Best Buy CEO: Connectivity, 3D Hot With Consumers25 Mar, 2010 By: Erik Gruenwedel
Best Buy Co. continues to expand consumer awareness of connected devices by testing so-called “center-of-the-store” initiatives that showcase the ability to receive movies and music into the home through the Internet.
During a March 25 conference call with analysts to discuss fourth-quarter (ended Feb. 27) results, CEO Brian Dunn said connectivity has become “non-negotiable” for millions of people and that increasing numbers of consumer electronics no longer fall under the category of discretionary purchases.
Indeed, strong sales in laptop computers, mobile phones and flat-panel TVs, including Web-enabled units, helped the Minneapolis-based No. 1 CE retailer post net income of $779 million, up nearly 37% from net income of $570 million during the previous year period.
Revenue for the quarter increased 12% to $16.5 billion, compared with $14.7 billion last year.
“As IPTV becomes the norm, it creates an opportunity for us to create a much broader ray of experiences for people on their TVs, and that’s a very good space for us,” Dunn said.
Best Buy continues to test “center of the store” initiatives at locations in Canada, the United Kingdom and domestically underscoring consumption of movie and music downloads, satellite and broadband access via the TV, PC, Blu-ray Disc player and mobile phone.
Mike Vitelli, president, Americas, and enterprise EVP, said the initiative, including the planned rollout of a digital content store by the second quarter, would help a service such as CinemaNow movie downloads become less “invisible” to retail consumers.
“We’re going to make them see it and want it and then we can deliver it,” Vitelli said.
He said initial feedback from the introduction of 3D-enabled televisions has been positive.
Best Buy this week began marketing nationwide a 3D-enabled Samsung HDTV (UN55C7000 for $2969.99) and Internet-enabled Blu-ray player (BD-C6900 for $399.99).
The Blu-ray player also features Netflix movie streams and Pandora music downloads with separate subscriptions.
With every purchase, Best Buy offers a free 3D starter kit, which includes two battery-operated 3D glasses and Monsters vs. Aliens, the first commercially available 3D Blu-ray movie from DreamWorks Animation.
Best Buy earlier this month sold its first 3D TV and Blu-ray player when Panasonic rolled out its nationwide 3D consumer retail tour.
“As the momentum builds, and the quantities of [3D TV] units sold increases that will bring some confidence and excitement into the content production community (i.e. studios),” Vitalli said.
Dunn said consumer curiosity for 3D at the store level “screams” to him the notion that innovation is not dead in TV.
“The appetite for 3D home experience and the ‘holly grail’ of this magnificent home entertainment experience continues to evolve,” Dunn said.