Chief Marketing Officer Barry Judge said that the company's marketing spending around the holidays is up, despite a challenged first half for the retailer and a mixed outlook for the consumer-electronics category. Best Buy has reported declining sales at U.S. stores open at least 14 months for five consecutive quarters. And it is projecting same-store sales for its fiscal year will be flat to down 3%. Still, Mr. Judge and Drew Panayiotou, senior VP-U.S. marketing, said things are looking up.
"I'm optimistic things are a bit stronger than they were [in the first half]," Mr. Judge said. "Best Buy is in the midst of transforming the products we sell. Increasingly we're selling more mobile phones and tablets and the connections that go with them. ... And those products are on fire."
"All signs point to a consumer coming back in the market," Mr. Panayiotou added. "We're all still nervous, but the first two weeks of data say she's there and buying more gifts."
And Best Buy plans to make sure she knows it's not just selling TVs and computers this holiday season, with tablets, e-readers and smartphones all appearing in new TV spots. In a coup for the retailer, it will also air a commercial that highlights all of the Apple products it carries -- a rarity in the closely monitored world of Apple marketing. Mr. Judge said Best Buy will also be emphasizing its value propositions -- price match, extended returns and free shipping with no exclusions -- as well as promoting its selection of gifts under $100. Best Buy spent $282 million on measured media last year, including $114 during the fourth quarter, according to Kantar Media.
The first holiday spots, which make Mom the star, roll out Sunday with the message, "Game On, Santa." And in a shift from years past, that creative message will dominate Best Buy's holiday messaging across all media. The retailer has typically run concurrent campaigns -- for example, last year it ran both "True Stories" and spots featuring Kenneth the Blue Elf, which led to a greater number of spots. This year there are five 30-second spots, down from 11, as well as two 15-second spots.
"When there's too much messaging, it waters down the power of the core creative idea," said Mr. Panayiotou. "That simplicity, that focus is very important. The landscape is getting very noisy. So, if our core creative idea is about making Mom feel victorious, we want to put all of our dollars behind that message."
The intent of "Game On, Santa" is to allow moms to revel in their role as "chief gift giver." Mr. Panayiotou said that his team's research found that Mom really wanted to feel like she was "winning" the holidays, though she didn't necessarily need to take credit publicly. The spots show women talking about various gadgets with Best Buy employees, before flash-forwarding to Christmas Eve, where Mom celebrates her purchases amid Santa's arrival and razzes the big guy.
It's a risky move. Kenneth the Blue Elf was a hit last holiday season, giving Best Buy the second-most popular holiday ad and fourth most-popular holiday campaign, according to Ace Metrix. Mr. Panayiotou said it was a tough decision to abandon something that had been successful, but he believes "Game On, Santa" will be more relevant to Mom. (Kenneth the Blue Elf will live on in a holiday campaign for Best Buy's Five Star chain in China.)
Mr. Panayiotou also admitted that toying with Santa on national TV is a "high-risk, high-reward" endeavor. "We knew it would win or lose, [based on] whether she was having fun with Santa or beating up on Santa. And we had to have a cool, strong Santa that was amused and entertained by what was going on," Mr. Panayiotou said. "So far, moms who have seen the spots in limited release say they're good with it, it's fun and it doesn't feel like we're trashing Santa."
This year's campaign is also reverting to a later start date, after Best Buy pushed up its holiday media blitz a year ago. Last year ads began airing on Nov. 1, but this year Best Buy opted to focus on digital efforts in the first weeks of November and hold off on airing TV ads until just days before Thanksgiving.
"We decided that being very loud and aggressive online was a place we could stand out," said Mr. Judge, noting that digital spending is up by 50% to 100%. "People start thinking about Christmas shopping in early November, but they're searching online and thinking, not necessarily buying."
Social media will also be a major focus, Mr. Judge said. A program launching in the coming weeks will ask Facebook fans to vote on the deal they like best. The one getting the most votes will be offered as a promotion the following week. A digital circular is also about to roll out. Unlike the PDF version, which has existed online to date, the new version is interactive and features editorial videos, as well as video highlighting the best deals of the week.