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Best Buy sells consumer electronics and a variety of related merchandise, including software, video games, music, mobile phones, digital cameras, car stereos and video cameras, in addition to home appliances (washing machines, dryers, and refrigerators), in a non-commissioned sales environment. The Company continued to expand throughout the 1970s and assumed its current name in 1983. Many of Best Buy’s products are available to customers on a self-service basis through its online sales channels in the US, Canada, and Mexico, as well as through its mobile apps.It aims to provide high-quality customer service, products at reasonable prices and knowledgeable technical support to its customer base of general consumers.
- Sound of Music (1966–1983)
- Best Buy Co. Superstores (1983–1984)
- Best Buy Superstores (1984–1989)
- S&P 500 Component
- August 22, 1966; 53 years ago in St. Paul, Minnesota, United States
- Richard M. Schulze
- 7601 Penn Avenue S, Richfield, Minnesota, U.S.
- 997(FY FEB 2, 2019)
- Puerto Rico
- United States
- Hubert Joly
- (Executive Chairman)
- Corie Barry
- Mike Mohan
- (President and COO)
- Consumer electronics, appliances
Get everything Best Buy has to offer – wherever, whenever. Find stores, find deals, find reviews, find the lowest prices on the hottest tech.
The Best Buy app lets you:
- Browse our massive product catalog
- Locate any of our 1,400+ stores
- View My Best Buy points and redeem certificates
- Check order status and view past purchases
- Create a wish list or wedding registry
- Shop the weekly ad, Deal of the Day and featured offers
- Search in-store clearance and open-box items by store
- Check gift card balances
- Check phone upgrade eligibility
- Find trade-in values for your old electronics
Best Buy organizes its operations into two reportable business segments:
- Domestic, which comprises the Company’s operations across all states, districts and territories of the US, under its various brand names, such as Best Buy, bestbuy.com, Best Buy Mobile, Best Buy Direct, Best Buy Express, Geek Squad, Magnolia Home Theater, and Pacific Kitchen and Home
- International, comprising all of the Company’s operations in Canada and Mexico under the brand names Best Buy, bestbuy.com.ca, bestbuy.com.mx, Best Buy Express, Best Buy Mobile, and Geek Squad.
The story of an (almost) disrupted business
In 2012, Best Buy was going through hard times. As its revenues slew down and its margins tightened, the executives’ team was struggling to understand what was happening with their business.
Traditional approaches and business tools didn’t help in understanding what was going wrong. Yet the business was in danger. For an organization that as of 2012, was making over fifty billion dollars in revenue, but at the same time had seen its operating income tighten, from a whopping $2.37 billion in 2011 to just over a billion in 2012; understanding what was happening was a matter of life or death.
Business model of Best Buy
Best Buy provides a range of technology products, services and solutions to a broad range of customers. The Company is directly customer-facing, serving general consumers primarily through its network of retail outlets. In the mid-2000s Best Buy began organizing its retail operations to targets five principal consumer segments:
Small business customer who has specific needs related to growing sales and increasing the profitability of his or her business.
- Affluent professionals who are looking for the best technology and entertainment products, and demands excellent service;
- Family men who are looking for technology that will improve their lives and that will last;
- Busy suburban mothers; and
- Young consumers who are active early-adopters.
Best Buy exclusively serves customers across North America. Its largest market by far is the US, with Canada and Mexico serving as secondary markets.
Best Buy provides value to its customers in the following ways:
- The quality of its customer service, with the Company providing personal assistance to customers through its knowledgeable in-house sales staff;
- Its competitive pricing and discount deals, with the Company offering products at reasonable prices, as well as offering deals and discounts, including weekly and daily deals;
- Its broad sales reach across North America, with the Company operating a network of 1,200 large-format and 400 small-format stores, principally in the US, as well as in Mexico and Canada;
- Its technical support offerings, with the Company providing expert, in-person technical assistance to its customers through its Geek Squad agents and service centres; and
- Its accessible digital channels, with the Company operating online and mobile channels that enable customers to purchase products and services on the move.
Best Buy generates revenue through the sale of various technology and electronic products through its physical retail stores and online channels, as well as the provision of technical support services. The Company’s revenue is derived from sales across the following product categories:
- Consumer Electronics, including home theatre, home automation, digital imaging, health and fitness, and portable audio products;
- Computing and Mobile Phones, including computing and peripherals, networking, tablets, mobile phones, wearables, and e-readers;
- Entertainment, including gaming hardware and software, movies, music, and other software;
- Appliances, including large appliances such as refrigerators, dishwashers, and ovens, and small appliances such as, coffee makers and blenders;
- Services, including consultation, design, delivery, installation, set-up, protection plans, repair, technical support and educational classes; and
- Other, including snacks, beverages and other sundry items.
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Best Buy collaborates with a range of partners across its two operating segments. These partners include:
- Supplier and Vendor Partners, comprising suppliers of goods, services, and tools which support the Company’s operations and provide outsourcing services;
- Affiliate and Marketing Partners, comprising a range of websites and companies that earn commissions for generating sales and traffic for Best Buy’s online and mobile channels;
- Developer Partners, with the Company making its API available so that developers can integrate third-party services into Best Buy functionality;
- Non-Profit and Community Partners, comprising a range of charitable organisations and programs with which the Company collaborates on projects; and
- Strategic and Alliance Partners, comprising a range of companies with which the Company shares resources and collaborates on joint venture projects.
Best Buy has recently launched a number of partnerships, including a deal with Macy’s, which has agreed to open small-scale Best Buy sections within its own stores, and a partnership with Eero, with which it has non-exclusive retail agreement to sell Eero-branded Wi-Fi products in its stores.
Best Buy operates a corporate website at www.corporate.bestbuy.com, through which it provides information on its various products, services, and locations. The Company also operates an online sales channel at www.bestbuy.com, as well as through its Mexican and Canadian sites www.bestbuy.com.ca and www.bestbuy.com.mx, through which customers are able to make purchases, arrange deliveries, and manage accounts. Best Buy online merchandise sales are typically either picked up at Best Buy stores or delivered directly to customers from a distribution centre or retail store. The Company also operates a mobile channel through its iOS and android apps, which offers much of the same functionality.
The majority of Best Buy’s sales are made directly through its sales and customer service staff located at the Company’s physical retail stores. Best Buy operates approximately 1,200 large-format and 400 small-format retail outlets across the US, Canada, and Mexico. The Company also provides direct services through its in-house technical Geek Squad staff, who are located in-store and at specialist service centers.
Redefine How Best Buy Makes Money
To face and thrive when new consumers’ phenomena had shown up, like show rooming, Best Buy had to redefine the way it made money, and its business model.
We continue to partner with our vendors (i.e., the world’s foremost technology companies) to help them commercialize their technology. Over the last seven years, our vendors have invested with us to improve the customer experience through stores within-stores and other unique vendor experiences. We ended fiscal 2019 with more than 5,000 of these experiences across our U.S. stores.
This is what Best Buy called “vendor experiences.” Or agreements with the company’s vendors to offer stores within Best Buy that could showcase their products:
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