Merge

Terry Weaver is a guest blogger for Merge and also serves on our Board of Advisors. Terry is the Owner and CEO of Chief Executive Boards International, a supportive, collaborative and confidential peer advisory community for entrepreneurs, business owners, presidents and CEOs that is focused on members helping members to achieve balance and success in their lives. You can also check out Terry's Blog at www.chiefexecutiveblog.com.

I saw a TV commercial from Best Buy this week, saying "If you come shop for a cell phone at Best Buy, we'll not only help you pick the best device and best carrier for you, but we'll also move all your pictures, contacts, etc. from your old phone to the new one."

Brilliant!! At last, a reason to buy something at a retail store! Frankly, I've become seriously concerned about the future of retailing. The "big box" stores like Best Buy have only 2 things going for them -- they stock the products, so you can get them today, and you can see & touch the products (if they happen to be in stock).

Commodity products like phones (and phone services, for that matter) are a tough place to be, and Circuit City's recent demise underscores how hard it is to make money selling essentially the same thing everyone else is selling.

Best Buy has figured out how to market an "augmented product" -- a commodity product (available anywhere, probably cheaper) augmented by the addition of a critical service -- that of helping you migrate from what you have to what you buy. What a great plan -- a way to increase the "reason for being" of an electronics retail store, a business model whose reason for being has been steadily eroded by a decade of migration toward online channels.

Have you taken a look lately at augmented product opportunities in your business? What service could you offer to your customers to set yourself apart from other competitors? Look at things the customer has to do before, during or after he uses your product. Is it design? Is it inventory? Is it training? Is it field service? Or something else?

If you're in a service business, are there products your customer needs before, during or after you provide your service? Could you deliver those as an augmentation to the service you're now providing, and take a margin on them? You're there anyway and you have a relationship already.

The Internet has become the great disintermediator. It has evaporated the reason for being of many businesses, particularly those formerly occupied by agents, reps, distributors or retailers. If you're in one of those "middleman" channels, you're in the gunsights of the Internet, and your business is likely to be next. Mount your defense in advance by augmenting the product you provide with services your customer needs, thereby providing an indispensable combination and increasing his "switching costs" -- he has to find and coordinate more than one vendor to replace you.

So, just when I thought big box retailing was an endangered species, Best Buy came up with a way, in at least one product line, to increase its reason for being. Way to go, guys!