Best Buy Mobile Survey Reveals Cell Phone Buyer Frustrations

In conjunction with the launch of its first Best Buy Mobile location in Canada, the retailer conducted a survey to find out what frustrates Canadians when it comes to the purchase of a mobile phone.

Not surprisingly, 60% cited dealing with service providers because of things like unbiased advice, the inability to change their service plans, and pesky hidden service fees. Best Buy's Director of Wireless Solutions, Phil Johnston, says that service providers "aren't giving transparent, unbiased information to their customers."

Of customers who own a mobile device, 74% say that a salesperson who's knowledgeable about service plans, not just devices, is "essential" to their shopping experience. (What on earth do the remaining 26% care about?) Just shy of 58% seek out a neutral, objective salesperson to walk them through mobile options as well. (Again, what are the other 42% thinking?)

Call me crazy, but I'd focus on getting rid of the hidden fees altogether instead of just revealing to the customer that hey, there are all these other fees that you'll be nickeled and dimed for. But that's up to the carriers, not the retailers, so I digress. In terms of working with what we've got, so to speak, being upfront and direct with the customer always helps; and it'll build credibility for any business.

Further to contract considerations, Best Buy Mobile's survey also discovered that 44% of new mobile phone buyers aged 35 to 54 say they struggle to get their fancy, new device up and running once they get home. While this might not have applied to the phones of yesteryear that simply charged up for 24 hours and were ready to go to make phone calls the next day, today's new data services can be overwhelming. How do I access the 'net from my phone? How do I set up my e-mail account on a BlackBerry? I bought a Bluetooth headset and a Bluetooth-equipped phone, but now how do I get them to talk to one another? To industry members, these questions sound silly. To the average consumer, they are often head-scratchers.

Not surprisingly, the survey ties in with strategies that Best Buy is taking with its new Mobile standalone and store-within-store locations, including employing non-commissioned salespersons, and a walk-out working program that will provide coaching and set-up up for customers before they leave the store. The neatest aspect of the service, in my opinion, is a machine that the salesperson can use to transfer all the data from your old phone to your new one in a matter of minutes. Now that's service!

The survey was conducted online by Angus Reid Strategies on August 25 and 26, 2008 with 1,003 Canadians.

Best Buy Buys Napster...Why?

The big news today is that Best Buy in the U.S. has purchased online music download company Napster for a reported US$121 million. Which begs the question: why?

Online music downloading has been an arguably struggling business for years, plagued by illegal, peer-to-peer (P2P) music Websites and customer's (warranted) hatred of silly things like DRM that prevent you from listening to purchased tracks on various devices, or burning them to CD. According to the Financial Times, Napster actually reported a loss of US$16.5 million in the year ending March 31.

Along with the still existent P2P activity and DRM (which is slowly melting away, but could see a resurgence thanks to the Government's Bill C-61), online digital download sites like Napster still have to fight the leader in that realm: iTunes. And with the iPhone added to the iPod family, iTunes will likely continue to be the leader of the pack, likely by an even bigger gap.

I'm trying to fathom why Best Buy would take on the task of competing with iTunes. The only thing I can come up with is that the strategy works in tandem with the retailer's recent move to ramp up its involvement in the mobile phone arena. Best Buy is opening standalone Best Buy Mobile stores that sell mobile phones. As is evidenced by devices like the iPhone, Nokia N95, and Sony Ericsson Walkman phones, music is becoming a huge part of the mobile phone experience. Could Best Buy be working out deals with carriers to link Napster downloading with their services? Or is Best Buy just looking to get back into this side of the business now that companies are offering DRM-free tunes that are more appealing to customers?

On the portable media player side, perhaps this is a way for Best Buy to make money on the sale of devices other than the iPod. Maybe a Napster subscription will be offered as an incentive to the purchase of an MP3 player. Or on the flip side, maybe "deals" on music downloading will be awarded in store on purchases. Who knows.

While there's no official comment on how the takeover might affect the Canadian market, my guess is that Best Buy is just testing the waters for now, and making sure that the company is well equipped to compete should digital music downloading take a significant upsurge in the next few years. While I'm rooting for this to take off, I'm not holding my breath either.