History

• 1966 - Richard M. Schulze and business partner James Wheeler open Sound of Music, an audio specialty store, in Saint Paul, Minnesota
• 1967 – Sound of Music acquires Kencraft Hi-Fi Company and Bergo Company. Second and third Sound of Music stores are opened near the University of Minnesota and in downtown Minneapolis. The Sound of Music ends its first year with gross sales of $173,000(USD)
• 1969 – Sound of Music stock first traded as publicly-held company; company enacts first employee stock option plan; three stores opened in the Twin Cities area
• 1970 – Sound of Music hits the $1 million mark in annual revenues
• 1979 – Sound of Music becomes the first suppliers of video and laserdisc equipment including Panasonic, Magnavox, Sony and Sharp
• 1981 – A tornado hits the Roseville, Minnesota store on June 14. Sound of Music responds with a "Tornado Sale," and it becomes an annual event
• 1983 – Sound of Music’s board of directors approves a new corporate name: Best Buy Co., Inc.; Best Buy opens its 800th store in Chicago, Illinois.
• 2007 - On January 26, 2007, the first Best Buy in China had its grand opening - touted as the largest Best Buy in existence. In March, Best Buy announced plans to purchase Seattle, WA based Speakeasy, Inc., a broadband and VOIP services provider. Best Buy becomes the first major retailer to exit the analog television market, carrying only digital products that will be mandatory in February 2009 by the FCC.

2008 – Best Buy announces the opening of its first pilot stores in Mexico and Turkey. Best Buy decides to promote Blu-ray over HD DVD, a move which ultimately contributed to Toshiba's Corps. decision to drop HD-DVD. In May it agreed to buy a 50% holding in UK-based mobile phone operation Carphone Warehouse's retail division, Best Buy also announced that it'll open branded superstores in the UK and other European countries.

Business model

Best Buy sells consumer electronics as well as a wide variety of related merchandise such as computers, computer software, Video games, music, DVDs, mobile phones, digital, car stereos and video cameras, as well as home appliances (washing machines, dryers, and refrigerators), in a non-commissioned sales environment. Each store also includes a department for A/V equipment for automobiles, offering on-site installation services, as well as a Geek Squad "precinct" for computer repair and warranty service and accidental service plans.
   Best Buy prides itself on the fact that their sales people are not on commission. This however isn't entirely true of supervisors, managers and district employees. Managers and supervisors make bonuses based on store performance metrics such as revenue, margin, and net operating profit.
   Best Buy doesn't allow expensive gifts from vendors to be given to employees (SPIFFS, etc), nor does it allow employees to collect tips or gifts from customers of any type.
   Best Buy building exteriors are usually light brown in color with the entrance in an area designed to look like a blue box emerging from the rest of the structure. Older stores have a more utilitarian brick building without the blue structure.
   In April 2005, the company was the first major retailer to announce the elimination of all mail-in rebates.
   As of May 10, 2008, the company operates 942 Best Buy Stores, 13 Magnolia Audio Video Stores (specializing in high-end electronics), 7 stand-alone Geek Squad stores, 3 AudioVisions Stores, and 17 Pacific Sales Stores (in Southern California), all through its U.S. retail subsidiary. They also operate 51 Best Buy and 128 Future Shop stores throughout Canada. In 2003, the company opened its first international global procurement office in Shanghai, and also operates sourcing offices in Beijing and Shenzhen, primarily to reduce costs and increase the speed to market by purchasing products directly from manufacturers. As of 2007, Best Buy operates one "branded" store in Shanghai, as well as 151 Five Star Appliance Stores in China.
   Best Buy also operates numerous Best Buy Mobile stores within the U.S. as a joint venture with The Carphone Warehouse, using its successful UK business model; 7 of these are stand-alone locations (primarily in Manhattan). Best Buy Mobile locations offer customers a wider variety of cell phones than their other locations, some of which are "unlocked" phones that can be used on any GSM network. Best Buy Mobile also offers services comparable to those from carrier stores, including but not limited to a number transfer machine, warranty service on any phone, loaner phones, and the most popular carriers. Most current Best Buy Mobile stores are located in or near the Northeast region of the U.S., though the company is expanding such that most or all U.S. locations will include Best Buy Mobile services by the end of 2008.
With the acquisition of Seattle based Speakeasy, Inc., Best Buy will be able to offer broadband and VOIP services to small businesses through their Best Buy for Business unit.
   The domain bestbuy.com attracted at least 159 million visitors annually by 2008 according to a Compete.com survey.

Demographics

Customer Centricity is the name of a business movement centered on catering to specific customer needs and behaviors. VPR Matrix (discontinued) focused on personal computers and accessories including desktops, notebooks and computer monitors. Dynex focuses on a wide variety of economically priced computer and entertainment accessories such as storage media, data and power cables, webcams, and office supplies, with recent forays into electronics such as high definition LCD televisions. Init focuses on storage products such as media storage, equipment bags, totes and furniture for home theaters. The Geek Squad brand can be found on the company's high end computer accessories and cables. Rocketfish focuses on high end cables primarily used with home theater installation and setup as well as on computer accessories. Rocketfish is promoted as a brand that focuses on consumer input to develop its products. Insignia TVs and electronics include parts made by Toshiba, Sylvania, Sharp, Sony, and LG.

Corporate sponsorships

Best Buy was the primary sponsor for NASCAR team Haas CNC Racing and their driver Jeremy Mayfield. The company started sponsoring Haas CNC Racing in 2005 as an associate sponsor with their driver Mike Bliss, later moving to driver Jeff Green. As of 2008, Best Buy will be the primary sponsor of the #19 Dodge Avenger driven by Elliott Sadler. This car is owned by Gillett Evernham Motorsports.

Criticism and controversy

In 2000, two Florida consumers brought a lawsuit against Best Buy, alleging that the company engaged in fraudulent business practices related to the sale of extended warranties (or, more accurately, service plans). The suit claimed that Best Buy employees had misrepresented the manufacturer's warranty in order to sell the chain's own Product Service/Replacement Plan and that Best Buy had "entered into a corporate wide scheme to institute high-pressure sales techniques involving the extended warranties" and that the retailer used "artificial barriers to discourage consumers who purchased the 'complete extended warranties' from making legitimate claims." Best Buy ultimately settled for $200,000, but admitted no wrongdoing.
   In the spring of 2007, Connecticut State Attorney General Richard Blumenthal ordered an investigation into Best Buy's use of an in-store website alleged to have misled customers on item sales prices. In December 2007, the Los Angeles Times reported on the same issue in which some customers claimed they thought they were surfing the internet version of bestbuy.com at a in-store kiosk only to learn that the site reflected in-store prices only. In response, Best Buy spokesperson Sue Busch indicated the in-store kiosks were not intended for price-match purposes and rather a means to navigate in-store availability. Since the initial investigation, a banner was placed on the in-store site to make its customers more aware of the difference.
   In May 2005, the Wisconsin State Attorney General's office filed a civil action against Best Buy Company, Inc., over several alleged violations of Wisconsin consumer protection laws. Among the allegations: misleading representations to Wisconsin customers about rebates, service plans, supplemental magazine subscriptions, exchange policies, restocking fees, gift cards, and reward zone points.
   During the approach to the 2006 holiday season, competitor Wal-Mart responding to pressure from conservative Christian groups, made a largely publicized decision to center their holiday marketing strategy around the term Christmas. In response, Dawn Bryant, a Best Buy spokeswoman, stated: "We are going to continue to use the term holiday because there are several holidays throughout that time period, and we certainly need to be respectful of all of them." The American Family Association criticized Bryant's statement and launched a campaign against Best Buy's policy. In reaction to the same policy, the Catholic League placed Best Buy on its 2006 Christmas Watch List. In 2007, Best Buy included the term "Christmas" in its marketing materials as well as greetings for Hanukkah and Kwanzaa.
   In April 2008, the FCC fined Best Buy $280,000 for not alerting customers that the analog TVs they sold wouldn't receive over-the-air stations after the digital transition on February 17, 2009. Best Buy is challenging this ruling by the FCC saying it was and is in compliance with current FCC regulations pertaining to the digital transition.

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