Why New Best Buy E-Commerce Chief Is Focused On In-Store

Best Buy's new E-Commerce chief is planning to make changes to the troubled 1,400-store chain that, in their own way, will be as big a shakeup as JCPenney's so-far-so-disastrous makeover. Scott Durchslag, the former Expedia exec who on Monday (Oct. 8) was brought in as president of online and global E-Commerce, appears to want to flip the usual merged-channel model: Instead of making online a mirror of the in-store experience, he wants to replicate the online experience inside Best Buy stores.

That's way outside the traditional scope of an E-Commerce president. Then again, Durchslag's lack of retail experience and tech background might explain much of his optimism—and his scope creep.

Durchslag's appointment comes against the backdrop of the ongoing battle for financial control of Best Buy—founder Richard Schulze is still trying to take over the company and CFO Jim Muehlbauer announced his resignation on Wednesday (Oct. 10). That boardroom chaos may be the environment that gives Durchslag the latitude to push his vision into the stores themselves.

But he's still up against Best Buy's reputation as a victim of showrooming, unknowledgeable associates, high prices and the customer perception that it's the electronics retailer of last resort—after Amazon, Walmart, Target and Costco have turned up empty.

Durchslag understands some of the huge perception issues his team must overcome. "Showrooming is a symptom, not a cause," he said. "It's arrogant to think that you're going to cause or prevent that kind of behavior. It is a reality that is happening today. The only question is: Are you going to harness that and make things easier, or are you going to try and put your head in the sand and deny reality?"

If he were coming from a retail background, we might suspect Durchslag was thinking of Target's efforts to fight showrooming by making it harder for shoppers to make meaningful online comparisons.

His next thought, though, was that Best Buy could avoid that through deep investment, not just in technology but in associate training. "Best Buy is a Fortune 50 company with an incredibly strong foundation and a strong balance sheet that can invest tens of millions of dollars in training those blue shirts to be able to provide information and support using these new technologies and tools that we're talking about. That's a very hard thing for other folks to be able to instantly match."

It might be just as hard for Best Buy, which is under extreme financial pressures right now, to do any type of serious investments. Meanwhile, customers see Best Buy associates as focused on upselling and pushing products the chain wants to move.

At the same time, Durchslag sees part of his job as getting the pricing right—which almost inevitably means getting prices down. "You need price competitiveness on the key items that drive consumer perception. That's an area where there is some work that needs to be done," he said.

And then there's BestBuy.com itself.And then there's BestBuy.com itself, which would be the traditional focus for a new E-Commerce exec. After listing some of his near-term goals (price competitiveness, promotions and offers, the site performing well and customers being able to find what they want), Durchslag offered a candid Best Buy assessment: "To be honest, compared with last year, being able to do those things well is an enormous improvement."

That was apparently a reference to a huge mishap at Bestbuy.com on Black Friday 2011, when the site took and confirmed Black Friday orders in November and then waited until a few days before Christmas to cancel those orders. But it could have also been referencing a 17-hour site outage from Best Buy early this year, one that highlighted the chain's merged-channel advances and, ironically, its interdependencies.

Durchslag touched on a different Best Buy perception challenge when he spoke of new and aggressive ways to use the chain's Geek Squad. Given how many high profile incidents we've heard about—arrests of Best Buy customers who were turned over to police when Geek Squad associates found illegal files, cases where associates found social-media passwords and defaced customers' accounts—we'd think privacy sensitivity should be uppermost. How would shoppers feel if their dry cleaners scanned all clothes for marijuana residue and turned in any customers with the illegal scent?

But Durchslag offered this example of where the Geek Squad could go, starting with an enhanced, in-store mobile-fueled experience: "I can immediately offer you a deal to extend the warranty for two years. You just bought this great Xbox. Do you want to be able to get Geek Squad coming by on a quarterly basis, (so the Geek Squad would) update all of your software? Do you want a subscription for those periodic visits? When Geek Squad comes to your house, if you've opted in to the personalized offers, they would be able to do an inventory of what other stuff you have in your house that would then be the basis for our ability to make other recommendations of highly relevant things to you. That's kind of the experience I am talking about."

It's true that the Geek Squad operation lets Best Buy get closer to customers than almost any other chain: not just virtually into their phones and computers, but physically into their homes. There's a two-decade track record, and that softens a little bit of the creepiness of inviting in retail-chain associates. But trusting these techs to launch an invasive inventory of everything Best Buy might want a piece of in the future? Remember, Best Buy sells refrigerators, washers, car stereos and DVDs for kids. That creepiness gap can close pretty quickly.

The E-Commerce chief also spoke of how gradual such changes would have to happen, and he spoke in more programming than marketing terms: "It's the difference between a waterfall approach to technology development versus an agile approach. You want to be able to get to a model that lets you be able to make lots of small changes quickly—test, iterate and learn. And be able to continuously improve. I think we'll be able to make a series of small changes quite quickly and then those start to build on each other. It isn't like you just turn on the site one day in six months and, all of a sudden, everything looks and feels radically different. You wouldn't want to do that anyhow, because you would lose a lot of consumers in the process. You want this to be a journey of continuous improvement."

That doesn't sound like a retailer at all; it sounds like a pure IT guy, which may end up being Durchslag's biggest advantage (he doesn't know what's impossible, so he'll do it anyway) or his Achilles heel. Retail brands aren't software systems. They don't behave rationally. And retail customers behave even less rationally than conventional application users. Changing how those customers view Best Buy is a problem on top of fixing Best Buy's actual pricing, associate training and customer experience problems—a lesson the pure retailers who are revamping JCPenney are still working through.

Fixing those technology issues first might be a really good idea. They may be the easiest problems on Durchslag's list.