This afternoon at the Consumer Electronics Show in Las Vegas, Best Buy CEO Brian Dunn got the chance to talk about the state of his company and the recent spate of reports declaring the beginning of the end for the nation’s largest chain of electronics stores.
“You have to be thin-skinned,” Dunn said about the negative stories and comments he hears about the company and himself. But he called the feedback “a gift. It’s a gift you don’t always care to open but it’s a gift.”
As for his company’s position in the marketplace, Dunn said that Best Buy “stands for choice” and that he believes the store offers more variety than his bricks and mortar competitors, especially the bigger big box all-under-one-roof retailers who have to be more selective about the electronics products they offer up for sale.
“We think of ourselves as a showroom for our vendors,” he explained, adding that the other side of that is that he is now competing with many of those same manufacturers, like Apple and HP, who both have built successful businesses dealing directly to consumers.
To combat that, Dunn says that more customers are looking to Best Buy as the place to add onto or trick out the items they might buy elsewhere. “Customers are coming in to buy things that interact with things they already own,” he explains.
As for this past holiday season’s PR debacle, in which Best Buy had to cancel several orders only days before Christmas because they received a bigger than expected response to its seasonal sales, Dunn said there is a “silver lining” in that it means that online shoppers are beginning to see Best Buy as an e-commerce option and not just a place to window shop before going the e-commerce route elsewhere.
He claims that BestBuy.com now has around a 12% share of the consumer electronics online market in the U.S., when you don’t include media sales (DVDs and such).
On the topic of online shopping, Dunn said that when it comes to sites like Amazon that don’t collect sales tax in states where they are not legally required to, the CEO said, “I believe there needs to be a level playing field… there will be a level playing field, and when that happens, things become very, very interesting.”
Beyond the impact on his own business of those sales taxes that Amazon isn’t collecting (and which most people aren’t paying, even though they’re supposed to), Dunn said, “It’s a jobs issue,” and not just the jobs at Best Buy but the jobs like teachers, police officers and firefighters that rely on taxes.
He shrugged off reports that called Best Buy’s bricks and mortar stores anchors around the company’s neck, instead calling them a “huge advantage,” as they allow the company to continue to cater to customers who want to see the product before they buy.
That being said, Dunn reiterated that the chain will continue to see an overall shrinking in the square footage of its retail locations, though he did say there are a few stores where demand is so high it will require expansion. He sees one big chance for retail growth in the company’s smaller-footprint Best Buy Mobile stores.
On the current trends in electronics, he said that, along with the lack of content available for 3D TVs, the fight between active- and passive-shutter glasses technology has really slowed consumer adoption of the sets.
Regardless, Dunn assured the mass of manufacturers in the room, “We will be there to support it.”
And now that the NFL playoffs are in full swing, Dunn said he’s noticed the biggest Super Bowl TV sales bumps come when one of the teams in the showdown haven’t been there in a while. And since his Minnesota Vikings aren’t in the running, he’s rooting for whichever teams haven’t been in the Super Bowl for the longest period of time.