Best Buy 2002 Annual Report Download - page 8

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We had a banner year
at Best Buy stores
Despite a national recession, our sales for the
fiscal year increased by 12 percent to $17.0
billion, driven by new stores and comparable
store sales gains of 1.9 percent. We boosted
our operating margin by 120 basis points
and increased our market share to 14 percent.
We maintained industry-leading inventory
turns at
7
.5 times. We continued to excel in
sales of digital products, which comprised
1
7
percent of sales last year, compared with
12 percent the prior year. In addition, our
e-commerce site ranked third in the country,
based on customer visits; nearly 40 percent of
customers shopping our stores said they had
visited us online prior to their purchase.
While our performance in the past year was
strong, it is by no means the end of the story.
Our goal is not only to be a leader, but to
define what leadership means in retailing. To
achieve that, we must continue to improve
and to grow.
Growing Organically
In the coming year, we plan to continue our
revenue growth by opening approximately
60 more stores, half of which will be in our
30,000-square-foot format and half in our
45,000-square-foot format. This year we plan
to enter five states and expand our metro-
politan New York presence, including our first
store in Manhattan.
We also have the opportunity to increase the
productivity of our existing stores. Our newest
store design, called Concept 5, facilitates
growth by showcasing the newest digital
technologies. It offers improved placement of
products to encourage the sale of services
and accessories along with each device. Its
flexible architecture allows us to adjust easily
the space we allocate to each product
category. The single-queue checkout and
convenience store reduce waiting time and
make it more fun. The transaction center lets
customers sit and have a relaxed discussion
during more complex purchases. In fiscal
2003 all our new stores will utilize this new
design, and we expect to remodel 10 stores
using this design as well.
In addition, we expect to boost store
productivity by enhancing our sales training,
building customer loyalty, improving our
supply chain management and more closely
synchronizing our e-commerce business with
our stores to give customers access to us
wherever, whenever and however they want it.
Extending our Leadership
into New Technologies
6Business Review: Best Buy