Best Buy 2014 Annual Report Download - page 2

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Hubert Joly
President and Chief Executive Officer
March 28, 2014
Dear Fellow Shareholders:
Our fiscal year 2014 was the first full year of our Renew Blue transformation, which we
launched in the fall of 2012. I am happy to report that our transformation is off to an
encouraging start as we have made significant progress on our key priorities. And, looking
ahead, we continue to be excited by our opportunities and the road map we have outlined
in pursuit of our long- term objectives. Let me elaborate on these two points.
Back in November 2012, we articulated our diagnosis of our situation, including our
company’s unique assets and the two problems we had to solve, i.e., declining comparable
store sales and shrinking profit margins. At the same time, we laid out the five pillars of our
Renew Blue business transformation:
(1) Reinvigorate and rejuvenate the customer experience
(2) Attract, grow, engage and inspire transformational leaders and employees
(3) Work with vendor partners to innovate and drive value
(4) Increase our Return on Invested Capital
(5) Continue our leadership role in positively impacting our world
So, what progress have we made in the first full year of Renew Blue?
(1) We enhanced how we serve our customers and built key foundational capabilities for the
future. For example:
We increased our Net Promoter Score by more than 300 basis points, meaning that
customers are more satisfied with their experience.
We significantly increased our price competitiveness and implemented a “low price
guarantee,” allowing us to embrace “showrooming.”
We implemented traffic-generating and customer experience initiatives that drove a
20% increase in Domestic online sales, proving our commitment to serving the
customer how, when, and where they want to be served.
We rolled out the “ship-from-store” capability to more than 1,400 locations, allowing
us to unlock retail inventory to better serve our online customers.
And we re-launched our loyalty program, resulting in higher customer participation
across channels.
(2) We made progress in strengthening our management team and improving employee
engagement, which, of course, is critical to our success.