Who Will Buy It?

Not everybody has the peculiar neurons needed to link a laptop to a wireless modem with ease, least of all Charlene Monzo. "I haven't made much progress with computers," she admits. "I'm paper generation." That's why Geek Squad double agent Cyrus Tavadia, decked out in his black-and-white uniform, with white socks and clip-on black tie, has dropped by her 35th-floor Manhattan apartment--to connect the technophobe wirelessly to the hyperlinked labyrinth of the World Wide Web. Under his polite tutelage, Monzo, 55, learns in a couple of hours how to use the computer mouse, launch Internet Explorer and--the main thing--look for jewelry and fashion sites on Google. The setup and an hour-long training session cost $159 each, but when Tavadia's done, Monzo all but begs him to come back. "He's amazing," she exclaims. "He's fabulous. He explains everything."

That kind of reaction is music to the ears of Best Buy CEO Brad Anderson, who is on a campaign to reinvent

the U.S.'s leading consumer-electronics retailer as not just a seller of digital TVs and portable electronics but also a provider of tech services for consumers and small businesses. With about 16% of the $124 billion domestic consumer-electronics market, Best Buy offers Anderson a solid and profitable perch from which to begin. Morgan Stanley estimates that Best Buy had sales of $27.5 billion in the fiscal year just ended, up from $12.5 billion five years ago. Archrival Circuit City has seen sales decline from $12.6 billion to an estimated $10.3 billion over the same period. Research firm Retail Forward says Best Buy generates $870 in sales per sq. ft. of retail space, in contrast to Circuit City's $480. (Highfields Capital, a large Circuit City investor, offered to buy out the company for $3.25 billion last month.)

But Best Buy's competition is far broader than Circuit City, from direct sellers like Amazon and Dell to the quintessential category killer, Wal-Mart, which analysts estimate sold $17 billion in electronics in 2004. With challengers like those, Best Buy knows it cannot compete on price alone. Instead, CEO Anderson, a 32-year veteran at the company who began as an in-store salesman and ascended to the top job in 2002, wants Best Buy to differentiate itself by focusing on upscale customers and providing them with the hand holding and service that today's increasingly complex electronics invite but that the Wal-Marts of the world, with their lean staffing, aren't equipped to provide.

The Geek Squad is one part of that effort. Best Buy bought the business--an independent computer-support firm based in Minneapolis, Minn.--from its founder, Robert Stephens, in 2002, after working with Geek behind the scenes for two years. Today there are 7,500 agents spread across all 668 of Best Buy's U.S. stores, led by "chief inspector" Stephens. So-called counterintelligence agents work inside the stores to help befuddled shoppers select their wares, while badge-toting double agents like Tavadia make house calls in branded, black-and-white Volkswagen Beetles. "I'm trying to build an army," Stephens likes to say, "and my goal is complete world domination of the computer-support-services market."