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.[1] The company's subsidiaries include Geek Squad, Magnolia Audio Video, and, in Canada, Future Shop. Together these operate over 1150 stores in the United States, Canada and China.[2] 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 over 1800 stores worldwide, including 1400 Best Buy stores in the U.S. alone.
Best Buy was named "Company of the Year" by Forbes magazine in 2004,[3] "Specialty Retailer of the Decade" by Discount Store News in 2001,[4] ranked in the Top 10 of "America's Most Generous Corporations" by Forbes magazine,[5] and made Fortune Magazine's List of Most Admired Companies in 2006.[6]
] 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.
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 familiar yellow tag.
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.
2001 -- Best Buy acquires the Canada-based electronics-chain Future Shop Ltd. and 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.[[1]]
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).[7][8] Best Buy opens its 800th store in Chicago, Illinois.
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.[9] The company continues to explore new markets, including current construction of a store in San Juan, Puerto Rico, and test stores in Mexico and Turkey.
Customer Centricity is the name of a business movement centered on catering to specific customer needs and behaviors.[1] 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 segment, 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.[1]
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.
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 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 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. [10]
As of July 27, 2007, the company operates 863 Best Buy Stores, 19 Magnolia Audio Video Stores (specializing in high-end electronics), 7 stand-alone Geek Squad stores, 3 AudioVisions Stores, and 14 Pacific Sales Stores (in Southern California), all through its U.S. retail subsidiary. They also operate 48 Best Buy and 122 Future Shop stores throughout Canada.[11] 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 131 Five Star Appliance Stores in China.
Best Buy also operates 9 Best Buy Mobile stores within the U.S. (5 free-standing, 4 in-store). Best Buy Mobile locations offer customers a wider variety of cell phones than its other locations, most of which are "non-branded" phones that can be used on any network. Most of the Best Buy Mobile stores are located in or around Manhattan, New York, but the company plans to expand these locations by about 180-200 within the next 18 months.
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.[12]
Demographics
Customer Centricity is the name of a business movement centered on catering to specific customer needs and behaviors.[1] 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 segment, 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.[1]
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.
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