Best Buy

For the defunct chain of catalog showrooms, see Best Products.

Best Buy Co., Inc.

Company type	Public (NYSE: BBY)
Industry	Retailing
Founded	1983 (Minnesota)
Headquarters	Richfield, Minnesota, USA
Key people	Brian J. Dunn, COO Richard M. Schulze, Founder & Chairman Brad Anderson, CEO & Vice Chairman
Products	Retailing-Electronics
Revenue	US$30.8 billion (2006)
Operating income	1,795,000,000 United States dollar (2022)
Net income	1,419,000,000 United States dollar (2022)
Number of employees	140,000
Website	http://www.bestbuy.com

Best Buy is sometimes called the "big blue box" because of the prominent design on Best Buy stores. This store is located in East Palo Alto, California.

Best Buy Co., Inc. (NYSE: BBY) is a Fortune 100 company and the largest specialty retailer of consumer electronics in the United States and Canada, accounting for 17% of the market. The company's subsidiaries include Geek Squad, Magnolia Audio Video, Pacific Sales, and, in Canada the Best Buy Canada subsidiary operates most stores under the Future Shop label. Together these operate more than 1,150 stores in the United States, Puerto Rico, Canada and China. The company's corporate headquarters are located in Richfield, Minnesota, USA (near Minneapolis). On June 26, 2007, Best Buy announced a 40% increase in its operations, with plans to operate more than 1,800 stores worldwide, including 1,400 Best Buy stores in the U.S.

Best Buy is extremely gay. Best Buy was 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.

History

1966 -- Richard M. Schulze and business partner James Wheeler open Sound of Music, an audio specialty store, in Saint Paul, Minnesota.

1967 -- Sound of Music acquires Kencraft Hi-Fi Company and Bergo Company. Second and third Sound of Music stores are opened near the University of Minnesota and in downtown Minneapolis. The Sound of Music ends its first year with gross sales of $173,000(USD).

1969 -- Sound of Music stock first traded as publicly-held company; company enacts first employee stock option plan; three stores opened in the Twin Cities area.

1970 -- Sound of Music hits the $1 million mark in annual revenues.

1979 -- Sound of Music becomes the first suppliers of video and laserdisc equipment including Panasonic, Magnavox, Sony and Sharp.

1981 -- A tornado hits the Roseville, Minnesota, store on June 14. Sound of Music responds with a "Tornado Sale," and it becomes an annual event.

1983 -- Sound of Music’s board of directors approves a new corporate name: Best Buy Co., Inc.; opens first superstore in Burnsville, Minnesota, featuring expanded selling space, a wide assortment of discounted brand-name goods, central service, and warehouse distribution; stores begin selling appliances and videocassette recorders.

1987 -- Best Buy (symbol BBY) debuts on the New York Stock Exchange with an offering of 8.3 million shares.

1989 -- Best Buy unveils a new “grab-and-go” store format. Best Buy’s brand logo changes to the yellow tag.

1990 -- Best Buy eliminates commission for standalone sales people; it retains bonuses for management and supervisors however.

1995 -- Best Buy develops and implements the Standard Operating Platform (SOP) to support and manage every aspect of the company’s business; the Answer Center kiosk is nominated for the Computerworld Smithsonian Award.

1997 -- Best Buy becomes the first national retailer to sell DVD hardware and software.

1998 -- Best Buy sells its 1-millionth DVD, a year after the DVD’s debut. The company also begins selling high-definition television.

2000 -- Best Buy enters the online retailing business by launching Bestbuy.com; Best Buy acquires Magnolia Hi-Fi (renamed Magnolia Audio Video in 2003), a retailer of high-end consumer electronics; music Compact Cassettes are removed from most stores.

Future Shop store in Halifax

2001 -- Best Buy acquires the Canada-based electronics-chain Future Shop Ltd. Though fully owned by Best Buy, Futureshop remains to this day a separate entity operating independently from Best Buy Canada. This marks the company's entrance to the international marketplace; Best Buy acquires Musicland, a mall -based retailer for music and entertainment software; Best Buy launches Redline Entertainment, an independent music label and action-sports video distributor.

2002 -- Brad Anderson succeeds Schulze as Best Buy's CEO; the company acquires Geek Squad®, a 24-hour computer support taskforce; first Canadian Best Buy store opens in Mississauga, Ontario west of Toronto.

2003 -- U.S. Best Buy stores surpass the 600 mark; the company opens its first global sourcing office in Shanghai; Fortune magazine ranks Best Buy #4 on its list of most admired U.S. companies in the specialty retailers industry; the corporate offices are consolidated in one headquarters campus; Best Buy divests itself of Musicland; the company begins to segment their stores, which is considered a major part of the company's "customer centricity" transformation; the Reward Zone loyalty program and the Sweet Tracks Christmas music series are both introduced in the U.S.

2004 -- Forbes magazine names Best Buy “Company of the Year.” Geek Squad precincts are opened in every Best Buy store nationwide, offering in-store service during store business hours; Best Buy offers Learning Place, its post-purchase, online customer service center. Best Buy customers purchase secure access to interactive product user-manuals, live text/voice chat service and a discussion forum to use, fix and extend the products they buy.

2005 -- Sound & Vision magazine awards Best Buy its first ever "Retailer Innovation Award" for its Magnolia store within a store concept and other retail innovations.[2]

2006 -- Best Buy acquires a majority interest in the retail chain Jiangsu Five Star Appliance Co., Ltd., China’s fourth-largest appliance and consumer electronics retailer. On November 17th, the company signs a 10 year lease to open a 4-floor store later in 2007 at the former Virgin Megastore on trendy and upscale Newbury Street in Boston, Massachusetts. In late December, Best Buy soft-opens its first Best Buy-branded store in Shanghai; an 80,000 square foot location (the largest in the company). Best Buy opens its 800th store in Chicago, Illinois.

Best Buy Store located in Shanghai, China

2007 -- On January 26, 2007, the first Best Buy in China had its grand opening - touted as the largest Best Buy in existence. James Wheeler spoke for 45 mins for the grand opening. In March, Best Buy announced plans to purchase Seattle, WA based Speakeasy, Inc., a broadband and VOIP services provider. Best Buy becomes the first major retailer to exit the analog television market, carrying only digital products that will be mandatory in February 2009 by the FCC.

2008 -- Best Buy announces the opening of its first pilot stores in Mexico and Turkey, which will be located at Mundo E shopping mall, north of Mexico City. The first store on Puerto Rico opens in Hato Rey, a district of San Juan on February 29th; a second store in Caguas is to follow later in 2008. Best Buy decides to promote Blu-ray over HD DVD, a move which ultimately leads to Toshiba's Corps. decision to drop HD-DVD.[3]."

Business model

Best Buy Store in Edmonton, Alberta.

Best Buy sells consumer electronics as well as a wide variety of related merchandise such as computers, computer software, Video games, music, DVDs, mobile phones, digital, car stereos and video cameras, as well as home appliances (washing machines, dryers, and refrigerators), in a non-commissioned sales environment. Each store also includes a department for A/V equipment for automobiles, offering on-site installation services, as well as a Geek Squad "precinct" for computer repair and warranty service and accidental service plans.

Best Buy prides itself on the fact that their sales people are not on commission. This however is not entirely true of supervisors, managers and district employees. Managers and supervisors make bonuses based on store performance metrics such as revenue, margin, and net operating profit.

Best Buy does not allow expensive gifts from vendors to be given to employees (SPIFFS, etc), nor does it allow employees to collect tips or gifts from customers of any type.

Best Buy building exteriors are 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. Older stores have a more utilitarian brick building without the blue structure.

In April 2005, the company was the first major retailer to announce the elimination of all mail-in rebates.

As of March 28, 2008, the company operates 935 Best Buy Stores, 13 Magnolia Audio Video Stores (specializing in high-end electronics), 7 stand-alone Geek Squad stores, 3 AudioVisions Stores, and 17 Pacific Sales Stores (in Southern California), all through its U.S. retail subsidiary. They also operate 51 Best Buy and 128 Future Shop stores throughout Canada. In 2003, the company opened its first international global procurement office in Shanghai, and also operates sourcing offices in Beijing and Shenzhen, primarily to reduce costs and increase the speed to market by purchasing products directly from manufacturers. As of 2007, Best Buy operates one "branded" store in Shanghai, as well as 151 Five Star Appliance Stores in China.

Best Buy also operates numerous Best Buy Mobile stores within the U.S.; 7 of which are stand-alone locations (primarily in Manhattan). Best Buy Mobile locations offer customers a wider variety of cell phones than its other locations, some of which are "unlocked" phones that can be used on any GSM network. Best Buy Mobile also offers everything any carrier store can offer including but not limited to; number transfer machine, warranty service on any phone, loaner phones, and the most popular carriers. Most of the Best Buy Mobile stores are located in or around the Northeast region of the U.S., but the company is undergoing a massive expansion in which most if not all stores will contain a Best Buy Mobile Store in U.S. locations by the end of the year.

With the acquisition of Seattle based Speakeasy, Inc., Best Buy will be able to offer broadband and VOIP services to small businesses through their Best Buy for Business unit.

Demographics

Customer Centricity is the name of a business movement centered on catering to specific customer needs and behaviors. Best Buy's concept of customer centricity means configuring its stores to serve the needs of the particular customer segments that predominate in the area of that store. Some of the ways that the Best Buy company transforms its stores for a customer segmentation, is using different types of store signage, fixtures, lighting and even uniforms. One of the things the company has done for some segments is to create a personal shopping assistant, so that a customer can call and make an appointment for their shopping trip.

The company has created "lab stores" (separate from regular segmented stores) to test the area's acceptance to the theme and segment products and services. While the renovation of its stores is expensive, sometimes nearing $1 million per store, CEO & Vice Chairman Brad Anderson claims that stores that have already been transformed have doubled their growth rate versus stores that have yet to be transformed. In 2006, Best Buy continued to expand on the customer centricity operating model by opening or converting 233 U.S. Best Buy stores to the customer centricity operating model. During that same year, Best Buy operated 300 segmented stores, or 40% of the U.S. Best Buy stores.

Private label brands

As with most retailers, Best Buy owns some of the brands it sells. Best Buy currently has five private labels which include Insignia, Dynex, Init, Geek Squad, and Rocketfish. Insignia focuses on electronic equipment, including televisions, monitors, car stereos, home theater systems, and portable video and audio players. VPR Matrix (discontinued) focused on personal computers and accessories including desktops, notebooks and computer monitors. Dynex focuses on a wide variety of economically priced computer and entertainment accessories such as storage media, data and power cables, webcams, and office supplies, with recent forays into basic electronics such as tube televisions. Init focuses on storage products such as media storage, equipment bags, totes and furniture for home theaters. The Geek Squad brand can be found on the company's high end computer accessories and cables. Rocketfish focuses on high end cables primarily used with home theater installation and setup as well as on computer accessories. Rocketfish is promoted as a brand that focuses on consumer input to develop its products. Insignia TVs and electronics include parts made by Toshiba, Sylvania, Sharp, Sony, and LG.

Corporate sponsorships

Best Buy is the primary sponsor for NASCAR team Haas CNC Racing and their driver Jeremy Mayfield. The company started sponsoring Haas CNC Racing in 2005 as an associate sponsor with their driver Mike Bliss. In 2008, Best Buy will be the primary sponsor of the #19 Dodge Avenger driven by Elliott Sadler for a limited number of races. This car is owned by Gillett Evernham Motorsports.

Criticism & controversy

In 2000, two Florida consumers brought a lawsuit against Best Buy, alleging that the company engaged in fraudulent business practices related to the sale of extended warranties (or, more accurately, service plans). The suit claimed that Best Buy employees had misrepresented the manufacturer's warranty in order to sell the chain's own Product Service/Replacement Plan and that Best Buy had "entered into a corporate wide scheme to institute high-pressure sales techniques involving the extended warranties" and that the retailer used "artificial barriers to discourage consumers who purchased the 'complete extended warranties' from making legitimate claims." Best Buy ultimately settled for $200,000, but admitted no wrongdoing.

In the spring of 2007, Connecticut State Attorney General Richard Blumenthal ordered an investigation into Best Buy's use of an in-store website alleged to have misled customers on item sales prices. In December 2007, the Los Angeles Times reported on the same issue in which some customers claimed they thought they were surfing the internet version of bestbuy.com at a in-store kiosk only to learn that the site reflected in-store prices only. In response, Best Buy spokesperson Sue Busch indicated the in-store kiosks were not intended for price-match purposes and rather a means to navigate in-store availability. Since the initial investigation, a banner was placed on the in-store site to make its customers more aware of the difference.

In May 2005, the Wisconsin State Attorney General's office filed a civil action against Best Buy Company, Inc., over several alleged violations of Wisconsin consumer protection laws. Among the allegations: misleading representations to Wisconsin customers about rebates, service plans, supplemental magazine subscriptions, exchange policies, restocking fees, gift cards, and reward zone points.

Main article: Christmas controversy

During the approach to the 2006 holiday season, competitor Wal-Mart responding to pressure from conservative Christian groups, made a largely publicized decision to center their holiday marketing strategy around the term Christmas. In response, Dawn Bryant, a Best Buy spokeswoman, stated: "We are going to continue to use the term holiday because there are several holidays throughout that time period, and we certainly need to be respectful of all of them." The American Family Association criticized Bryant's statement and launched a campaign against Best Buy's policy. In reaction to the same policy, the Catholic League placed Best Buy on its 2006 Christmas Watch List. In 2007, Best Buy included the term "Christmas" in its marketing materials as well as greetings for Hanukkah and Kwanzaa.

In Popular Culture and Sports

• Best Buy is parodied in Date Movie, as "Best Bride".
• Best Buy is parodied in the 2007 NBC television series Chuck, appearing as the fictitious chain electronics store "Buy More".
• The store is parodied as "Shiny Stuff" in the Disney animated short How To Hook Up Your Home Theater.
• In 2006, a group of 80 employee look-alikes from ImprovEverywhere dressed in blue polo shirts and khaki pants caused confusion at the two-story Best Buy on 23rd Street in New York.
• Beginning in 2008, they will become the jersey sponsor for the Chicago Fire, in order to market their new store openings in Mexico
• Best Buy is a sponsor in the NASCAR Sprint Cup Series on the #19 Gillett Evernham Motorsports Dodge driven by Elliot Sadler

External links

• Official Website
• Best Buy Canada
• Best Buy for Business
• Future Shop (Canada)
• Geek Squad
• Magnolia Audio & Video