buy will bring the Geek Squad up to speed on how to service the cars if they decide to carry them. I like the concept even though the details need hammering out. I'm all for any store like this to educate the public around sustainability.

    • http://www.thepumablog.com Steve Puma

      Thanks for your comments, Anna. I would tend to agree with you. Best Buy is using earlier, and perhaps easier, product offerings, to understand what they will need to expand into more complex offerings (bikes, before motorcycles, before cars, etc.). This seems to be a well thought out strategy.

      I can imagine any number of scenarios for implementing maintenance, should it require much more specialized expertise than electronics repair generally does.

      For example, they can create a sub-set of Geek Squad, who only specialize in a a particular type of product, perhaps even doing repairs only. I'm sure it wouldn't be too hard to find “geeks” who also happen to be great at repairing bikes, motorcycles and/or cars, either in their own ranks, or by hiring from bike shops, motorcycle shops, or car dealerships.

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  • Richard

    Those Chinese made electric bikes wont last. There is going to be problems and lots of returns. Best Buy is going to lose their shirt over this.

    The $2600 A2B bike has the battery and components welded inside the frame. How will the geek squad be able to fix it?

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    We have been hearing that the Dems outnumber Reps by about 3:1 in Massachusetts. This poll shows about 2:1.

  • Pingback: Best Buy Desires to Become Top EV Seller - ElectricBikee