Full Speed Ahead at Best Buy
With an aggressive customer service strategy — including the Geek Squad — under new CEO Brian Dunn, the retailer is seizing market share.
Ramona Rosales
Brian Dunn should be exhausted. Upon completing a 10-day trip to Asia last fall to brainstorm with suppliers and tour Chinese stores, the Best Buy Co. Inc. (BBY) CEO says, he came back to a series of intense annual leadership meetings at the company’s Richfield, Minn., headquarters. But on a rainy afternoon just before the kickoff of the holiday season, Dunn is pumped up. “We talked a lot in the leadership meeting this morning about where we were a year ago and where we are today,” says the 24-year Best Buy veteran, who was named to the company’s top post last June. “In fall 2008, it was very much about preparing for the terrible economic storm that we saw coming. A year later, we find ourselves racing toward a new future.”
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Dunn, 49, a six-foot-two, steely, gray-haired and mustachioed wellspring of energy, says not to misunderstand. “Retailing is a noble endeavor. But I don’t think Best Buy is a retailer anymore,” he says. “Think of us as a solutions company that offers consumers the latest and greatest technology, with a service capability that the Geek Squad represents. Our job is to show our customers the art of what’s possible with digital technology. We help them ride the rails of this new, connected world in real time.”
The evolution of Best Buy, No. 66 on the Fortune 500 list, is taking place globally, the company says. Its international strategy spans Europe — especially through its joint venture with British-based The Carphone Warehouse — and China, where the company says its first five big-box stores opened in Shanghai last year, joining the 131 Jiangsu Five Star Appliance Co. Ltd. stores in which Best Buy took a majority stake in 2006. The digital-solutions approach is also spilling over to the company’s other retailing brands, including Audiovisions (which installs electronics systems in U.S. homes and businesses), Future Shop (121 consumer electronics stores in Canada), Magnolia Audio Video (high-end, stand-alone stores on the West Coast and home-theater boutiques in 300 Best Buy stores), Napster (the online music-subscription service that Best Buy bought in 2008), Pacific Sales Kitchen and Bath Centers Inc. (a Southern California retailer of appliances, fixtures, faucets and home entertainment products) and Speakeasy (an IT service provider that specializes in small businesses). Perhaps its most visible example of a solutions provider is the Geek Squad, the computer-support service acquired in 2002 that the company says now has “precincts” in all Best Buy stores.
Dunn says the inspiration for Best Buy’s evolution came from its suppliers, who realize consumers are often overwhelmed by choices and undereducated in what fast-moving technology can do for them. Although many vendors make a variety of products, Dunn says, most are vertical manufacturers: None offer the full range of technology — from flat-screen televisions to notebook computers to smartphones to digital cameras — that can work together to create a consumer experience. “Our vendor partners told us, ‘We need you to light up the connected world for customers. We need you to help them understand what they can really do with our products,’ ” Dunn says. Pointing to Best Buy’s typical display of nearly 100 smartphones from “all the major carriers,” he asks, “where but at a Best Buy can you see the capabilities of these phones side by side? Where else can someone walk you through what’s best for what you want to do?”
