Video Hall of Fame 2009 Inductee: Outstanding Retailer Best Buy

“We feel that Best Buy is one of the only retailers that provides the complete solution for creative content,” he says. “We have a deep catalog across our business, which we think is unique and is best in class for both standard-definition and Blu-ray.”

“Their continued leadership and myriad contributions to our vibrant business over the years has helped drive both hardware and software manufacturers to aggressively promote next-gen formats such as Blu-ray to consumers via their stores,” says Lori MacPherson, general manager of Walt Disney Studios Home Entertainment, North America. “Their emphasis on employee trainings as well as in-store customer education and promotions make them unique.”

In recent years, the Minneapolis-based retailer has leveraged its Blu-ray selection in particular as a means of setting itself apart—a decision that has helped land the company at the top of the heap of retailers dealing in Blu-ray content.

Best Buy is bringing the format to consumers in a big way this holiday season, increasing the amount of entertainment retail space Blu-ray occupies by as much as 30%, up from 10% last year. A company spokeswoman adds that specific increases to the size of the Blu-ray section will be tiered based on customer and store size.

Long before Blu-ray, Best Buy was building itself into a destination for media shoppers through a combination of time-tested strategies and the development of innovative marketing programs.

Diane Sherwood, merchant director for movies at Best Buy, has been with the retailer since it introduced DVD players to customers. She says the company’s close relationship with studios was invaluable to its success with the product then, and that it is no less true today.

The launch of DVD “was a partnership with the studios to drive cross-merchandising, through merchandising in-store and promotional offers in the inserts,” Sherwood says. “We’ve stuck with some of those foundational principles that made DVD a success and created ease for the customer.”

Marshall Forster, Sony Pictures Home Entertainment senior executive VP of North America, credits Sony’s ongoing working relationship with the chain as instrumental to the supplier’s wins in video in the past.

“Best Buy has been a pioneer in packaged media and the primary destination for consumers to explore and purchase new technology,” Forster says. “SPHE’s success could not have been achieved without their support for the category, and we value the relationship we have built over the years.”

Best Buy has further enhanced its reputation as a one-stop provider of entertainment solutions by supplementing its sales with service. The retailer now provides support to customers by installing in homes or, in Homeister’s words, “wherever it’s most pleasing to you.”

“They have a true understanding of their core customer base of early adopters and have been innovative in how they market to them, especially with regard to new technology and home entertainment products,” says Ron Schwartz, executive VP and general manager of Lionsgate. “The way they champion the market and their ability to educate their consumers ensures that their importance will only increase in the future.”

Best Buy’s Reward Zone program has played an important part in the company’s ongoing work to improve the way it sells and markets to its customer base.

Introduced in 2004, membership in Reward Zone is now 30 million customers strong, with another 2.2 million shoppers belonging to the program’s Premier Silver extension. Through conversations with Reward Zone members both online and in person, the chain uncovers vital information about how to better serve its customers.

“I think Best Buy’s knowledge and use of deep customer insight in how we manage our business, how we merchandise our business and how we communicate with our customers sets our stores apart,” Homeister says.

Among the benefits enjoyed by Reward Zone members are exclusive shopping opportunities. A “best customer” event in November opened Best Buy stores after hours to program members. Also last month, Silver-level customers in 30 markets enjoyed an advance screening in theaters of Summit Entertainment’s latest film in the Twilight saga, New Moon.

“We feel [the Reward Zone program] is one of our core differentiators, and it goes back to having a very deep understanding of the customers—what they like, what they don’t like—and changing our business to reflect that,” Homeister says.

Looking ahead, Best Buy is positioning itself to continue serving its core customer wherever technology might take content.

“Best Buy has created an exceptional toy box for adults, overflowing with the latest gadgets, and a consistent understanding of the innovative technology that will revolutionize the way we live and play,” says Simon Swart, executive VP and general manager, North America, for 20th Century Fox Home Entertainment. “The future of the business rests in the capable hands of the blue shirts, and we can’t wait to see what they come up with next.”

What’s next for the chain of blue-attired employees is a partnership with technology provider Sonic Solutions to bring a Best Buy-branded video service into homes and onto laptops. Launching in the early part of next year, the service will allow customers to buy and rent from an extensive library of creative content. New titles are expected to be offered for viewing through the new service on the same day as their release for sale in Best Buy stores.

Homeister adds that Best Buy is looking at integrating the service, powered by Sonic’s Roxio CinemaNow technology, into its own devices—Insignia HDTVs, connected Blu-ray players and set-top boxes.

“I think we look at media as something that Best Buy is committed to and something that we continue to be excited to be an industry leader in,” he says. “And we’re going to continue to offer the best creative content in the world to our customers in the physical as well as the digital format.”