Higher Ed Fragility and the Surprising Story of Best Buy

Academic lessons from a chain that was supposed to die, but didn’t.

July 25, 2018

Working in higher ed feels - well - it feels fragile.

For those of us who work at colleges and universities who don’t have tenure - which is most of us - life doesn’t seem all that secure. We read about the 80 Staff Layoffs at Northwestern, and we think that could be us.  If you want to really depress yourself, do a search of “layoffs” on IHE (or just click this link), and then come back and tell us about your mood.

If you want to get really depressed, check out the Moody’s report on college closures, and then go read Bryan Alexander’s work hypothesizing that higher ed may be overbuilt.

Maybe a career in higher ed is more stable than those of our cousins in print journalism. We just learned that the NY Daily News is laying off half of its reporters and editors.  The number of jobs in newspapers has shrunk from 424,000 in 2000 to 183,300 in mid-2016. Saying that “at least we are not working at a newspaper” seems like cold comfort.

So I read with great interest a story on Bloomberg.com with the headline: Best Buy Should Be Dead, But It’s Thriving in the Age of Amazon

Big box electronic stores were supposed to go the way of video rental stores and film camera companies. Digital was supposed to kill them. Why drive somewhere to shop for electronics when shopping is cheaper, faster, and easier on Amazon?

How did Best Buy do it?  And more importantly, can we learn anything from Best Buy that will help us keep our higher ed jobs?

The whole idea that we can learn something from companies like Best Buy that will help us make higher ed more resilient is questionable. Maybe even dangerous. We are at risk of drawing all the wrong lessons.

Higher ed is different from other industries. We have a social purpose. We are a public good. We are both highly regulated and significantly supported by public investments - although those investments have been declining dramatically in relative terms to total costs. Still, maybe we can get some ideas. Perhaps we can practice some lateral thinking. Make an attempt to see our own blind spots.

The Bloomberg articles draws 3 conclusions as to why Best Buy seems to be doing so well, when the likes of Circuit City and other big box retailers rolled over and died.

Reason #1 - Last One Standing:

One reason that Best Buy seems to be doing well is that everyone else is gone. For some electronics purchases you really do want to lays hands, eyes, and ears on the thing. Sometimes you need to ask a person for advice, as we know that customer reviews on Amazon are notoriously unreliable.

The lesson here may be that some people, maybe even a sizable portion, will want a traditional university experience. They will want a campus. Classrooms to be in the same room as professors and other students. A chance to either leave home after high school, or leave one’s computer screen.

Not everybody will want to learn from adaptive platforms. From online education programs. The traditional university has lasted a long time because it has evolved to do an incredibly large number of things very well. The challenge with traditional universities does not seem to be so much demand, but costs.  (Although challenging demographic trends will damper demand for traditional-age students in the Northeast and Midwest).

Perhaps we should be less quick to assume that the model of the traditional campus institution is an artifact of the pre-digital age.  A better way to think about this is that analog (campus) and digital can complement one another.  We just need to stick it out.

Reason #2 - Aggregator:

The Bloomberg article attributes much of Best Buy’s success to their brand neutrality.  You can go to Best Buy and sample Apple and Microsoft products.  Even Google and Amazon have a presence in the stores.

The relevant quote from the article is:

"Best Buy is neutral ground. The brands essentially pay rent to Best Buy (it’s cheaper than building stores) and either send in their own salespeople or train the blue shirts. No one at Best Buy would offer details about these partnerships. But even analyst Michael Pachter of Wedbush Securities Inc., who in almost 10 years has never recommended buying Best Buy’s stock, describes the partnerships as a phenomenal success because they ease the financial burden of operating stores while enhancing profit margins. “Best Buy is like an arms dealer,” he says. “They’re indifferent to what brand you buy as long as you buy it from them.”

What is the higher ed equivalent of an aggregator?

Colleges and universities have long experience in building consortiums. Who doesn’t love interlibrary loan?  We collaborate on all sorts of things, from athletics to academics.

But maybe we could take collaboration much further. It may be worth a thought experiment about what it would look like to open a pop-up college within the campus of another university. Can we imagine having different institutions represented on a single campus?

Reason #3 - People:

The Bloomberg article makes much of Best Buy's new “in-home advisors” service. This sounds like a mellow version of the Geek Squad.  The idea is to build long-term relationships, not to drive unit sales.  The specially trained in-home advisors will get to know their clients.  They will then be able to help them set-up networks, security systems, TVs, whatever.  The idea is that over the long run, a relationship will bring in more revenues than a focus on immediate sales.

There is a question about the degree that Best Buy can offer exclusive personal services. Amazon could also hire an army of in-home advisors.  Still, it seems as if Best Buy is able to leverage its advantages of physical stores, experience with the Geek Squad, and brand neutrality to build this new relationship based service.

The personal touch is where traditional higher ed shines. Digital platforms and non-traditional credentials will commoditize higher education. Students will ultimately value relationships over content.

Smart colleges and universities will invest in people. But they will make sure that these people have direct contact with students. We will see a decline of higher ed jobs that are “below the waterline”, where the positions don’t have a direct connection to students.

It is a truism that the most important asset an organization has is its people. These people are not being fully utilized, however, if they are invisible. Staff need to have a role in core educational mission of the institution. They need to be visible and present. They need to build relationships.

Of all the non-professors on campuses, the people who do this best are librarians.  (And yes, I know that at many institutions, librarians also have faculty status).  My point is that librarians have a long history of developing strong personal relationships with students.  They are collaborators and partners in the research and writing process.  All of us should learn from academic librarians to be more public facing, more relationship driven, and more visible and accessible.

Or maybe if colleges want to thrive economically then they should hire more librarians.

What do you think we might be able to learn from Best Buy?


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