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Hubert Joly, Chairman and CEO of Best Buy, welcome to Stanford and
The Industrialist's Dilemma.
>> Thank you, Robert.
>> It's great to have you here, and what I'd love to know is why do you think
Best Buy has been so successful over the last three to five seven years when so
much in retail has struggled?
>> We've done a number of things.
The first thing is we fixed the basic operations, so we ensured our prices were
competitive so we we now match online prices, so no question asked.
We vastly improved the online shopping experience,
which is where the shopping experience starts.
We are shipping as fast as Amazon.
We've improved the store experience, investing in the training of
the associates, we've done these vendor partnerships.
Now all of the tech companies are investing in our store so
that they can showcase their products.
We've taken cost off.
So we've really improved the basics.
And then we went into a second phase,
which is we've tried to reinvent the company for the future.
So the first phase was Renew Blue.
Blue is the.
>> Right.
>> Now it's Building the New Blue.
What do we want to look like when we grow?
And we didn't define the strategy base, or we have stores and we sell gadgets.
Now, we said, what is our purpose in life?
We enrich lives through technology by addressing key human needs.
And so this has vastly expanded the opportunities in what we can do.
So, we've launched a number of initiatives like the in-home advisor program
where we go to your home to see what you need, and create a solution for you.
We support everything you have in your home irrespective of where you bought it.
And then we have a number of initiatives around aging seniors,
where we'll help monitor their health so that we can help them live longer in
their home, independently, with the help of technology.
So we're trying to solve customer problems in a unique way.
So really moving forward and combining the human touch and
then the use of technology.
So we're never standing still.
We're moving forward.
>> So given that technology won't change, and it sounds like Best Buy is going to
continue to evolve, if there's three parts to the stool, what I just heard you say,
there's online, there's in-home and in-store.
Since Best Buy started as an in-store experience, what do you think the in-store
experience looks like in retail maybe five, ten years from now?
Five, ten years from now, it's hard to know but it's gotta change.
And the way we've changed it, so many of us buy the easy stuff online, right?
And we do the research.
So if we're going to take the trouble of going to the store,
it's gotta be worthwhile.
So what can the stores uniquely do?
If you're not sure about what you want, being able to touch,
feel ,experience the new technology, and
then being able to talk to a human being is incredibly valuable.
And so that's what we do.
We're like a mini CES with experts in the stores, but the stores do more than this.
They provide a unique service to the vendors.
The vendors, they'll take up this and spend billions of dollars on R&D.
They need a place where to showcase this, otherwise it's hard for
them to convince customers to buy the stuff.
And then the stores are a unique asset from the supply chain standpoint.
Half of our online orders are either picked up in the store, and
you can do this in less than an hour, or shipped from the store.
And so they're really an asset as well from that standpoint.
>> As you've gone through this transformation, what new skillsets have
you had to bring into the company that's different than what you had previously?
>> I would say there's two types,
there's technical skills that we've had to develop.
So clearly, data analytics, insights, digital skills, agile,
customer experience, design thinking,
new skills, we've brought from a technical standpoint.
And then I think the very important, at least as important is leadership skills.
And we call this purposeful leadership.
I think magic happens in a company like Best Buy is if the individuals working
at the company can connect their search for meaning,
the meaning of their life, with the purpose of the company.
If they can build human connections with their colleagues and
with customers, if they can learn skills, if they can grow,
if they can have autonomy, that's where magic happens.
As leaders our role is not to be the smartest person in the room, but
it's to create an environment in which we can develop the sense of purposeful
leadership.
And that's something that I think is so important, and we've been working on that.
>> All right, so you've developed a new customer experience,
you've developed new types of culture.
>> Yes. >> And then you've had this push into
health care, right?
>> Yes. >> You had the aquisitions of
GreatCall and JitterBug.
How does that play out?
Generally people don't think of Best Buy and health care.
Tell us a little a bit about what that does for
the company over the next few years.
>> So it's tied to our purpose, right?
Our purpose is to enrich life through technology by addressing key human needs,
so there's six of them.
There's entertainment, of course, productivity, communication, security,
food preparation and health.
And health is a big part of our life, since 18% of GDP is a big trend in this
country as well as around the world, which is the population is aging.
And if we use technology, so what we do is we put sensors in people's homes and
we monitor their activities of daily living.
So sleep, eating, going to the bathroom and through these sensors and
artificial intelligence, we can detect changes in behaviors.
And then with our care centers, then see what is going on and help, and
trigger an intervention as appropriate.
So this is an example of thinking outside of the box, literally speaking.
Because this service is not to be sold in our stores.
They're going to be sold through Kaiser Permanente or UnitedHealth, so
through Medicare Advantage players.
And of course the customers will benefit and
these insurance companies will benefit.
Because our approach enables a reduction in the healthcare cost for
these aging seniors by about 20%, so it's very beneficial.
So it's an example of reinventing the company with the customer focus,
in line with our mission and our purpose.
>> All right, last question, if we think about this future, what we have, many more
devices in our homes, smart speakers, everything is connected, how does Best Buy
become top of mind for a customer, when so many other companies want to be that go-to
organization that consumers think about and they're connected homes?
>> Yes, so here is the scoop.
There's not a single home in America that's model brand, right?
If you take probably Tim Cook's home there's non Apple products at his home,
same with Jeff Bezos or Satya Nadella, right?
Because no company provides everything, and technology is more and
more exciting, but you need a CIO for your home.
And I want to be your guy, or your girl, and
help you figure out how can technology help you live a better life.
And then help you make sure that things keep going, right?
Because if Netflix is not working tonight, is it because of Netflix?
Is it the pipe into the home?
Is it the WiFi, the TV, the streaming device?
Honey, what is it?
And we're honey.
>> [LAUGH] >> Irrespective of where you bought
your products, we have this wonderful offering, total tech support.
With $200 per year, we'll support everything you have in your home.
So Best Buy's sort of a bit like the Colosseum, where the gladiators,
these big tech companies come and fight.
And we're here on the customer side, to help customers figure out what to do with
all of this, and how to take advantage of it, and live it.
So we're in the happiness business.
>> You're the trusted partner of the consumer in every home.
>> That's our aspiration, we want to earn the trust of the customers, and
become a key partner in their life, their key technology partner.
That's what we want to do.
>> Awesome, Hubert Joly, thank you so much for coming to Stanford.
Great job with Best Buy.
>> Thank you, Rob.
>> Thanks.
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