Best Buy 2016 Annual Report Download - page 6

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For example, in our appliances business, we look to extend our 21- quarter growth streak
in this category. To that end, we plan to build 27 more Pacific Kitchen & Home stores-
within-a-store, bringing our total to 203 at year-end. We also expect to see growth from
the work we have done to improve our delivery and installation services, both of which
are key to the increases we have seen in customer satisfaction.
One of the emerging categories in which we see an opportunity to create and foster a
wave of innovation and consumer enthusiasm is the “Connected Home.” In this category,
we are increasing our assortment in several areas, including home security, lighting and
video monitoring, and using our leading position in routers and networking equipment,
which form the backbone of the Connected Home, as a way of gaining customer interest
and trust.
Regarding our online business, we are prioritizing the customer shopping experience on
smartphone and tablet devices, two consumer shopping channels where we are seeing
material growth. Our Seattle Technology Development Center, which opened last year,
has focused on this part of our customer experience. A recent, well-received example of
their work is “BlueAssist,” an in-app feature allowing customers to simply shake their
device to get live help with products and orders through chat, call and e-mail.
Finally, we are continuing to invest in the talent, proficiency and performance of our
front-line employees.
Our second priority for FY17 is to reduce cost and create efficiencies throughout the
business. Reducing costs is essential for us to be able to fund our investments, build
resilience to product cycles and, ultimately, increase our profitability over time.
One example of this cost reduction and efficiency work is our project to reduce the
number of open-box appliances we take back into our stores. This effort has the potential
to improve the customer experience by changing the way we sell so that fewer customers
are compelled to return their appliance purchases. It also can create material savings
through fewer price markdowns, reduced transportation costs and the better use of labor
in our stores and distribution centers.
Broadly said, we aspire to deliver world-class operational performance, defined in terms
of quality, service and cost. This focus has to be — and is becoming — a way of life,
especially given our margin structure and product cycles.
These savings will allow us to invest in our future. Such investments include additional
costs to ensure we have the most expert sales and services associates; a continued effort
to make certain our services pricing remains competitive; and initiatives in the key growth
areas. We are determined to invest to grow and equally determined to fund our
investments by finding and exploiting areas of cost reduction and efficiency.