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Best Buy hires Starbucks CIO to strengthen its mobile strategy

In what likely means a major step forward for its mobile strategy, Best Buy has hired Stephen Gillett, an instrumental force in Starbucks’ mobile successes over the past couple of years, as executive vice president and president of the newly formed Digital and Global Businesses Services division.

Mr. Gillett joined Starbucks in 2008 as its CIO and helped form the Digital Ventures business unit that made Starbucks a leader in mobile payments, created best-in-class smartphone apps and put free Wi-Fi in stores. Best Buy will look to Mr. Gillett to help it make technology a bigger part of the customer experience while enhancing operations and processes.

“E-commerce is one of the fastest-growing areas of our business as demonstrated by the strong online sales over the past two quarters – up 13 percent and 20 percent – and December – up 26 percent,” said Sue Busch Nehring, a spokeswoman for Best Buy, Richfield, MN. “We want to build on that momentum and Stephen’s track record makes it clear that he can help us engage customers online, through multiple devices, in ever more compelling ways.

“We know that there are many more opportunities beyond online sales to connect with customers and prospects and bring greater value and ease of interactions to the relationship,” she said.

Bridging retail, digital
Mr. Gillett, who begins his new role at Best Buy on March 14, will lead the company’s ecommerce business, information technologies and global shared services.

The retailer will look to leverage Mr. Gillett’s experience bringing together retailing and digital technology to deepen relationships with customers. For a growing number of retailers, mobile is the key to helping them make the connections between in-store experiences and the digital world.

“What we see with a lot of retailers is that a lot of mobile innovation slows or dies in the hand off between the digital and physical arms of the business,” said Stephen Burke, vice president of the mobile practice at Resource Interactive, Columbus, OH.

“The issues are no longer around the mobile technology being available,” he said. “It is more about integrating between the physical and digital sides of the business and Mr. Gillett is out in front of that.”

Best Buy was an early adopter of mobile technology to enhance the customer experience.

The chain was one of the first to roll out a mobile app that leverages QR codes in stores and ties that into their loyalty program.

Best Buy’s list of apps includes the Best Buy app, the Movie Mode app, the Game Trade-in app and the Buy Back app, which lets users figure out how much money they could get back from their old tech.

Hiring Mr. Gillett on the heels of his success at building Starbucks’ mobile business suggests Best Buy wants to hold onto its position as a leader in mobile retail by continuing to innovate.

However, while Best Buy and other retailers are embracing mobile for its ability to enhance the relationship with customers they also face growing concerns such as the use by shoppers of mobile apps that let them compare prices, also called “showrooming.”

Combating showrooming
Best Buy has an opportunity to be a leader if it can successfully fashion a mobile experience that acknowledges showrooming but prevents customers for purchasing elsewhere.

“Best Buy’s successes or challenges in building a mobile experience are going to be critically important to the rest of the industry – can they create so compelling of a mobile experience as part of in-store shopping that they can use that to fight showrooming?,” said Nikki Baird, managing partner, RSR Research, Miami.

“There are a lot of other retailers out there, beyond electronics retailers, that will find the answers to those questions very important to their own businesses,” she said.

Going forward, Best Buy will also need to address areas such as mobile payments and mobile loyalty if it wants to continue to be at the forefront of retailers in mobile.

“I’d put Starbucks right next to Best Buy in the retail mobile innovators’ hall of fame, so it definitely reaffirm’s Best Buy’s commitment to mobile strategy in my mind,” Ms. Baird said.

“One area where Starbucks has been really advanced is in mobile payments – so I would look to some of that expertise surfacing now in Best Buy’s strategy,” she said.

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York