Technology has changed a lot over the past half century, and so has Best Buy.
Fifty years ago today, Dick Schulze opened a small store called Sound of Music in St. Paul, Minnesota, that sold stereos, speakers, vinyl records and other products related to music. Little did he know that it would become Best Buy, a nearly $40 billion company that now sells everything from TVs and laptops to drones and virtual-reality headsets.
As we celebrate Best Buy’s 50th anniversary, we sat down with founder and Chairman Emeritus Dick Schulze and current Chairman and CEO Hubert Joly to talk about how we got to where we are today and get a glimpse into where we’re going next.
Dick Schulze, Celebrating Our Past
When did you know it was going to be something big? That this was going to be a national concept?
Schulze: It actually happened in 1983, when we opened the first Best Buy store in Burnsville, Minnesota. The first year’s volume was $28 million, which was more revenue than the entire Sound of Music chain was generating. At that point, we knew the strategy we were building would work, and we immediately wanted to convert the rest of the Sound of Music stores into these Best Buy superstores.
About five years later, we introduced our “Concept II” store into the marketplace, which was really the seminal decision to put the customer in control of the process [by expanding product offerings and eliminating commissioned sales]. That was the springboard. There was no turning back at that point. We couldn’t open these stores fast enough.
What are some of the key characteristics of our company’s DNA that have driven our success?
Schulze: One of the key learnings I had from the very beginning was that it’s required that we stay focused on our customer. We need to do whatever is in the customer’s best interests, and we need to do it better than anyone else does, every day, all the time. We’re still pursuing that strategy and maintaining that focus. Stay focused on the customer, and you’ll always win.
The second-most-important characteristic for me, and one of the big items in my playbook, really has to do with empowering employees. When I started the business, I relied on my own knowledge and experience, but I soon realized that employees, when empowered to do so, added dimensions to what we were trying to accomplish that went far beyond my own comprehension.
As you look back, what are you most proud of?
Schulze: For me, these 50 years have really been an adrenaline trip.
When I talk with customers from around the country, and they find out who I am, they are quick to tell me about their most recent experience and how much they appreciate what we do and the way we do it. I get a tremendous amount of satisfaction knowing that, 50 years later, we still stand apart in terms of how we value our customers and how we serve them.
Hubert Joly, Shaping Our Future
What does the 50th anniversary mean to you and to us as a company?
Joly: Of course, it is the celebration and recognition of our past, because there are many reasons for us to be proud of our past. But, even more importantly, it’s also a celebration of our future. It’s about how to create a future that is respectful of our past but that propels us forward. It’s almost as much about celebrating the next 50 years as celebrating the last 50 years.
What will the Best Buy of the future look like, and how will that differ from today?
Joly: It’s all rooted in the evolution of technology and the customer needs around that. What technology can do is increasingly exciting, but there’s a gap between what technology can do and what customers understand it can do. And, because everything is now connected and complicated, it’s hard for customers to know what to choose and how to make it all work together. That’s very different from what it was five or 10 years ago, when you had a PC, a printer, a big CRT TV and a stereo system, all connected to the wall for electricity. Now, you have smart TVs, streaming music and online gaming. You have connectivity throughout the house. It’s incredibly complicated, so that provides a huge opportunity for us.
We want to make it easy for customers to learn about and enjoy technology, and to be a trusted adviser and solution provider for customers around their technology needs in pursuit of their passions. We touch people’s lives. I’m not selling you a TV, I’m working with you to make sure your family is entertained. I’m not selling you a thermostat, I’m helping you save the planet and save money.
When you think about Best Buy’s future, what gets you the most excited?
Joly: I think it’s going to be the journey. It’s the ability to work with what I think is an amazing group of people throughout Best Buy. The teams we have in the stores, in the distribution centers, in technology, in the merchant groups — in all of the various functions — are some of the most talented individuals in our industry. The destination is exciting, but I think the journey is going to be even more exciting because we have this opportunity to work together to build an amazing future that does not yet exist.