Best Buy
 | The neutrality of this article is disputed. |
- For the defunct chain of catalog showrooms see: Best Products.
| Best Buy logo | |
| Company type | Public (NYSE: BBY) |
|---|---|
| Industry | Retail |
| Founded | 1966 |
| Headquarters | Richfield, Minnesota |
Key people | Brad Anderson, CEO & Vice Chairman Richard M. Schulze, Founder & Chairman |
| Products | Retail-Electronics |
| Revenue | US$29 billion |
1,795,000,000 United States dollar (2022)  | |
| 1,419,000,000 United States dollar (2022) | |
Number of employees | 110,000 |
| Website | http://www.bestbuy.com |
Best Buy Co., Inc. (NYSE: BBY) is a Fortune 100 company and the largest specialty retailer of consumer electronics, personal computers and related goods in North America. The company's subsidiaries include Geek Squad, Magnolia Audio Video, and Future Shop in Canada, which together operate over 1100 stores in the United States and Canada. Its headquarters are located in Richfield, Minnesota.
Retail offerings
Best Buy's US retail store subsidiary, Best Buy Stores LP, operates approximately 700 stores in the United States. While Best Buy is primarily associated with consumer electronics (largely audio-visual equipment), there is a variety of merchandise offered at its stores. A considerable amount of space is taken up by a department dedicated to video games, music on compact disc (as well as some other formats such as SACD, DualDisc, and DVD-Audio), as well as their selection of movies and television programs on DVD and UMD.
Home appliances such as washing machines, dryers, and refrigerators are usually featured off to one side of the sales floor, and a selection of office furniture is usually nearby.
Computers, computer peripherals and software traditionally take up large sections. Other areas include a smaller section of cellular phones and PDAs as is an area devoted to digital still and video cameras. A large area is taken over by televisions and related equipment. A department of audio and video equipment for automobiles is also in every store. Stores usually offer on-site installation services for car audio systems by way of a rear or side garage. Also included in each store is a Geek Squad "precinct" for computer repair and warranty service. While not a section in the store, Best Buy provides a digital photofinishing service under the name ImageLab for both its U.S. and Canadian markets, allowing customers to upload digital photos online and order prints for delivery by mail or pick-up in store.
The building exterior is usually light brown in color with the entrance in an area designed to look like a blue box emerging from the rest of the structure. Some Best Buys have a more utilitarian brick building without the blue structure.
Best Buy is noted for being staffed with non-commissioned sales associates.
History
In 1966, Richard M. Schulze opened Sound of Music, an audio specialty store, in St. Paul, Minnesota. The company grew over the following years, expanding to nine locations by 1980. In 1981, Schulze's most successful store was destroyed by a tornado. This event resulted in a highly successful sale that combined a large selection with low prices and heavy advertising. Similar "Tornado Sales" became an annual Sound of Music event. This was the predecessor to today's typical Best Buy store, with large quantities of product, recognizable staff in polo shirts, and lots of marketing.
In 1983, the company's name was changed to Best Buy Co. Inc., and the store shifted its focus to consumer electronics. Over the following decades, the company continued to evolve and grow.
In November 4, 2001, Best Buy purchased Future Shop, a similar retailer which operated in Canada. Best Buy continued to operate existed and trusted Future Shop locations while adding new Canadian stores under the Best Buy branding.
In 2002, Brad Anderson succeeded Schulze as Best Buy's CEO. The company also acquired Geek Squad®, a 24-hour computer support taskforce which borrows imagery from the FBI for its employees, which they refer to as "Agents." Their uniforms are starched white short-sleeved dress shirts, black pants, dress shoes and a (clip-on) black tie, and senior Agents also wear a badge on their belt. The secret-agent imagery even extends into the store, where their area is referred to as the "Precinct." The Geek Squad, founded by Robert Stephens in 1994, offers around the clock technical support on any computer problem at flat rate prices. Their clients include celebrities such as Larry King, The Rolling Stones, Ice Cube, and Cindy Margolis. In 2004, Geek Squad put precincts in every Best Buy store, nationwide, offering in-store service during store business hours in addition to 24/7 in-home services, known by the famous police-colored Volkswagen.
In 2003, Best Buy began to segment their stores, which is considered a major part of the company's "customer centricity" transformation. Customer Centricity is the theory that by placing the needs of the customer before the company (rather than attempting to maximize the profit of each sale), the company will in turn increase its growth by building customer loyalty. As part of the change, Best Buy no longer refers to their employees as "Product Specialists," but as "Customer Specialists." While many are well educated about the product they sell, employees are trained to give excellent customer service by asking "lifestyle questions" to determine the most suitable product, services, and accessories for the customer, in an attempt to give the customer the "complete solution" out the door.
New for 2006, Best Buy will be the main sponsor of Haas CNC Racing car #66 Chevy in the NASCAR Nextel Cup Series. Jeff Green is the driver, and Bootie Barker returns as crew chief.
Business
Customer Centricity
Customer Centricity is the name of a business movement centered around catering to specific customer demographics. These customer demographics are known as "segments". Segments are conceived primarily by the lead corporate office, and represent Best Buy's most profitable demographics. The current segments are given codenames for the groups they represent — Jill, Ray, Buzz and Barry. There is also Best Buy for Business, which caters to small and medium businesses as well as the government and education markets, that was intitally viewed as another segment but has since developed into a more concrete pillar of the company. There are demographics beyond these core five, such as the empty-nesters "Helen and Charlie", and the young, single woman "Carrie," however Best Buy has chosen not to build stores around these segments for now. [1]
"Jill" stores are a customer segment that represents the average suburban mom and differs from other Best Buy stores by stocking products and offering services for her and her family. Typically, this includes a greater emphasis on home and kitchen appliances, Hello Kitty and Disney products for the kids, and the addition of personal shopping assistants. Customers that fall into the customer segment "Buzz," however, are young men interested in the latest and greatest technology. When a new video game system is released, he purchases it. "Barry" is the sometimes older, typically wealthier customer, interested in the best technology he can get to fit his various needs without worrying as much about costs. "Ray" is the typical married blue-collar man, and while he may want the latest and greatest technology, his wife is often the one that gives him a jolt of reailty. "Ray" is not necessarily wealthy, and so prices and other special offers are very important while at the same time he values name-brands he can trust. Best Buy plans to add more customer segments as their customer centricity plan grows.
Segment stores usually start out as "lab stores" to test the area's acceptance to the theme and segment products and services. While the renovation of stores is expensive, sometimes nearing $1 million per store, CEO Brad Anderson claims that stores that have already been transformed have doubled their growth rate versus stores that have yet to be transformed. As of September 2005, only about 120 Best Buy stores have been segmented. Ongoing transformation has become focused less on segmenting individual stores towards a singular, targeted customer segment and more towards offering parts of each segment within every store.
Best Buy plans to move globally, as the electronics market in North America is already becoming saturated. Best Buy's international branch currently consists of Best Buy Canada, Future Shop and a sourcing office in China. Best Buy plans to open a test store in China in the fall of 2006.
As with most retailers, Best Buy owns some of the brands it sells by using large government-owned manufacturers in China to place a Best Buy brand on a variety of products. Best Buy has many private labels, from Insignia and Dynex to Init and Geek Squad. Insignia focuses on actual electronic equipment, including televisions, monitors, car stereos, home theatre systems, and portable audio players. Dynex focuses on a wide variety of computer and entertainment accessories. Best Buy avoids using the "Best Buy" name on these products to avoid the typical negative connotations of buying a store brand, and uses more than one brand name to give a greater sense of selection. By providing private label items, Best Buy can provide products at much lower prices than brand-name manufacturers, and gain more profit, while often retaining good quality products.
Service and Replacement Plans
Like many electronic retailers, Best Buy encourages customers (usually at checkout) to purchase a service plan on many products. Best Buy's service plans are underwritten by the insurance company AIG. In-home service plans for desktop PCs are administered by National Electronics Warranty (NEW). Best Buy offers three year on-site (in-home) and three year carry-in (in-store) Performance Service Plans (also known as PSPs) on desktop computer products, and up to five years on audiovisual electronics and household appliances (most with the in-store or in-home option). In addition, Best Buy sells an Accidental Damage Handling (ADH) service plan at an additional cost, covering some accidental damage such as liquid spills, screen breakage, and drops on notebook computers. Aside from the notebook ADH PSP, most service plans do not cover accidental damage, and none cover theft. PSP covered products are usually shipped to a service center for repair, where they can take up to three weeks to return. While most products must be brought to the store for repair, products such as large-screen television sets and home appliances; a technician may be dispatched to the customer's location. Best Buy's PSP has a "No Lemon" policy that guarantees that after three completed, documented and valid hardware repairs to a product, if it still fails a fourth time afterwards, may be replaced by a new product or a suitable new replacement may be given. There must be a hardware part replaced three separate occasions for the item to qualify.
The Product Replacement Plan is for some lower priced products where repair is not possible or economical. For example, items such as CD players, Xbox, XBOX 360, and PlayStation and other game consoles have a Product Replacement Plan (also known as a PRP) option. The PRP is a replacement only plan that is handled either by calling an 800 number to receive a voucher for the price of the product and a box with a pre-paid label to send the product back to Best Buy. Rather than simply replacing the product, the customer receives a voucher for the exact amount paid at the time of purchase. All service and replacement plans may be returned within thirty days in which the customer will receive a refund. After thirty days a customer will receive a smaller prorated refund during the life of the plan.
Accolades
Awards
Most recently, Best Buy ranked in the top 10 for "Best Customer Service" by National Retail Federation in 2005, a winner in Fast Company magazine's 2005 Customers First Award, named "Company of the Year" by Forbes magazine in 2004, "Specialty Retailer of the Decade" by Discount Store News in 2001, ranked in the Top 10 of "America's Most Generous Corporations" by Forbes magazine and made Fortune Magazine's List of Most Admired Companies in 2006.[2] [3]
Diversity
Best Buy received a 100% rating on the Corporate Equality Index released by the Human Rights Campaign starting in 2004, the third year of the report, based on their positions on the treatment of GLBT employees. Best Buy is an equal opportunity employer.
Criticisms
Like many retailers its size, Best Buy has its critics. Best Buy has at times been accused of poor sales practices even though none of the Customer Specialists (salespeople) are on commission.
Best Buy got major media attention that involved the release of the Xbox 360, where despite the lack of official bundle packages mandated by the company's main offices, some individual stores took it upon themselves to require customers to purchase large bundles of games and accessories if they wished to acquire a console. Soon after, however, this was ameliorated by the company-wide issuance of a suspension of the regular terms of the return policy, including those on opened video game software, for any customer who had purchased any Xbox 360 item on November 22, 2005.
Best Buy's critics mostly post in blogs, and on websites dedicated to criticism of Best Buy.
Incidents
On May 27, 2005, a New Port Richey, Florida, resident named Marlene Anne Bagnall allegedly held a Best Buy service technician at gunpoint due to his inability to repair a television. The aforementioned television had been previously serviced, though it had not worked to Bagnall's satisfaction. Apparently, the 58-year old John Meyer was held at gunpoint, with Bagnall demanding that the retailer give her a new television. Meyer could not call the police as she, allegedly, threatened to kill him as well as turn the weapon on herself (see: murder suicide) were he to do so. Once an unnamed Best Buy employee verbally promised the 44-year old Bagnall that she would receive a new television, Meyer was allowed to leave.
After leaving the premises, Meyer immediately called the local sheriff's office, which resulted in Bagnall's arrest. She was summarily charged with aggravated assault and unlawful imprisonment. She was subsequently released on a $10,000 bail prior to May 29, 2005, and has apparently had a history of mental disorders, which her husband claimed were being treated with medications. (Sources: [4], [5])
Past slogans
- "Thousands of Possibilities. Get Yours. Best Buy." (current slogan)
- "Turn on the Fun!"
- "Now that's a great idea!"
- "The intersection of technology and life."
- "Just the Store You've Been Shopping For."
- "More to Buy"
- "Great Prices. No Pressure."
- "Come in and Play."
External links
- Best Buy Main Site — Best Buy's main website, products can be viewed and purchased online.
- Best Buy Canada — Best Buy's primary presence in Canada.
- Future Shop Canada — Canadian subsidiary of Best Buy with similar products to a standard Best Buy.
- Geek Squad — Best Buy's computer support task force with precincts located in all Best Buys and some stand-alone stores
- Magnolia Audio Video — Subsidiary of Best Buy focusing on ultra-high-end home theatre equipment. Stand-alone stores as well as mini-stores within high-performing Best Buys.
- Best Buy for Business — Best Buy's division to cater to the unique needs of businesses.
- Best Buy Cares — A site where customers can take a survey about the service they received at a Best Buy store; this site is run by 3rd party Market Research company, The Link Group, on behalf of Best Buy.
- Best Buy Sux — A popular Best Buy criticism website.
- Best Buy Philanthropy — Best Buy donates 1.5% of it's profits to charity. This is the home of Best Buy for Children and other charity programs.
- Dynex — Best Buy's private label for computer and entertainment accessories.
- Insignia — Best Buy's private label for computer and entertainment systems, including televisions, car stereos, monitors, home theatre systems, computers, and portable audio players.
- eq-life — Best Buy's concept store featuring health technology products, a spa, salon and more.
- Studio D — Best Buy's concept store featuring technology classes and home merchandise. [6]
- Escape — Best Buy's concept store featuring rentable video game pods and can't find them electronics imported from overseas.
References
- "Best Buy's Giant Gamble" by Matthew Boyle, Fortune Magazine, March 23, 2006, retrieved March 24, 2006.