Best Buy gets into beauty
Best Buy Canada has always been synonymous with devices that plug in, from computers to cameras, TVs to car stereos. But now the consumer electronics retailer is plugging into something totally different with the launch of an online lifestyle brand that sells everything from vitamins to highchairs.
Why is a retailer famous for its Geek Squad computer support team and video game selection selling yoga mats and apple cider vinegar shampoo? Turns out, Best Buy Canada is simply giving the people (in this case, female online consumers) what they want.
And what it has found these Canadian women want is the ability to buy personal care, baby, naturals, and health and wellness products in one place online. The “Viva from Best Buy” website–which is accessed through BestBuy.ca’s homepage–is the company’s attempt to fill a gaping hole in Canada’s e-commerce landscape.
Because if there’s a country ripe for an e-commerce boom, it’s ours. Canadians are digitally savvy, our internet and smartphone penetration is one of the highest in the world and–to top it off–we love shopping online.
In fact, B2C e-commerce sales in Canada are expected to grow from $24.5 billion in 2013 to nearly $35 billion by 2016, according to an eMarketer report. On the other hand, Best Buy Canada director of marketing Aliya Reynolds points out that Canadians often do their online shopping using sites based outside of our own borders. “The Canadian marketplace is being underserved when it comes to e-commerce,” says Reynolds.
That wasn’t the only thing that prompted the consumer electronics giant to start targeting women 25-54 with things like mascara and contoured pillows. Best Buy and its sister company Future Shop already have a sizeable share of Canada’s $20-billion consumer electronics market. But with Viva, it has the chance to open up entirely new revenue streams, says Reynolds. “There are so many other categories that we’re not in that consumers are looking for an e-tail experience for.”
That’s why Best Buy Canada started carrying products beyond consumer electronics–or what Reynolds calls its “expanded assortment” –such as travel, sports, home and garden items on its site as far back as a year ago. More than 50% of the customers shopping for that new offering were female and there was year-over-year growth in the percentage of females buying the products, says Reynolds. That insight led to the birth of Viva, which launched in June. “It made sense for us to create a brand that spoke to those customers in a very vertical and targeted way,” she says.
Still, is a company built to sell DVDs and TVs cut out to sell shampoo and toothpaste? Absolutely, says Reynolds. Best Buy already has strong foundation in terms of infrastructure, from its distribution network to free shipping on orders more than $20 to the in-store return policy for goods purchased online. And if the 10% of all web orders on BestBuy.ca that Viva represented in the first week since launch are any indication, the brand is off to a solid start.
And what it offers is much more than a place to stock up on teeth whitening strips or snag a gift set for a newborn; it’s also got content such as product reviews, forums and blogs in the Viva Chatter community. The interactive component is basically the most integral part of Viva, says Reynolds, because Best Buy is striving to deliver a hub that gives customers unique content that’s meaningful to them. The company’s competitive analysis showed that when a mass of content isn’t curated on a site, “it makes the customer experience pretty horrible,” she says.
Which sites does Reynolds consider to be Viva’s competition? “We actually don’t see Viva having a competitor, to be quite frank,” she says, so the company’s competitive analysis took into account more generalist e-tailers such as Amazon.ca and Walmart.ca. “There is not an offering that we see as rich and meaningful as Viva is in the Canadian marketplace. There is no e-commerce offering in Canada that offers the products we offer.”
A handful of pharmacies that carry a lot of the same categories, such as Jean Coutu and London Drugs, do actually sell some of them online, but most pharmacy sites merely offer an e-flyer and the ability to refill prescriptions. For its part, Shoppers Drug Mart launched a beauty site, Murale.ca, last year and reportedly has plans to push further into e-commerce.
With roughly 4,000 SKUs on the site currently and many more being added each week, Viva will be launching style (i.e. fashion and accessories) and beauty categories next. Best Buy Canada has already been leveraging its core vehicles–including flyers, e-newsletters and social channels—to let existing customers know about Viva. Once the two new categories roll out, Reynolds says it will use an integrated campaign with a heavy digital component to reach new customers. “We also expect to do more PR and more events and more experiential,” she adds.
Best Buy does, after all, need to get the word out to the masses; it’s no longer just tech geeks and TVs. It’s health and beauty, too.