Best Buy’s New E-Commerce Head Aims to Unify Bricks and Clicks
Scott Durchslag is about to get his hands dirty.
As the new head of Best Buy’s online business, Durchslag couldn’t be joining the largest U.S. electronics retailer at a messier time.
Over the past year, Best Buy has faced enormous pressure from online competitors, which can often accept lower margins because they lack the expense of operating physical locations. To deal with those challenges, the company is undergoing a massive period of disruption that has included the resignation of its CEO and an unsolicited bid from its founder.
In an interview with AllThingsD, Durchslag acknowledged the challenges ahead: “You know me — if it isn’t hard, it isn’t worth doing,” he said. “There’s a lot of work to be done, but I think it’s also doable.”
Durchslag, who officially started Monday, is the president of Best Buy Online and a company senior vice president in charge of Best Buy’s online and mobile commerce businesses. He joins from Expedia, where he was president for 14 months. During his time there, he was responsible for managing the company’s strategy, including product development, marketing and operations for its 27 sites around the world. While he was president, Expedia made some fairly drastic changes to its platform: It spun off TripAdvisor to become a separate publicly traded company, and it formed a partnership with Groupon to create a travel-focused daily deals business.
Before that, Durchslag worked at Skype — before eBay purchased it — and Motorola.
He said one main reason he decided to take on this task was because he believes it is a cause worth fighting for: Best Buy employs roughly 170,000 workers, which represents a significant number of U.S. jobs. He said those people are playing a valuable role in “helping customers figure out how to use all the products and technologies available to them.”
And he believes things can be fixed. “I think that with so much going on at Best Buy, there’s never been a bigger felt need for change,” he said. “All parts of the company are recognizing that things need to change. … My inclination is to strike while the iron is hot. And it’s hot.”
Indeed, there better be a fire burning under management’s seats. In August, Best Buy reported one of its worst quarters ever. Revenue, gross profit margins and same-store sales all eroded, with earnings falling to $12 million from $128 million a year earlier. And now it’s confronted with the need to make changes just as it heads into the busiest retail season of the year.
One of the opportunities that Durchslag is excited to explore is the company’s overall strategy for creating a multi-channel experience, which is one of the industry’s big buzzwords right now. It means creating a closer connection between its online and bricks and mortar experiences, so that customers can be recognized seamlessly across both. Durchslag believes that Best Buy, as the largest electronics retailer and the world’s 11th largest online retailer, has a special opportunity to leverage those assets. “I see that this bricks and clicks model is going to be the key to consumer delight — you have to be able to do both well,” he said.
While many big box retailers have considered e-commerce sites the enemy, clearly Best Buy has decided it is better to embrace it than to fight it. Durchslag said it has one thing going for it that the travel industry did not. About half of travel purchases have already shifted online, whereas the electronics category is seeing less than half that rate. “Consumers want to touch and feel the products and make sure they meet the expectations,” he said. “They want to be comfortable that it’s going to work in the home.”
He’s also not entirely sold that Best Buy has a “showrooming” problem, where customers walk in to touch and feel the products but then order them somewhere else, like Amazon. “I think that consumers do that, but it’s too soon for me to have a fact-based answer. But the question is, how many consumers are actually doing that? To some extent I see that as an opportunity. If they are in our store, they are our customer to lose.”