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CES 2012: Dunn Endorses Best Buy's Multichannel Strategy

1/12/2012 04:15:04 PM Eastern

LAS VEGAS - Best Buy's unique blend of stores, website,
mobile shopping and support services puts it in the catbird seat as electronics
devices become increasingly connected.

That was the message from Brian Dunn, CEO of the world's
largest CE retail chain, in a one-on-one interview conducted at International
CES by Gary Shapiro, president/CEO of the Consumer Electronics Association
(CEA).

"The business is changing," Dunn observed. "People are
coming in to buy a piece that interacts with what they already own." Best Buy's
role in an increasingly connected world is to provide the widest variety of
products from great manufacturers and help consumers link them with Geek
Squad's support.

"Choice is so utterly critical," he said of the company's product
and services assortment, and the stores provide a forum for consumers to "test-drive
products and see what's good for them. It's the best place to see them side by
side," assisted by what he described as "the most incredible sales force ever
assembled in the industry. It's a compelling combination."

Dunn said Best Buy's multichannel strategy is gaining
traction, as demonstrated by "unprecedented demand" on its website, and monthly
triple-digit comp-store growth through its mobile commerce channel.

"We need to be where the customer is and make good bets on
where they're going," he said, although no one channel is a panacea. "Online is
very important, but it's not sufficient alone, and bricks alone are not
sufficient. We need to be wherever the customer needs us to be."

To that end, Dunn rejected the oft-repeated notion that the
chain's 1,100 U.S. big-box stores are an "anchor" around its neck, and
described its installed base of stores as "a huge advantage. It's hard to
greenfield stores in this environment."

The wide-ranging discussion, which included playful jabs between
interviewer and interviewee, also touched on the merchant's top product picks
at the show. Dunn acknowledged a TV bias, having begun his career at Best Buy
26 years ago as a television salesman, and noted, "I love what's happening in
big-screen TV. They're big, bright and look terrific."

Dunn also endorsed the Ultrabook category, which combined
with the coming Windows 8 update, will give the PC business a needed boost, and
provided some words of advice to new exhibitors.

"I love being able to see some of the smaller exhibitors,"
he said. "We meet with the big guys all the time. The challenge [for them] is
it can very difficult to break through. They need to be tenacious, but we are
avid listeners," and he tells his team to "send me a note if you find something
interesting."

Dunn added that the company will soon announce new overseas
partnerships with offshore retailers as part of its go-forward international
strategy. Like its relationship with Britain's Carphone Warehouse, the new
alliances will allow Best Buy to leverage its partners' established local
strengths and brands, which are more familiar than its own franchise and contributed
to the closure of Best Buy-branded stores in China and in the United Kingdom
last month.

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