Susan WilkinsSusan WilkinsDirector, Customer Marketing & StrategyDirector, Customer Marketing & Strategy

Best BuyBest Buy

Inside Best Buy:Inside Best Buy:Reshaping RetailReshaping Retail

Best Buy enterprise

BBY U.S.Best Buy Stores872 Stores

Magnolia Audio Video13 Stores; 300+ In-Store

Geek Squad7 Stores; 872 Precincts

Best Buy Mobile46 stores/store within store

BBY U.S.Best Buy Stores872 Stores

Magnolia Audio Video13 Stores; 300+ In-Store

Geek Squad7 Stores; 872 Precincts

Best Buy Mobile46 stores/store within store

InternationalBest Buy Canada/FutureShop48 Stores/125 Stores

Geek Squad49 Precincts

BBY Asia Offices3 Locations: Beijing, Shanghai, Shenzhen

China Stores1 Store

Five Star (China)

136 Stores in 34 Provinces

InternationalBest Buy Canada/FutureShop48 Stores/125 Stores

Geek Squad49 Precincts

BBY Asia Offices3 Locations: Beijing, Shanghai, Shenzhen

China Stores1 Store

Five Star (China)

136 Stores in 34 Provinces

Other ConceptsOther Concepts

A Look Back at the Brand’s Evolution

• Product & Price Late 90’s

• Connected Products

• Customer Solutions

• Customized Solutions Now

Relationships Future

Understanding our customers from different angles

Age + Income + Location

Upscale suburban - Middle America - Urban Trend Setters

Who are the most passionate?

Enthusiasts – Early Adopters – Brand Loyalists

What products they can’t live without?

Need vs Want products – “Anchor” categories

What is the REAL need?

Escape – Connect with Family & Friends – Organize My Life

What gets them into the market?

Trigger events – LifeStages – Purchase Paths

How do they want to shop?

Like It or Hate It – Face to Face or Online – Service or DIY – Price

Sensitive Customer

Data

• Uniquely Objective/ Broad perspective on T&E.

• Knowledge of how things are going to work just beyond consumer’s view.

• Re-assurance in a stressful category.

• Optimistic outlook/ Future focused.

• Integrates manufacturer’s visions on macro level.

• Integrates/personalizes on micro level.

Trusted PerspectiveTrusted Perspective

• Aspirational Badge for customers.

• Leader

• Personal, individual: Centricity Manifested

• Modern, cool, leading edge aesthetic.

• Expands into a variety of product/service categories as long as it supports an aspirational lifestyle.

Inspired Lives Inspired Lives For

Brand Value Proposition

1. Connections: We > MeUnderstanding and knowledge - leveraging the collective wisdom of 150,000 to inspire, coach and mentor

• Ex. Certified, trained and available associates within arms reach

4. Radical Support: With You All The WayYou know with certainty you are never alone

and we’d never steer you wrong• ex. Exclusive online access to information, live phone & online support, dedicated representative assigned to you

Trusted PerspectiveFor Those Pursuing Their Life Passions

3. Inspired ExperiencesBest Buy is THE destination for the technology-enabled experiences that customers crave - if it is worth having / desirable you better believe Best Buy has it!

• ex. Exclusive latest and greatest products and experiences not available anywhere else

2. Stimulating ShoppingWe’re in the business of “retailtainment” - we want consumers to come and play - touch, feel, ask, try, etc.

• ex. “Look into the Future” display area that displays product not yet ready for market

Best Buy Brand Value Proposition

Entering the China Market

Entering the China Market

Top 10 Needs What does it mean? ScoreOverall

GapGome Gap

Yolo Gap

Pacific Gap

Buy Now Gap

Trust High reputation, Authentic products, Same price 96%

After SalesHigh reputation, Expert advice, Store manages

repairs, Replacement product, Easy refund93%

Speedy delivery On time, Choose delivery time, Same day delivery 89%

Cleanliness Clean, Not crowded, Bright lighting 85%

Test DetailDetailed product description, Test products,

Impartial Staff77%

Technical Staff Professional staff, Technical instruction by staff 75%

Practical Need Purchase to fulfil a practical need 72%

Wide Range Wide range of categories and brands 72%

Convenient Easy Transport, Near to my house 66%

Up to date Up to date with fashion 60%

After Sales service and Speedy Delivery are fundamental requirements for all CE customers and yet our competitors have not achieved these successfully.

What Chinese customers are saying …

What are we going to be famous for?

FUN EXPERT

EASY

Segmentation Strategy in Shanghai

Drifters

Household Income (RMB/Month)

3000 4000 5000 6000 7000 8000 9000 10000

Ag

e

20

25

30

35

40

45

50

E-Generation target

Young Families

OpportunityEasy Life Target

Aspirers

ContentedOlder Families

Sweet Spot

Four distinct clusters of customer needs

Performance Assured

28%

No Frills

29%

Glamour

26%

Bang for Buck

17%

Basic Store

Staff Appearance

Service and Surroundings

Easy

Most up to date products

Status and Quality

Status and Quality

Service and Surroundings

Impactful Design

Price and Promotions

Trust

Speedy Delivery

Low Price

After Sales Service

Status and Quality

Trust

Wide Range

Up to date Products

Stable Environment

After Sales service

Service and Surroundings

Home Shopping

Reliability

Price & Promotions

After Sales

Trust

Technical Staff

Test with Detailed Explanation

Orderly and Helpful

Customisation

Impactful Design

Status and Quality

Import

ant

Unim

port

an

t

What we have learned so far…

• Our customer promises will be built around three unmet needs, i.e. after sales, speedy delivery and test detail

• The customer promises will be communicated through three banners: easy, expert and fun

• We have identified Easy Life and E-Generation to be our target segments

• We will be unique at serving these two segments by fulfilling their needs for Glamour and Performance Assured

Current Tactics: Financial Services

• Partnering with HSBC/Bank of Communications to provide a general purpose credit card for Best Buy– no interest/no fees installment plans on BBY in-store purchases– reward points redeemable for catalog merchandise– Free gifts for applying and activation

• Different customer dynamics require a different program than the US– Relatively new credit industry– Traditional value to save for purchases rather than use credit– Education on credit products is required to help consumers

understand the benefits

• Growth Plans– Government regulation on bank ownership and approved

programs play a large role in determining what is possible– Co-branded BBY credit and debit cards

In-store Kiosk for Financial Services

Current Tactics: Loyalty Strategy

• Preferred Customer program for customers who have attained a high threshold of spending– Access to special services, events and personalized assistance

for VIP customers

• Different customer dynamics require a different program than the US– Personalized treatment is expected– General all-inclusive loyalty programs are not as developed or

expected in the China market at this time.

• Plans for growth– Create a tiered loyalty program with spending/frequency

thresholds and increasing personalized and exclusive benefits– Increase percentage of marketing spend we allocate to building

and retaining loyalty

In closing

• Understanding our customers has been a journey in the US

• Customer centricity is a foundation for global expansion– Early success in China– Future global expansion

• Mexico• Turkey

Thank you