ADVERTISING AGE: Describe the changes in marketing and strategy over the last few years at Best Buy?
MICHAEL LINTON: There is still a big need to be very good at the mass marketing vehicles, but we've had a major shift into one-to-one direct marketing and alternative media. Internet, theater advertising, one-to-one contact advertising and a big push on partnerships, such as McDonald's Monopoly game; the Rolling Stones and Elton John music tie-ins; our current campaign with the Black Eyed Peas-it's all new.
We are also building research and our [customer relationship marketing] capabilities to talk more directly with consumers because of what we see as a fragmenting market.
AA: How do you feel about network TV?
MR. LINTON: We still like TV as a key element of our marketing mix, but it is becoming more of a component that we try to synchronize with a lot of other media and marketing vehicles as opposed to the fundamental building block that it once was. We are concerned about the cost run-ups.
AA: How are you going to better target your customers as the mass market continues to fragment?
MR. LINTON: It once was "The digital world is here, and I want to come out and buy a laptop computer." Now, there is a customization of the digital marketplace to meet specific consumer needs.
AA: How do you prioritize marketing amid this shift?
MR. LINTON: One, we continue to build the Best Buy and Geek Squad brands to help different customers find their way in a sea of choices ... that's part of our "Thousands of possibilities" campaign. Second, we have to find direction with our marketing data ... We are a huge company with over 100,000 employees and more than 700 stores. That requires a much higher degree of cooperation and a sharing of data.
AA: Are you concerned about the possibility of more technology being sold directly to the consumer?
MR. LINTON: The marketplace is going to move as fast as it can in any direction, and we try to accept that about the marketplace and move with it.
MP3 players, DVD players, music over the Internet-these technologies are all fundamentally a threat to our business when looked at through one lens. Our choice is always to move forward and bring in new technology, regardless of what it does to our business.
AA: Can you define the Best Buy customer today vs. two years ago?
MR. LINTON: We once called them "technology entertainment enthusiasts," but we have broadened them and broke them into segments such as suburban moms. We are tailoring our formats and assortments at our stores for some of these segments based on the needs of local store areas.
AA: How is this playing out?
MR. LINTON: We tested it in California, but now we are rolling it out as fast as we can; by early next year, 300 stores will be converted. It's not all about marketing, but the real aim is the empowerment of our store and our people in the store to better customize solutions at the point of sale.
AA: How do you view the competition, especially as retailers like Wal-Mart, Costco and Target are beefing up their offerings in electronics and entertainment?
MR. LINTON: There are so many good players on so many levels in retail and in the digital space and those we admire outside retail. We think there are so many places we can get better and so many companies we can go to school on. One of our biggest fears is that we will not continue to innovate, so every year we will try to do several things that are ready, fire, aim.
AA: What were those this year?
MR. LINTON: Our theater advertising is an example-we have this thing called the golden minute right before the movie is on ... The Rolling Stones thing we just tried, and this year we had our first foray into Nascar.
AA: Is the pressure on marketing this year considering the softening in comparable-store sales growth?
MR. LINTON: There is always pressure and we like it ... One thing I like at Best Buy is the pressure isn't just on marketing. The more we've integrated with other functions, the better it is. We always feel pressure, but that actually starts with the relentless changes in the marketplace that keeps changing like crazy.