Best Buy’s stock jumped 14% recently after they shared their 2018 fourth quarter financials, which were much better than expected.
The Minnesota-based electronics retailer (yay Minnesota) shared that comparable topline sales were up 3% year-over-year, which was at the high end of the 0-3% range estimated by analysts.
When it came to the bottom line, Best Buy posted an adjusted earnings per share of $2.72, which is considerably higher than the $2.57-ish figure projected by company management and most industry analysts.
If you’re thinking… “How does a brand grow up big and strong when it’s been getting its lunch eaten by Amazon for so many years?”, you’re not alone.
This week’s deep-dive topic digs into Best Buy’s unlikely comeback and why emotional intelligence was one of its driving factors.
Best Buy’s better-than-expected fiscal year has a lot of marketers trying to glean any insights they can about how the electronics retailer defied the odds and over-delivered in 2018.
In a recent Inc. article, Justin Bariso suggested that brand emotional intelligence, among other things, was responsible for the company’s recent success.
In Best Buy’s case, the biggest threat to their business in the last ten years has been the concept of “showrooming,” which is when you visit a retail store like Best Buy to physically inspect a product, but then go online to purchase the item somewhere else, presumably Amazon.
When confronted with the decision of what to do about the problem, CEO Hubert Joly had the emotional intelligence to realize that instituting a price match guarantee was the only solution, even if it meant cannibalizing more expensive purchases.
In an interview with the New York Times back in 2017, he said, "Until I match Amazon's prices, the customers are ours to lose.”
If Joly had been in denial or wasn’t aware of the changing consumer habits, Best Buy would likely be on the list of once-great companies that failed to compete with Amazon.
We wanted to talk to someone who has first-hand experience creating an emotionally intelligent brand. And so we sat down to talk with Craig Key who recently joined restaurant delivery service, Waitr as their Head of Growth when they purchased Bite Squad for $321 Million in cash and stock in late 2018.
(Check out the video above to see our interview with Craig Key).
That’s going to do it for this week’s episode. What do you do to build an emotionally intelligent brand? What do you do to stay attuned to the needs of your customer and what should other people do that maybe they aren’t doing already?
Share your thoughts in the comments to help us all raise our emotional intelligence and you may just win a new shirt. We’ll see you next time!