[credit provider=”Flickr / roblawton” url=”http://www.flickr.com/photos/roblawton/5005047676/”]
New Best Buy CEO Hubert Joly elaborated on his plans to turn around the ailing retailer in an interview with Reuters on Monday, and he noted that he’s going to part of his first week on the job working on a Best Buy sales floor.Why’s he doing it?
Well, it’s not a mere PR stunt to make his workers like him.
Analyst Brian Sozzi at NBG Productions explains in a note this morning:
“Since his presence will likely be known, we think this exercise in minimum wage land is being done to gain valuable retail street cred in the eyes of the founder (adds more credibility to a Joly restructuring plan, better case to shareholders should Schulze lowball) plus unearth ways to pare expenses through improved processes.
There is a customer service improvement aspect of course, but Joly is more keen on finding out how to drive a productive workforce (doing more with less as to reinvest savings in lower merchandise prices ala Wal-Mart) and inventory investment (example: seeing how goods are stacked in the stock room, which items don’t need to be in the stock room, and how technology could speed up the handling of inventory from truck to store floor).”
Yes, he’ll get some street cred for doing this, but remember that Joly has very limited retail experience. He’s being paid tens of millions to make Best Buy more efficient, and he can’t do it without seeing how things work at the most granular level.