RICHFIELD, Minn.Best Buy Co. is testing a new turnaround strategy: making its cavernous electronics emporiums look more like Apple Inc.'s sleek retail outlets. <o
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The heart of a test store near Best Buy's headquarters here is a Solution Central help desk, rimmed with chairs and manned by the company's black-tied Geek Squad. It strongly resembles the Genius Bar at Apple's stores. <o></o>
Best Buy's prototype has taken another cue from Apple, letting customers pay for products in several locations, rather than forcing them into checkout lines at the front of the store. <o></o>
Best Buy said its slimmed-down store, which opened a few weeks ago, is focused less on displaying every conceivable gadget and more on connecting customers with employees who can answer questions or help program equipment.<o></o>
Skeptics already are asking whether the new format goes far enough to attract customers and fight "showrooming," in which shoppers who browse in stores buy merchandise more cheaply elsewhere, usually online.
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Best Buy, the nation's largest electronics retailer by revenue, has been particularly vulnerable to the trend; it says half the shoppers in its stores use cellphones or tablets to check competitors' prices, up from 10% in 2010. Sales at its stores open at least a year fell 1.7% last year after a 1.8% decline n 2010. The company's stock has dropped 33% over the past two years. <o></o>
Getty ImagesAnalysts have doubts about whether the company can succeed with a store model that depends on highly trainedand potentially better-paidlabor. Improving service is a big challenge given "the turnover inherent with a workforce dominated by young part-time workers," said Christopher Horvers, an analyst at J.P. Morgan Chase & Co.<o></o>
According to Best Buy, the new format is just a first step in dealing with long-standing problems. "This is catch-up, if you will, but there's much more to come," said interim Chief Executive Mike Mikan.<o></o>
Mr. Mikan, a former health-care executive who has served on Best Buy's board since 2008, stepped in temporarily as CEO after Brian Dunn resigned in March amid an investigation that ultimately concluded he had an inappropriate relationship with a subordinate. <o></o>
The same investigation criticized founder Richard Schulze for failing to tell the board about Mr. Dunn's relationship. Last month Mr. Schulze, the company's largest shareholder, abruptly left the board and is exploring the possibility of taking the company, which has a market value of $7.4 billion, private in a leveraged buyout.
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Best Buy is closing 50 of its 1,100 U.S. big-box stores and converting 60 of the rest to the new format, which is about 20% smaller than the 58,000 square feet common at traditional Best Buy stores. Less space is devoted to giant TV sets, whose sales have waned, and more to tablets, e-readers and mobile phones, for which Best Buy's market share has grown. <o></o>
"The expanded section for tablets and phones should be beneficial," said Peter Keith, retail analyst at Piper Jaffray, who recently visited a new store. But he questioned whether the new format would be more profitable.<o></o>
Some of the new stores, which also have opened in San Antonio, include products and categories unavailable at Apple, such as an expanded appliance section featuring upscale brands like Viking, and elaborate home-theater showrooms with certified installers. Shelves are lower, signs bigger, and the color scheme is blue and white.<o></o>
Customers at the new store here for the most part seemed pleased. "It seems much more open and easy to find things," said 32-year-old Tom Shepard, an engineering professor who stopped by for a computer cable.<o></o>
Best Buy executives said they hope the new store will be a place where customers want to congregate and learn how to get more out of their gadgets. Shoppers today visit Best Buy one to two times a year, down from 10 times annually a decade ago. <o></o>
Best Buy must battle not only Apple but also online retailers such as Amazon.com Inc., which without a store network to support can keep prices low. Amazon's prices are 3% lower than Best Buy's on some key items, according to Morgan Stanley.<o></o>
The company hopes improved service will help give it an advantage. Best Buy recently announced that 40% of current workers will undergo intensive training starting in September; new hires will get 80 hours of training. In stores where sales and customer satisfaction scores rise, workers will get bonuses.<o></o>
A more knowledgeable, helpful workforce costs money, however; Apple recently decided to give its retail staff a 25% pay increase to avoid defections.<o></o>
At Best Buy, "We don't see these as costs but investments that will lead to higher sales in less square footage," said Mike Vitelli, president of U.S. operations.<o></o>
></o>The heart of a test store near Best Buy's headquarters here is a Solution Central help desk, rimmed with chairs and manned by the company's black-tied Geek Squad. It strongly resembles the Genius Bar at Apple's stores. <o
></o>Best Buy's prototype has taken another cue from Apple, letting customers pay for products in several locations, rather than forcing them into checkout lines at the front of the store. <o
></o>Best Buy said its slimmed-down store, which opened a few weeks ago, is focused less on displaying every conceivable gadget and more on connecting customers with employees who can answer questions or help program equipment.<o
></o>Skeptics already are asking whether the new format goes far enough to attract customers and fight "showrooming," in which shoppers who browse in stores buy merchandise more cheaply elsewhere, usually online.
<o
></o>Best Buy, the nation's largest electronics retailer by revenue, has been particularly vulnerable to the trend; it says half the shoppers in its stores use cellphones or tablets to check competitors' prices, up from 10% in 2010. Sales at its stores open at least a year fell 1.7% last year after a 1.8% decline n 2010. The company's stock has dropped 33% over the past two years. <o
></o>Getty ImagesAnalysts have doubts about whether the company can succeed with a store model that depends on highly trainedand potentially better-paidlabor. Improving service is a big challenge given "the turnover inherent with a workforce dominated by young part-time workers," said Christopher Horvers, an analyst at J.P. Morgan Chase & Co.<o
></o>According to Best Buy, the new format is just a first step in dealing with long-standing problems. "This is catch-up, if you will, but there's much more to come," said interim Chief Executive Mike Mikan.<o
></o>Mr. Mikan, a former health-care executive who has served on Best Buy's board since 2008, stepped in temporarily as CEO after Brian Dunn resigned in March amid an investigation that ultimately concluded he had an inappropriate relationship with a subordinate. <o
></o>The same investigation criticized founder Richard Schulze for failing to tell the board about Mr. Dunn's relationship. Last month Mr. Schulze, the company's largest shareholder, abruptly left the board and is exploring the possibility of taking the company, which has a market value of $7.4 billion, private in a leveraged buyout.
<o
></o>Best Buy is closing 50 of its 1,100 U.S. big-box stores and converting 60 of the rest to the new format, which is about 20% smaller than the 58,000 square feet common at traditional Best Buy stores. Less space is devoted to giant TV sets, whose sales have waned, and more to tablets, e-readers and mobile phones, for which Best Buy's market share has grown. <o
></o>"The expanded section for tablets and phones should be beneficial," said Peter Keith, retail analyst at Piper Jaffray, who recently visited a new store. But he questioned whether the new format would be more profitable.<o
></o>Some of the new stores, which also have opened in San Antonio, include products and categories unavailable at Apple, such as an expanded appliance section featuring upscale brands like Viking, and elaborate home-theater showrooms with certified installers. Shelves are lower, signs bigger, and the color scheme is blue and white.<o
></o>Customers at the new store here for the most part seemed pleased. "It seems much more open and easy to find things," said 32-year-old Tom Shepard, an engineering professor who stopped by for a computer cable.<o
></o>Best Buy executives said they hope the new store will be a place where customers want to congregate and learn how to get more out of their gadgets. Shoppers today visit Best Buy one to two times a year, down from 10 times annually a decade ago. <o
></o>Best Buy must battle not only Apple but also online retailers such as Amazon.com Inc., which without a store network to support can keep prices low. Amazon's prices are 3% lower than Best Buy's on some key items, according to Morgan Stanley.<o
></o>The company hopes improved service will help give it an advantage. Best Buy recently announced that 40% of current workers will undergo intensive training starting in September; new hires will get 80 hours of training. In stores where sales and customer satisfaction scores rise, workers will get bonuses.<o
></o>A more knowledgeable, helpful workforce costs money, however; Apple recently decided to give its retail staff a 25% pay increase to avoid defections.<o
></o>At Best Buy, "We don't see these as costs but investments that will lead to higher sales in less square footage," said Mike Vitelli, president of U.S. operations.<o
></o>
