Critics expected Best Buy to follow Toys ‘R’ Us’ to the giant strip mall in the sky, but the company has beat analysts’ earnings estimates for an astonishing 22 quarters in a row by leveraging a secret weapon…
The Geek Squad.
But it wasn’t always sunshine and circuit boards
Best Buy nearly went out of business in 2012 after profits tanked 90% in just a quarter as the CEO resigned amidst a sex scandal. Thanks to a last-minute $1.4B cost-cutting plan, the company avoided disaster.
But, analysts almost universally believed the company would lose out in the long run to Amazon, which delivers the same products as Best Buy, at prices that are often 15x lower.
Yet, somehow the company continued growing — beating earnings predictions for 22 consecutive quarters and quadrupling stock price despite Amazon’s continued march towards monopoly. How’d they do it?
Best Buy has managed to remain competitive by doubling down on human-powered tech services for consumers. Best Buy acquired a 50-person startup called Geek Squad in 2002 — and has since expanded it to a 20,000-person IT army.
To further differentiate itself from Amazon, Best Buy recently created an elite corps of ‘in-home advisors’ called “Total Tech Support” that advises on everything from smart-home installation to TV installation — for a fee.
Best Buy stock is up 9% so far this year, and the company plans to continue expanding its ‘in-home’ consultation services.