Home Media Magazine - September 28 - October 4, 2008 - (Page 19) 25 Continued from page 16 th anniversary The Minneapolis, Minn.-based chain’s recent $121 million offer to acquire music download pioneer Napster and rollout of a proprietary mobile phone service in the United States underscore its embrace of digital media at a time when many of its competitors focus on Web sites and staying in business. Best Buy, which celebrates the 25th year after its name change from Sound of Music, manages to remain relevant and trendy despite operating a business plan that continues to hawk washers, dryers and refrigerators. Household appliances accounted for about 6% of the chain’s $9.8 billion in revenue during its most recent quarter. With more than 1,000 U.S. stores, Best Buy generated a 4.2% same-store sales increase at stores open at least 12 months. Entertainment software, which includes DVD, Blu-ray and music CDs, represented $1.3 billion, or 16%, of domestic $8.1 billion revenue in the most recent quarter. Fiscal-year 2009 revenue guidance exceeds $43 billion (up from less $20 billion just five years ago), including a 3% comp-store sales bump. Best Buy in the early 1980s became one of the first consumer electronics chains to embrace home video, which helped boost annual revenue to $28 million from $9 million in 1981. It ranked as the top retailer of movie DVDs in the late 1990s, with annual revenue exceeding $162 million and a 12.3% market share, according to Video Store Magazine (precursor to Home Media Magazine) market research. DVD accounted for 75% of Best Buy’s total video software sales in 2000. Bill Clark, president of Anchor Bay Entertainment, said Best Buy represents a “rare combination” of packagedmedia retailer and promoter. “Not only do they respect the sheer volume of DVDs coming out every week … they are also on the front lines of helping consumers with the transition to high-definition and Blu-ray,” Clark said. “They truly represent the best of both worlds, past and future, DVD and beyond.” The chain launched BestBuy.com and Best Buy stores in Canada in 2002. The company opened its first global sourcing office in Shanghai, China, in 2003. The retailer, founded by Richard Schulze in 1966 as a repurposed small music retailer and re-christened Best Buy in 1983, continues to succeed in large part by thinking outside the box. Best Buy became a publicly traded company in 1985, with Schulze pushing the envelope until retiring in 2002. A notable departure from the typical CEO-driven corporate structure, Best Buy continues to credit and reward its 150,000 global employees as a backbone of its success. Schulze in 1989 bucked conventional wisdom and vendor dismay when he transitioned sales personnel from a commission structure to straight salary. Three years ago the company created TagTrade, a program that encourages and rewards employees who predict trends and new products. President and COO Brian Dunn makes a point to thank Best Buy’s employees at the start of every investor call. Employees feature prominently on Best Buy’s investor Web site, including smiling Mallory from store No. 611 flexing her bicep and thanking you for shopping. “In a tough market, they continue to create better experiences for our customers,” Dunn said. The immense workforce is split among retail locations, multiple call centers, Web sites, in-home Geek Squad and product delivery, among other fronts. In fiscal 2008, Best Buy donated a combined $31.8 million to improve the vitality of the communities where its employees and customers live and work. Keeping the staff happy is one thing, but maintaining a competitive edge resulted in Best Buy stepping back from upselling to ascertaining what consumers actually do with the products they bought, according to Nissa French, corporate spokesperson. “In the last five years, we shifted how we approach our work to focus on what someone actually does with the products we sell, asking ourselves, ‘How does it affect their lifestyle?’” French said. “We are focused on the use rather than the product specifically, and we think this is going to help us get a deeper, richer understanding of how to better serve our customers.” French said focusing on consumer habits with consumer electronics was an undercurrent to the Napster acquisition. She said the music download service strengthens Best Buy’s digital music credentials while offering customers devices and solutions that enable them to access their content wherever, whenever and however they want. President, “Best Buy believes that the proposed acquisition of Napster will allow it to build stronger relationships with customers, expand the number of subscribers and capture recurring revenue by offering ongoing value over a mobile digital platform,” French said. She said that despite the current economic situation, “our optimism and point of view about the future has not changed — we continue to operate our business with long-term perspective.” “We’ve chosen consciously not to pull back on our investments [i.e. employees], even in this difficult economy because we believe that when the U.S. economy regains its momentum, our results will show these to be good investments,” French said. She said that during tough times it is the employees who are connecting with customers and growing the business locally, which she said persuades customers to choose Best Buy over the competition. “Our employees’ expertise and their commitment to serving our customers is ultimately why we feel so confident in our growth opportunities,” French said. To help at the front line, Best Buy has added appliance vignettes to showcase appliances intertwined with electronics so consumers get a better idea how the products See BEST BUY, Page 20 “Not only do they respect the sheer volume of DVDs coming out every week … they are also on the front lines of helping consumers with the transition to highdefinition and Blu-ray.” Bill Clark Anchor Bay Entertainment Home Media Magazine September 28–October 4, 2008 19 http://www.BestBuy.com
Table of Contents Feed for the Digital Edition of Home Media Magazine - September 28 - October 4, 2008 Home Media Magazine - September 28 - October 4, 2008 Contents News High-Def News Electronic Delivery News TV DVD Best Buy/Hastings Health & Fitness Reviews Pipeline Top 20 DVD Sellers Research Top 20 Rentals and Top 10 Charts Just Announced Home Media Magazine - September 28 - October 4, 2008 Home Media Magazine - September 28 - October 4, 2008 - Home Media Magazine - September 28 - October 4, 2008 (Page Cover1) Home Media Magazine - September 28 - October 4, 2008 - Home Media Magazine - September 28 - October 4, 2008 (Page Cover2) Home Media Magazine - September 28 - October 4, 2008 - Home Media Magazine - September 28 - October 4, 2008 (Page 1) Home Media Magazine - September 28 - October 4, 2008 - Home Media Magazine - September 28 - October 4, 2008 (Page 2) Home Media Magazine - September 28 - October 4, 2008 - Home Media Magazine - September 28 - October 4, 2008 (Page 3) Home Media Magazine - September 28 - October 4, 2008 - Home Media Magazine - September 28 - October 4, 2008 (Page 4) Home Media Magazine - September 28 - October 4, 2008 - Home Media Magazine - September 28 - October 4, 2008 (Page 5) Home Media Magazine - September 28 - October 4, 2008 - Home Media Magazine - September 28 - October 4, 2008 (Page 6) Home Media Magazine - September 28 - October 4, 2008 - Contents (Page 7) Home Media Magazine - September 28 - October 4, 2008 - News (Page 8) Home Media Magazine - September 28 - October 4, 2008 - News (Page 9) Home Media Magazine - September 28 - October 4, 2008 - News (Page 10) Home Media Magazine - September 28 - October 4, 2008 - News (Page 11) Home Media Magazine - September 28 - October 4, 2008 - High-Def News (Page 12) Home Media Magazine - September 28 - October 4, 2008 - Electronic Delivery News (Page 13) Home Media Magazine - September 28 - October 4, 2008 - TV DVD (Page 14) Home Media Magazine - September 28 - October 4, 2008 - TV DVD (Page 15) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 16) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 17) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 18) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 19) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 20) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 21) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 22) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 23) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 24) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 25) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 26) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 27) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 28) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 29) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 30) Home Media Magazine - September 28 - October 4, 2008 - Best Buy/Hastings (Page 31) Home Media Magazine - September 28 - October 4, 2008 - Health & Fitness (Page 32) Home Media Magazine - September 28 - October 4, 2008 - Health & Fitness (Page 33) Home Media Magazine - September 28 - October 4, 2008 - Reviews (Page 34) Home Media Magazine - September 28 - October 4, 2008 - Reviews (Page 35) Home Media Magazine - September 28 - October 4, 2008 - Reviews (Page 36) Home Media Magazine - September 28 - October 4, 2008 - Reviews (Page 37) Home Media Magazine - September 28 - October 4, 2008 - Pipeline (Page 38) Home Media Magazine - September 28 - October 4, 2008 - Pipeline (Page 39) Home Media Magazine - September 28 - October 4, 2008 - Research (Page 40) Home Media Magazine - September 28 - October 4, 2008 - Research (Page 41) Home Media Magazine - September 28 - October 4, 2008 - Top 20 Rentals and Top 10 Charts (Page 42) Home Media Magazine - September 28 - October 4, 2008 - Top 20 Rentals and Top 10 Charts (Page 43) Home Media Magazine - September 28 - October 4, 2008 - Top 20 Rentals and Top 10 Charts (Page 44) Home Media Magazine - September 28 - October 4, 2008 - Top 20 Rentals and Top 10 Charts (Page 45) Home Media Magazine - September 28 - October 4, 2008 - Just Announced (Page 46) Home Media Magazine - September 28 - October 4, 2008 - Just Announced (Page 47) Home Media Magazine - September 28 - October 4, 2008 - Just Announced (Page 48) Home Media Magazine - September 28 - October 4, 2008 - Just Announced (Page Cover3) Home Media Magazine - September 28 - October 4, 2008 - Just Announced (Page Cover4)
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