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Best Buy Analyst Day 2011Shari Ballard
, Executive Vice President, Enterprise
Agenda
Evolving Our Store
Portfolio
Online Platform for
Growth
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Best Buys Multi Channel Advantage
Customers are increasingly using a combination of digital & physicalchannels to urchase technolo roducts and services
Best Buy has the best and broadest capabilities across multiplechannels to service our customers
Confidential Do Not Disseminate or Copy
Best Buy Dot.com Physical Stores In-Home Service m.dot 1-888-BESTBUY
Best Buy Customers Are Shopping With a Multi Channel Approach
~60% of instore purchasers researched on bestbuy.com
~40% of what's purchased on line is picked up instore
BBY Domestic online revenue tripled in the last 5 years (25% CAGR)BBY Domestic online revenue $2B in FY11
F06 F07 F08 F09 F10 F11Domestic dotcom revenue
Source: BBY internal data
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Best Buys Online and Total Traffic Are Growing
1.4B Total Best Buy Traffic
800M
Stores Traffic
Online Traffic(Dotcom and m.dot)
FY11FY05 FY10FY09FY08FY07FY06
SOURCE: Internal Best Buy data
No free shipping No promotions, discounts or other rewards
Price related
Customer Preferences Support Multi Channel Growth
REASONS CITED FOR NONCONVERSION (Q4 2010)
Did not offer item sought Available in store only Not available for store pickup Not available for shipping to my location
Want to see in person Want immediately Shipping/delivery takes too long
Navigation /
Convenience
Assortment / selection related
19 %
21 %
Hard to navigate website Checkout process too complicated Not ready to buy/browsing Needed more information
Other
usability
21 %
8%
Q11. Which of the following, if any, are reasons why you did not purchase category at BestBuy.com? All reasons.SOURCE: ComScore
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Traditional ecommerceA wide assortment of product & services on BestBuy.com
Expanding Our Online Business Model for Aggressive Growth
Cross Channel Experiences
Marketplace Allow external vendors and retailers to sell
throu h our channels
Combine unique strengths of each channel (online, stores, phone, home) to maximize the customer experience
Partnerships
Ad Models
Extend our reach by allowing partners to market
Best Buy
products
&
Services
Leverage Best Buys traffic to sell advertising
Expanding ECommerce and Multi Channel Capabilities
Expanded online only assortment Sharpen price and price impression Kiosks and product finders in stores Online returns and exchanges in store
Online local store inventory checks Store pickup Friends & family pickup Ship to store
Mobile commerce Mobile apps Twelpforce
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Launching New Business Models to Accelerate Growth
Marketplace
An open marketplace for retailers and manufacturers to expand product assortment
Partnerships Affiliate partners who want to provide access
to Best Buy products and services as a benefit to their own customers
Ad modelsMonetizing traffic through ad revenue
(Best Buy On, Google Ad Sense)
Grow BBY.Com throu h ex anded assortment and
Best Buys
Online
Channel
Growth
Goals
Multi Channel Approach
sharpened pricing
Increase frequency of customer interactions with our
brand through
partnerships,
ad
models
and
Improved convenience for customers with physical and digital options: store pick up plus, mobile commerce and apps
marketplace
Double Best Buys Online Revenue in 35 Years
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Evolving Our Store Portfolio
Online Platform for
Growth
The U.S.
Store
Portfolio
9231023
1069 1099 ~1106
357 419
481548
608668
742822
~325
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
5 9 3874
14 19 34 35 35 35
BBY Stores Best Buy Mobile SAS Pacific Sales SAS
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Domestic Big Box: Square Footage
45.4 4618%
Square Footage Growth and Average Store Size
38.540
42
44
8%
10%
12%
14%
16%
S t o r e
S i z e
( 0 0 0 )
o o
t a g e
G r o w
t h
Average Size Sq Ft Growth
34
36
0%
2%
4%
F00 F01 F02 F03 F04 F05 F06 F07 F08 F09 F10 F11 F12
A v e r a g e
S q u a r e
Evolving Our Store Portfolio
Small Box Big Box
Add New Value Propositions
Develop Connected Store Op ModelBBY Mobile
PAC SAS
Improve Low Revenue Op ModelExpress Kiosks
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Connected Store Pilot Drives Op Model Evolution
Employee Experience Customer Experience Store Environment
Provide our blue shirts an Demonstrate the possibility of Design new store prototype mprove ac rop an operating model to showcase our employees talents and drive
a differentiated customer shopping experience
ec no ogy roug n erac ve displays, knowledgeable employees and connecting the
digital and physical shopping experience
creating an open and flexible environment that allows us to
adapt to technology and customer needs
Connecting the Digital & Physical Shopping Experience
New 32 touch screen kiosks an
interactive experience
InStore Pickup Plus
Dedicated Phone Operators 20+ applications are available for customers and employees
BestBuy.com is the number one used application
Revamped Services Precinct
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Connected Store
Update
Employee Experience Customer Experience Store Environment
Engaging Experience Reengineered operating model
Establishing Career
Sales
A Market Place of Choice Runway & Technology Stages
Prominence of
BBYM
,Tablets,
Increased Productivity Reduced Size Increased Flexibility
positions Advanced training, tools &
processes
Gaming Dedicated MutliChannel Dept.
Greener
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New Value Proposition Additions
Best Buy MobileBest Buy Mobile
Trade in & Pre owned Gaming
Tablet Central
Trade in and Pre owned Gaming
Pacific Sales SWASPacific Sales SWAS
Improve Low
Revenue
Operating
Model
Lower revenue stores with lower than average 4wall profitability
oo cause s an opera ng mo e es gne or g er sales velocity
Targeting SG&A reduction and margin rate enhancements through:
e ca e ea ers p eam Revised labor model and operating procedures Tailored assortment and promotional plans
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Reduce Total
Square
Footage
of
U.S.
Big
Box Stores by ~10% over 35 Years:
Best Buys Store Portfolio Goals
xpec e o resu n o re uce annual occupancy costs
Sublease opportunities Relocation to smaller locations Renegotiate lower square foot costs
Increasing Points Of Presence While Reducing Overall Square Footage
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