Best Buy 2015 Annual Report Download - page 4

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3
makes in-store inventory available to online shoppers. Our online sales
have grown from approximately 7.0% of our Domestic revenue in FY13 to
9.8% in FY15.
We have also engineered a resurgence of our store channel. In the past two
years, we have significantly upgraded our stores with the addition of 83
Pacific Kitchen and Home, and 39 Magnolia Design Center stores-within-a-
store and the rollout of several vendor experiences in partnership with
some of the world’s foremost tech companies including Canon, Google,
Intel, Microsoft, Nikon, Samsung and Sony, in addition to Apple, which has
had a presence in our stores for a number of years. In parallel, we increased
the amount of customer-facing labor in our stores and the level of training
our associates receive.
2. We have taken steps to have a highly engaged, fully mobilized and highly
skilled set of teams across the organization. In the field, we have simplified
the organization to ensure greater role clarity and accountability, removed
many obstacles and pain points for our employees and increased the
emphasis on their development. We have also recruited some great talent
in the functions that are key to our transformation, such as E-commerce,
Digital Marketing and Supply Chain.
3. We have been deliberate about developing more strategic partnerships with
our key vendors, entering into these vendor partnerships when they make
sense for the customer, the vendor and you, our shareholders.
Our vendors spend billions of dollars developing amazing new technology
products. There is typically a growing gap between what these products
can do and what customers may be aware of, or understand. The successful
commercialization of these products increasingly requires the customer to
be able to touch, feel and experience them in real life. Often, a customer
needs a physical experience and must use their senses to make a
purchasing decision (think about buying a pair of headphones or buying a
new TV).
The experience of the last two years highlights the fact that Best Buy offers a
unique, and meaningful nationwide physical platform that is of value to its
vendors and its customers.
4. We have improved our financial performance. We have been able to deliver
increased earnings as a result of a better topline and more than $1
billion in Renew Blue annualized cost reductions. We improved our bottom
line despite substantial investments in making Best Buy more price
competitive, improving the customer experience in our stores and online.