Best Buy 2014 Annual Report Download - page 10

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5
Merchandise selection, pricing and promotions, procurement and supply chain, marketing and advertising, and labor
deployment across all channels are centrally controlled at our corporate headquarters. In addition, support capabilities (e.g.,
human resources, finance and real estate management) are generally performed at our corporate headquarters. We also have
field operations that support the store managers and retail store employees. Our retail stores have procedures for inventory
management, transaction processing, customer relations, store administration, product sales and services, staff training and
merchandise display that are largely standardized within each store brand. All stores within each store brand generally operate
under standard procedures with a degree of flexibility for store management to address certain local market characteristics.
International Segment
Our International President is responsible for all areas of our International segment. Leaders of our International businesses
report directly to the International President.
Our Canada store operations are similar to those in our Domestic segment, with centrally controlled advertising, merchandise
purchasing and pricing, and inventory policies. In addition, corporate management performs support capabilities. Similar to our
U.S. Best Buy stores, all Canada stores use a standardized operating system that includes procedures for inventory
management, transaction processing, customer relations, store administration, staff training and merchandise display. The retail
operations include two principal store brands. Future Shop stores have predominantly commissioned sales associates, whereas
employees in Best Buy branded stores in Canada, like employees in U.S. Best Buy stores, are noncommissioned.
Our Five Star stores primarily utilize vendor employees and full-time sales associates to sell our products. Corporate retail
management generally controls advertising, merchandise purchasing and pricing, and inventory policies, although management
for individual regions within our Five Star brand may vary these operations to adapt to local customer needs.
Our stores in Mexico employ an operating model similar to that used in our U.S. Best Buy stores.
Merchandise and Services
Domestic Segment
Our online channel and U.S. retail stores have offerings in six revenue categories: Consumer Electronics, Computing and
Mobile Phones, Entertainment, Appliances, Services and Other. Consumer Electronics consists primarily of television and
home theater; digital cameras and camcorders; DVD and Blu-ray players; portable electronics such as MP3 devices,
headphones and speakers, car stereo, navigation and satellite radio; and all related accessories. The Computing and Mobile
Phones revenue category includes notebook and desktop computers, tablets and e-Readers, mobile phones and related
subscription service commissions, and all related accessories. The Entertainment revenue category includes video gaming
hardware and software, DVDs, Blu-rays, CDs, digital downloads and computer software. The Appliances revenue category
includes both large and small appliances and kitchen and bath fixtures, including faucets, sinks, toilets and bathtubs. The
Services revenue category consists primarily of extended warranty service contracts, technical support, product repair, delivery
and installation. The Other revenue category includes non-core offerings such as snacks and beverages. The merchandise and
service offerings vary across our stand-alone store portfolio, with U.S. Best Buy Mobile, Magnolia Audio Video and Pacific
Sales stores offering a more focused assortment.
International Segment
In Canada, the Future Shop and Best Buy branded stores have offerings in Consumer Electronics, Computing and Mobile
Phones, Entertainment, Services and Other, and at Future Shop only, Appliances. Although Future Shop and Best Buy branded
stores in Canada offer similar products, there are differences in brands and depth of selection. Further, Geek Squad services are
only available in the Best Buy branded stores, with Future Shop's service offerings branded as Connect Pro.
In China, our Five Star stores have offerings in four revenue categories: Appliances, Consumer Electronics, Computing and
Mobile Phones and Services. The products and services in these revenue categories are similar to those of our Domestic
segment.
Our stores in Mexico have offerings in six revenue categories: Consumer Electronics, Computing and Mobile Phones,
Entertainment, Appliances, Services and Other, with products and services similar to those of our Domestic segment.