Best Buy 2007 Annual Report Download - page 4

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FY 06FY 05FY 04 FY 07FY 06FY 05
76
71
72
2006
2005
2004
Source: www.TheACSI.org (1-100 scale)
30%
Home Office
18%
Entertainment
Software
7%
Appliances
45%
Consumer
Electronics
02
|
with local customers and business models in this fast-
growing part of the world. Our intention in China
is not only to grow the Five Star brand, but also to
leverage the talents of its local leaders as we expand
upon our first Best Buy store, which opened in
Shanghai in December.
+ The addition of nearly 200 Magnolia Home Theater
locations inside U.S. Best Buy stores.
When we acquired Magnolia Audio Video five
years ago, we marveled at the award-winning
customer experience and management team, yet
struggled to increase customer traffic. By placing
smaller Magnolia locations within our U.S. Best Buy
stores, we leveraged Best Buy’s customer traffic to
educate consumers about the latest offerings and
premium brands along with custom installation. This
approach resonated with consumers and catapulted
Best Buy to No.1 among high-end consumer elec-
tronics retailers in the country.
+ The launch of Geek Squad®City. This centralized
location for computer repairs, installations and other
related services helps shorten customer wait times
while boosting the productivity and skills of our
services employees.
+ The formation of a strategic relationship with The
Carphone Warehouse. We are working jointly with
Europe’s premier retailer of wireless phones. Our
interest stemmed from admiration of their customer
service model, paired with a point of view about
the importance of mobile solutions for customers.
We hope that our relationship with CPW will add to
our skill sets in helping consumers buy and use wire-
less phones. This relationship also plays a role in our
plan to globalize our services business, which has
been popular with many different customer segments.
We recently began offering Geek Squad services in
the United Kingdom through CPW locations and via
the Internet.
+ Shareholder performance. We delivered 21-percent
earnings growth and returned nearly $800 million to
our shareholders through repurchases of our common
stock and an increased dividend, while investing
$25 million in our communities.
Our charitable gifts and volunteerism are supported
by company donations and The Best Buy Children’s
Foundation. We also published our first corporate
responsibility report last year, which is available online.
Bringing our talent to customers
As we review fiscal 2007, we see that investments
we’ve made in the past are providing strong returns.
We believe we are getting better at unleashing human
talent and bringing it to the consumer and are excited
about how much momentum we have gained.
We are comfortable tapping talent inside our
organization and talent outside it, if another
company has capabilities we
need for serving customers.
Customer satisfaction
(calendar year data)
We improved our score in the ACSI by 5 points to a
score of 76. Customers say that the interactions with
our employees have improved.
Product revenue mix
Consumer electronics grew to 45 percent of fiscal
2007 revenue, up from 43 percent in fiscal 2006.
The increase was driven by strength in flat-panel
TVs, home theater installation and MP3 players.