Biography of Bradbury H. Anderson

A lot has changed in 32 years. Anderson’s original employer has grown into Best Buy Co., the $25 billion-in-revenue market leader in consumer electronics retailing—with Anderson at the helm as CEO. He’s still a passionate music fan, however, and Best Buy still seems like it’s the place to be for listening. In October 2004, Anderson was one of a small group treated to an impromptu private performance— by Elton John, following a concert the rock star gave in Las Vegas.

Figure 1But Anderson’s biggest passion these days is serving Best Buy’s customers. In fact, the customer is at the heart of a new strategy, called “customer centricity,” which is the giant retailer’s $50 million gamble that it can maintain its market-leading position by providing more and better service and high-end products.

The stakes are high. Best Buy has an industry-leading 16 percent share of the $130 billion US consumer electronics and packaged media retailing market. But to stay competitive in this cutthroat business, the company must go toe-to-toe on price with Wal-Mart, which now has an 11 percent share of the market, up from slightly less than 7 percent in 1996.

Anderson says Best Buy plans to match Wal-Mart on price for products that both stores carry. Still, he realizes this is only part of a winning strategy. So the company has identified five target customer segments in which it hopes to build a loyal and profitable base by selling higher-margin products and offering services that are more relevant to the customer’s lifestyle and priorities. The five target segments—ranging from busy suburban moms to affluent professionals who want the best and latest electronic gear—were chosen because of their profit potential.

To better serve these customers, the company is making a huge investment in retraining its sales associates. The program is broad and deep—encompassing not only standard product training in an ever growing array of complex merchandise but, more important, training in financial analysis as well. For example, Best Buy sales associates in the 22 so-called lab stores with pilot customer centricity programs in place can calculate the return on invested capital for the store.

With such strong grounding in business, Anderson says, employees are now able to offer sound feedback to headquarters on what they think the business needs. In the past, they might have asked for more inventory or more staff without understanding the impact on the overall bottom line. He also feels comfortable giving employees more power to make critical decisions, such as what to sell and what to highlight in individual stores.