Ojai, Calif. - Brian Dunn, CEO of Best Buy, who has spent 25 years with the chain, reviewed his career and current events about his company at the Consumer Electronics Association (CEA) CEO Summit, here.
Dunn's comments came in a one-on-one interview with Gary Shapiro, president/CEO of CEA, last Friday.
Dunn said he started with Best Buy in 1985 as a sales associate based on a recommendation from his mother, who began working for the chain's precursor, Sound of Music, and eventually put together its co-op advertising department.
Dunn eventually became an assistant manager, which meant during the days of Best Buy's commissioned sales force, "I had to take a massive pay cut," but he was on his way to regional manager, district manager and eventually landing as CEO of the chain last June.
"I thought I was going to be smarter ... when I took this job," he said. "As CEO you want to have the intelligence and vision," but Dunn added it is also important for executives to "know what you don't know and ask, 'Explain that to me.' "
He said earlier in his career he was "quite change resistant," for example resisting Best Buy's move to a non-commissioned sales force. He explained, "I embrace change. Change breeds success ... and resistance makes companies monuments it itself. In other words, you're dead before you're sick."
On his career achievements Dunn noted, "We are proud what we have done ... and paranoid that it will be taken away in two weeks."
Last week's financial report was "tough" for Dunn since Best Buy did not perform as well as expected. "We do follow the economy, but we missed some clues" on how the market is changing.
He noted that the CE market is now one where "consumers come out for events, not just sales. They buy more for Dads and Grads, Mother's Day, Back to School ... and they come out for new technologies," one key example being smartphones.
"Our industry connects prices to services consumers crave and desire, connects to people and the things they love," Dunn noted.
What drove the market during the booming economy was "consumers taking home equity out for consumption. That open to buy is gone. Consumers are buying ... more for utility. So the sales highs are higher in some parts of the year, but there are deeper lows."
In discussing individual categories, Dunn said, "There is continuing pressure on shiny discs, music and movies, but CDs and DVDs are not going entirely away ... but they are under pressure."
He cited e-readers, the iPad and smartphones as strengths, along with the entire PC category. There continue to be "challenges" for Best Buy with major appliances, but "smart TV is going to be a great business for us."
What Dunn calls "smart TV" is IPTV functions and 3D TV where "you can show the consumer something exciting."
After his panel, when asked by TWICE why Best Buy has been pushing bundled products in recent weeks, he said, "It's great for us and you will see more of it across the board in coming months -- A/V smartphones, car -- across the board."
In a changing industry, Dunn commented, some of the chain's best competitors are its "most important vendors. Sony is an example, a great vendor that is also a fierce competitor."
Best Buy competes against its own suppliers with its in-house brands, but Dunn told the CEOs in attendance, "Great, strong brands that invest in R&D will become more relevant. They will always matter. We fill in with our brands."
Even as Best Buy was able to grow in Europe with its Carphone Warehouse investment and see growth in Europe and China, Dunn noted, "The No. 1 growth area for us is still the U.S. as we move into more digital" technologies.
Best Buy is still conscious about its consumer segmentation and continues to focus on women. He said, "We are [consumer] segmentation freaks" and have "scored well" in polls with women consumers.
When asked by Shapiro, "How do you win approval with women?" Dunn cracked, "That's the age-old question, isn't it?" with the audience laughing.
He then gave the serious answer: "Choice, choice, choice ... and no hard close and informed selling."
He added Best Buy has plenty of customer research showing the formula works, and it should be since women are "the No.1 growth area for us. Women now embrace technology. This used to be an industry based on the male consumers, but not anymore, and it is a statement about our society ... with technology as a badge, a statement about connecting."
Speaking of connecting, Dunn noted Best Buy's online sales is "growing nicely" online and that of the chain's brick-and-mortar customers, "54 percent visit our website before visiting our stores" and that more consumers pick up products at their stores after buying online than ever before.
And finally, when asked by Shapiro what the biggest mistake vendors make when visiting him and his management team, Dunn said, "I need, crave, open conversation. What's working, what isn't and what we can partner on, and what we can't. If you have problems, air it out. I appreciate it, even if our team doesn't. I think feedback is a gift."