This time of year, Brian Tilzer is responsible for one of the most-visited shopping sites on the web: BestBuy.com. Tilzer also oversees the technologies used in Best Buy’s stores and its home technology installation services like Magnolia Home Theater — which needed to adapt to COVID-era concerns in 2020.
We spoke to Tilzer, Best Buy’s Chief Digital and Technology Officer, a few weeks ahead of Black Friday. The starting point for our discussion was how Tilzer and his team evaluate emerging technologies that could impact Best Buy’s business. “Ninety percent of what we do is about what’s the business outcome, the customer outcome, or the employee outcome we’re trying to accomplish,” he says. “It’s very outcome and use-case driven.”
That remaining 10 percent? Typically, it’s more exploratory — scouting for new technologies that could help Best Buy differentiate itself from other retailers. But Tilzer acknowledged that during the pandemic, more urgent priorities pulled resources away from that future-focused activity, into projects like curbside pickup and digitizing its home theater consulting offering.
Before joining Minneapolis-based Best Buy in 2018, Tilzer served as the first Chief Digital Officer at CVS Health, and Senior Vice President of Global E-Commerce at Staples. Excerpts from our conversation are below.
What Happened During the Pandemic
Historically, we had dedicated capacity in place that would look “technology back.” We’d say, what are the technological trends that are most meaningful to the customer experience, our growth, and how we operate? Then we would consciously identify technologies that we would want to experiment with.
That’s how I want it to work, and how we’re going to restart it [in 2022.]
But when the pandemic kicked in, we just got overwhelmed with priorities. We contemplated a world in which we were going to have to shut down our stores to customer traffic. [Best Buy shut all of its stores to customer visits in March 2020.] Over a weekend, we stood up a basic curbside pickup experience. We were the first national retailer to pivot to that model. Then we spent months and months making the experience better.
We stood up and invented virtualized versions of our [in-home consultation offering.] Initially, it was video chat. But now we have tools to capture data and pictures of people’s homes. We can create renderings, and provide recommendations. We’ve always had our Magnolia Home Theater brand, which is the premium solution. This is a model trying to democratize it, and make it a mass-market opportunity.
We launched a paid membership program, which is $199 a year. We’ll provide a warranty to all the products you buy, so you don’t have to buy extended warranty plans. You have access to chat or phone support, and other benefits. It’s our version of Prime.
We also launched same-day delivery, using our employees to do that. About 50 percent of our orders now go same-day.The underlying technology and algorithms to do that has been a big focus.
Three ‘Buckets’ of Technology Work
We’re very consciously putting things into three buckets. Bucket #1 is investments to accelerate what we deem as strategic priorities. The goal is the success of those priorities, which doesn’t always mean [having] a line-item value orientation for everything. We put massive investments into our data platforms, as an example, which are being supported around a strategic program related to building relationships with customers, and membership programs. So we have the capacity to invest disproportionately in those, and not have to describe every little thing that comes [out as a result of that investment.]
The goal is the success of those priorities, which doesn’t always mean [having] a line-item value orientation for everything.
Then, Bucket #2 is another set of investments where we need a business case; they’re to generate profit.
Bucket #3 is the technology-led innovation that we’re going to do. Our exploratory people got pulled into the fire drill stuff [during the past 18 months.] But I intend to re-allocate those people back to more R&D-oriented efforts next year. But this technology-led innovation that we’re going to do will be in areas of strategic priority for Best Buy. That’s the lens we’ll use to sift and sort through which [technologies] are the most capable of becoming meaningful.
As an example, the one that was on the list before the pandemic, and is on the list now, is blockchain. We haven’t gotten convinced that there is applicability to that in our business priorities yet.
Working with Established Vendors vs. Startups
I’ll be honest — we have approaches to engaging our big partners in co-innovation, but I’ve never seen it be a substitute for leaning in and exploring smaller companies. We haven’t had great luck in doing more free-form, early-stage innovation efforts with our big partners. Startups can be more nimble; they’re hungrier.
With the big companies, very quickly we run into intellectual property problems [around who will own the technology being created.] It’s very different from the smaller companies. Of course, there is additional overhead to get in the game with the small companies. But the formula I used at CVS and here is that part of the innovation capability is investment in the right legal, security, and procurement resources so we don’t kill the companies we’re trying to explore with. It’s embedded in the model. I saw that in my early days at CVS. One of the venture capital funds that we kept in close touch with said, “You guys are really hard to deal with.” That was the rallying cry.
How I Define Sucess
I define success differently here. You need to view success as the learning, not as the roll-out. In that view, you have success with every project. I don’t think of it as killing [a project]. I think you’ve achieved your learning objectives, but we don’t see a use, or a next learning objective, for that technology. But let’s keep it ready, for when the time may come. I have no doubt that there will be a use case around virtual reality goggles for us eventually. We sell a ton of Oculus in our stores. But we haven’t seen it yet.
You need to view success as the learning, not as the roll-out. In that view, you have success with every project.
Same with augmented reality glasses. We have some complicated operational processes, like repairing PCs at Geek Squad City, [a large repair facility Best Buy runs in Kentucky]. If someone put Google Glass on their head and could envision things differently, that could be powerful. But we haven’t seen that breakthrough yet.
When Organizational Readiness Meets Tech Readiness
With big companies, this is the thing I’ve seen in my own career. In my Staples days, I had something I pitched as the best thing ever — a business around janitorial and break room supplies. It got a little traction two or three years later. Then in my last two years, I tried again, and it bit. It’s now something like one-third of their business. My pitch had the same fundamentals the first, second, and third time. But in the first two cases, the organizational readiness wasn’t there. So one factor is organizational readiness — and the other thing is tech readiness. You’ve got to take a long view on this type of work.