Tradition, Innovation Merge at Client RelationshipsWed, 05/08/2019 - 10:13
Braving the e-commerce era is all about evolving alongside clients and technology, says Fernando Silva, President of Best Buy Mexico. After years of sustainable growth in the US and Canada, the multinational consumer electronics retailer is adapting its business model to the needs of the Mexican market.
“We are opening distinct store formats in Mexico because the country is different than our other markets. We are one of the largest electronics retailers in the world and have a very big operation in Canada and the US,” says Silva. While Best Buy has more than 1,200 stores distributed in Mexico, Canada and the US and made US$42.15 billion in revenue in FY19, Silva says the multinational retailer is increasingly paying attention to the Latin American country. “Mexico is our newest operation and the fastest growing for Best Buy. The country is a pillar for growth in the Best Buy 2020 strategy.”
By the end of FY19, the company had 35 Best Buy and six Best Buy Express stores in Mexico, along with an e-commerce service. Before coming to Mexico, Best Buy’s business model required a representative handle all interactions clients had with the products. The company decided to change this model in Mexico, allowing customers to directly interact with all products, giving them access to unbiased information. Best Buy Mexico also went to great lengths to build trust among its client base and improve customer relations. “Services are a key differentiator and we do not work on commissions. Our sales representatives have a mission to be unbiased informers for our clients. We invest a great deal in the training of our associates so they can help clients make the best decisions for themselves.”
Silva credits these initiatives for making Best Buy the No. 1 and top-of-mind technology retailer in Mexico, even though it is the youngest electronics retailer in the country. The good relationship it has developed with its clients has allowed the company to grow. “Our best advocates are those who buy their electronics from us. Over 90 percent of our clients are returning customers and many of the new ones come through word of mouth. People trust their friends and family a lot more than they trust a brand.”
The country’s growing middle class and increasing access to Wi-Fi have also been key for the company’s growth, according to Silva, because customers are increasingly interested in owning electronics and in buying online and through their phones. Best Buy Mexico has bet on a service that mixes both digital and physical sales to address the needs of the Mexican market. “We do not think of the physical world and the digital world as different. To us, they are integrated. Merging the two has allowed us to be successful.”
While customers north of the border are increasingly shunning traditional retail for e-commerce, this is not the case in Mexico. “Mexicans like to go to malls for entertainment, especially families, so our stores need to be fun. We often see children pulling their parents into the store. We want to expand this experience to every segment of the market. People aspire to have a different shopping experience and we are providing that to the Mexican consumer.” The retailer wants to get even closer to its Mexican customers, which is the point of opening Best Buy Express stores, Silva says. These stores have an average area of 300m2 but offer the complete Best Buy experience: in-store and online purchasing, or in-store pickup after placing an order online. “We offer a multichannel approach and we are the only ones in the market to offer pickup at stores 60 minutes after the sale is completed online.”
Best Buy sees a positive future in Mexico. “Best Buy will continue growing in Mexico and in 2019, we will open approximately eight more stores. We will also continue providing excellent services, enriching people’s lives through technology,” says Silva.