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Dunn Reflects On Best Buy, CE At Summit

OJAI, CALIF. — Brian Dunn, CEO
of Best Buy, 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-onone
interview with Gary Shapiro, president/
CEO of CEA, held in June.

Dunn began by discussing his 25-
year career at Best Buy, which started
in 1985, and what he has learned on a
trip that took him from sales associate
to regional manager, to district manager
and to 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
to 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.”

The most recent 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.”

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” are
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 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 are “growing nicely”
online. 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.”

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