Retailer View: Best Buy Date: 18-Jun-2010 Instructor: Prof. Rajesh Srivastava Presented as part of EPGP 2009-10 Retail Management Course Presented by Group I Mandeepak Singh Tarandeep Singh Rajendra Inani Saravanan Logu & Vivek Edlebadkar
Retailer Profile Retailer Type: Specialty retailer (Electronics Retailer) Target Market: TBD Products Sells consumer electronics Home appliances (washing machines, dryers, and refrigerators) A/V for Automobiles Department Services Computer repair and warranty service and accidental service plans (Geek Squad ) Onsite installation of auto A/V parts Highlights Sales people are not on commission. Policy of Results Only Work Environment Policy of No expensive gifts from vendors / customers to employees
Location & Site Best Buy building exteriors Usually light brown in color The entrance look like a blue box emerging from the rest of the structure Older stores have a more utilitarian brick building without the blue structure. 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.
Geek Squad® Agents and Installers are ready to take the hassle out of your technology woes. They have the know-how and skill to set up, install or repair your computer, network, home theater solution and car audio, video and navigation systems, no matter where you bought your gear.
Best Buy: The Every-Day-Is-Saturday Model Philosophy: We’re all adults here. Work is not a place you go, it’s something you do, so there’s no reason for the company to dictate when and where employees work. Managers look solely at results produced, not hours spent at a desk or in meetings. Org Hierarchy: Traditional. Some things don’t need to change.
Store Design House Colors: Blue, Yellow Logo: Yellow Tag Signature Façade Ample parking Easy access from Highways Convenient Store Hours (Extended store hours on Weekends and Holiday period)
Store Layout Store Layout: Mix and Match of Loop, Free Form and Grid No Clutter Wide aisles Danglers End Caps Proper Lighting Experience Zones (HD TV, High-end speakers & Games)
Store Layout for Geek Squad Use of brand specific colors
Vending Machines & In-store Kiosks Best Buy Express:
Merchandising Management Best Buy's switch to vendor-managed inventory is not moving as quickly or aggressively as planned It aimed to close its warehouse and have shelf-ready product shipped directly to stores, with vendors assisting in inventory management Independent labels are still not able to provide that though big brands are ready for it
Merchandising Management Best Buy International Deploys Predictix Merchandise Financial Planning and Item Planning software Key benefits of the Predictix planning applications include: Merchandise Financial Planning: Item Planning: Complete visibility to top-down plans allows a more precise Open to Buy; It also provides the ability to plan purchase order quantity and auto-execute to Best Buy’s SAP enterprise application with no re-keying. Consistent Planning Processes: Predictix is a disciplined, end-to-end planning process.
Pricing Strategy Pricing for Purpose Every product on shelf in Best Buy falls under certain segment for pricing. Each segment is priced for a purpose. For example core category such as flat-screen televisions is priced to maximize total revenue; Where as items that are designed to drive traffic into the store, such as DVD players, are priced more aggressively in order to drive unit sales
Pricing Strategy Match the Price This is to drive out competition in times of online purchase where consumer forums and sites gives a user instant lowest prices for a product Best Buy tries to match the lowest price offered by any retailer on an exactly same product The online price of Best Buy.com at times is lower than store prices. On store they would match the price provided the item is in stock at that particular store.
Pricing Strategy Fees on return goods Best Buy has began enforcing a restocking fee of 15% of the purchase price on returned merchandise. And to discourage customers who return items with the intention of repurchasing them at an "open-box" discount, it is experimenting with reselling returned items online.
Communication Mix Best Buy ensures that all of the components of its communication mix are aligned and conveying the same message in the same way to its customers and target audience. Best Buy Express a new way to communicate
Notable Perks: Trust. No one judges where you are or how you’re getting your work done.
Evaluations: Customer driven. Along with your manager, the customer is in the best position to know how well you’re delivering results.
Career Development: Merit-based promotions. In a results-only environment, schmoozing the boss won’t get you anywhere.
Work-Life Balance: Unlimited paid vacation. If you get your work done, what you do with the rest of your time is up to you.Where It Works: Best for offices rather than retail or manufacturing floors.
Receive the same perks as the Reward Zone program membership, plus...
Earn 2 points per $1 spent on qualifying purchases at all U.S. Best Buy stores and at BestBuy.com.
Earn 1 point per $2 spent on purchases outside of Best Buy, plus bonus category purchases in dining and groceries at 1 point per $1 spent*.
Supply Chain Audit & Rating of factories and 3rd party manufacturers Electronics Industry Citizenship Coalition (EICC) Global social compliance program (GSCP) Supplier diversity (Women & Minority supplier) Goods Not For Resale program Ethisphere names Best Buy to 2010 list of “World’s Most Ethical Companies”
Multi-Channel Retailing E-Tailing Bestbuy.com,Magnoliaav.com,GeekSquad.com etc, Mobile View Promotion, Play Games & Purchase International expansion Europe, China, Japan, Mexico & UK (recently) Outlet cenetr Other brand stores (Magnolia, AudioVision,…) Special B2B sites Best buy for business Best buy for education & Best buy for business
Other areas Best Buy Remix Forum that provides tools and interfaces for developers who use the products that are sold at BBY Co-creation IDEAX-a forum, where customers can share their ideas for Best Buy Facebook Twelpforce Strategic partnership with leading manufacturers Panasonic (exclusive launch of 3D HD TV in BBY’s New York Store) Sony Canon