Best Buy's New Stealth Channel

Best Buy, along with just about every other major chain, has been focusing lately on pushing its brand in every channel it can think of, from mobile to E-Commerce to social networks. But Best Buy on Tuesday (Oct. 12) made public its moves in a channel where its brand is all but invisible. The new Stealth Channel is letting all kinds of other firms use the chain's APIs to allow Best Buy purchases with no Best Buy brand visible.

At first glance, the Best Buy Commerce API program doesn't look that different from its earlier API efforts or from API moves by other chains. And even Best Buy's official line about the program—"we'll connect with customers wherever they are"—has a deeply innocuous element. But there's much more to it.

The program itself is straightforward. Today, when a Best Buy partner wants to sell a Best Buy product electronically, the sale has to be sent to the Best Buy Web site, with its logos and marketing design aplenty.

That can make the sale feel disjointed and, even though it doesn't actually add any additional steps, make it seem longer and more indirect and inefficient than allowing the initial site to complete the sale. The ultimate fear: that such a move may make consumers more likely to abandon their shopping carts and move on. Sale lost.

The intent behind the new program is to still have the purchase go through the Best Buy site, which will handle all of the complicated product spec (color, size, model, etc.), shipping and payment options, but Best Buy will go stealth—thereby letting the consumer believe the original company is still handling the transaction.

"We're focusing on the completeness of the experience" and trying to avoid the (true) perception that customers are being "redirected to," said Kumar Kandaswamy, Best Buy's director of API platform business. "This is expanding our reach."

The chain touts its numbers as it tries to bring in partners, including access to more than "one million current and historical consumer technology products." (Historical consumer tech products? A PC with Warp on it? A 14,400-baud modem? General Washington's quill pen?)Best Buy also touts its routine Web functions, such as the "ability to check pricing, product availability by store, specifications, descriptions, images, and ratings & reviews" and "product fulfillment through home delivery or in-store pick up." Granted, the in-store pick up sort of kills the stealth function.

The theory is that this approach should allow Best Buy to split operations in two, with one part of the company (the 99 percent part) focused on the same brand-centric efforts to get people into the stores, visiting the Web site, accessing mobile information and discussing it on various social sites.

Then this new part can focus on generating revenue in a more modest, more invisible way—checking its logo and ego at the virtual door and allowing partners to control and maintain the experience, both from a functionality and a visual perspective. Given that the partners do all of the work, some deliciously high-margin results could be had. After all, Best Buy's purpose is to sell as many products as it can as profitably as it can. Will it work and produce lots of stealth wealth? Will this latest API effort prove healthy and stealthy?

The answer lies in a powerful brand that, candidly, can cut both ways. Customer-service obsessed brands such as Nordstrom, Rolex and Mercedes-Benz have decided that people will buy because of those brands and pay a premium for it. But every time a Geek Squad manager is caught selling pictures borrowed from a repaired laptop or the company gets creative interpreting price-match policies, it's going to be nice for Best Buy to have a stealth channel where the Best Buy brand is hardly mentioned.

That's not a knock against Best Buy. Any chain that is going to fight on price is going to upset groups of customers, whether it's Wal-Mart, Target or Best Buy. Although a strong brand will have far more good associations than bad, it will always have both. Why not leverage the good feelings customers already have for various niche partners and let the brand name sometimes be silent?