How a legacy electronics retailer survived the showrooming era — and what enterprise leaders should read past the retail specifics to see.
By 2012, Best Buy was widely written off. Consumer-electronics retail was said to be structurally undone by Amazon. Customers were said to be using Best Buy stores as showrooms — inspecting products in person, then buying online for less. Analysts described the sector as impossible to save without a step-change strategy or an exit.
The publicly-documented problem was not a technology problem. It was an operating-model problem dressed as a channel problem. Store operations, vendor relationships, pricing authority, employee incentives, and the customer proposition all still assumed the store was the destination. Once the store became the showroom, the operating model produced the exact showrooming behaviour analysts described.
Hubert Joly, who became CEO in August 2012, launched a strategy publicly named Renew Blue. The strategy operated at the operating-model level: price-match Amazon to remove the price-arbitrage incentive that made showrooming rational; use the store's physical footprint as a distribution and fulfilment asset rather than defending it as a destination-only concept; rebuild vendor relationships around stores-within-a-store partnerships (Samsung, Apple, Microsoft, later others); reset employee incentives around service and knowledge rather than transaction closure; and invest in ship-from-store, in-store pickup and same-day delivery. Joly has written and spoken publicly about the emphasis on employee purpose and internal culture as core to the turnaround.
**SOURCE CLAIM:** Best Buy publicly recovered and continued as a going concern through the mid-2010s, contrary to widespread analyst expectations of managed decline. Corie Barry succeeded Joly as CEO in June 2019. Joly's own book, *The Heart of Business* (2021), narrates the internal turnaround and its cultural core. **JETTIFI ANALYSIS:** the durable outcome is that Best Buy demonstrated a legacy specialty retailer could reengineer its operating model in place, without gutting the business it already ran, and continue as a competitive operator rather than a managed decline.
The instructive part of the case is what Best Buy did not do. It did not respond to the showrooming diagnosis by attacking Amazon directly. It did not close the store estate. It did not attempt an e-commerce rebuild that would have destroyed the operating economics of the physical footprint. It reengineered the operating model such that the store estate produced a different set of behaviours — fulfilment, service, vendor partnership, employee expertise — and let those behaviours produce a different customer experience.
The reengineering lesson is that when a legacy operator is told its business model is dying, the correct question is usually not 'how do we replace it?' but 'what would our current operating model produce if we changed a small set of decisions upstream of it?' Price authority. Employee incentives. Vendor relationship terms. Store role. Sometimes changing those decisions is the whole transformation, and the technology follows.
For a mid-market or family-owned operator that has been told its business is being disrupted, the practical implication is that leadership's first move should be operating-model diagnostic, not strategic exit. Where in the current model do the observed customer behaviours become rational? Which upstream decisions produce those behaviours? What would a small set of operating-model changes do — before any large-format transformation programme is authorised?
**JETTIFI RECOMMENDATION:** treat every 'the business model is dying' brief as a hypothesis to be tested against the operating model before it is accepted. Diagnose which upstream operating-model decisions produce the observed decline behaviours. Sequence a small set of reversible operating-model changes before any large replatforming decision. Only after the operating-model diagnosis is complete should the technology decision be authorised — because most of the time the technology decision that would have been made without the diagnosis is the wrong one.
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