Here’s Why Best Buy is Sending Out the Geek Squad
Best Buy’s (NYSE:BBY) Geek Squad is advancing.
In an attempt to stimulate revenue from electronic repairs, the consumer-electronics retailer has expanded its tech-support service to EBay (NASDAQ:EBAY) and run trials at several Target (NYSE:TGT) stores.
EBay’s Vice President of electronics and motors in North America, Gregory Boutte, said the company offers 24-hour Geek Squad support, which costs $29.99 for a three month plan and $49.99 for six months. Best Buy also plans to add Geek Squad service at 28 Target stores in Denver and one in Minneapolis.
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While Best Buy has struggled this year, analysts predict annual revenue will fall 2.9 percent, its army of 20,000 black-tied, white-shirted agents are the electronics chain’s best-known brand. According to the senior vice president of Best Buy’s service business group George Sherman, the geek squad is the vehicle driving the company’s service push.
Increased customer service is a key element in Chief Executive Officer Hubert Joly’s plan to revive sales and become competitive with rivals like Amazon. Under his proposal, employees will be receiving more training to better assist shoppers connect their gadgets, which will generate higher fees from service contracts and warranties.
As U.S. revenue from services grew 6 percent last quarter, comparable-store sales dropped by 3.2 percent. This was the eighth decline in the past nine quarters for Best Buy.
Because of poor sales, the company plans to shut 50 big-box stores and accelerate the opening of smaller stores that sell mobile phones, e-readers, and tablets. Sales of those devices grew last quarter, while sales of televisions and computers have fallen.
However the strategy has yet to be fully developed and competition has weighed on Best Buy’s stock. Shares have declined in three of the past four years.
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