Best Buy's Anderson speaks out at CES 2000 - Brad Anderson; Consumer Electronics Show - Brief Article

Discount Store News, Feb 21, 2000 by Laura Heller

Occasionally, one gets the rare chance to see an industry through the eyes of a retail executive. At last month's Consumer Electronics Show (CES), DSN got just that when Brad Anderson, president and coo of Best Buy, toured the show and talked about what's new and interesting in the consumer electronics industry.

Somewhat in awe of the huge number of new products at CES 2000, Anderson pointed out some of his favorites including recordable DVD, the wireless PC and portable DVD players. "We see a fair amount of business moving eventually to this format," he said.

Smart appliances that connect to the Internet and have programming capabilities "are good news for us," Anderson said. Retailers of white goods were recently challenged when Home Depot announced it would begin selling appliances in roughly 95% of its stores by the end of this year. Although appliances make up only 7% of the chain's sales, the announcement was seen as a threat to both Best Buy and Circuit City. But the incorporation of advanced technology into these products puts CE retailers in a good position to capitalize on both technological expertise and sales of connected items and services.

"Home Depot will do well (in appliances)," said Anderson. "But if manufacturers move toward smart technology, we'll be in great shape."

At Sharp Electronics, Anderson pointed out a range of new flat panel monitors with color frame options to match different decors; some including built in TV tuners. The products can be mounted on bedside tables, exercise equipment or even under a kitchen cabinet where it can be folded down and slid out of sight. "[Flat panel screens] are moving into a real category as opposed to a structural oddity," he said. It's also where the Internet gets important, because it's difficult to offer a range of these products at [traditional] retail." He did, however, voice concern over the dueling formats of removable storage media that are emerging. Panasonic and Sony are both backing non-compatible memory cards and vendors are lining up on either side. "I wish there weren't two alternative suppliers," Anderson said. "The use of the product is tremendous, but the retail position is caught in the middle."

It was 20 years ago that Anderson first attended CES. The company, then called Sound and Music, was a $4 million business and in the red. "There was a front page story in the show daily saying, "Sound and Music goes out of business,"' recalls Anderson. "Everybody believed it."

Then ten years ago, when the chain's Concept 2 format was introduced with healthy results, "We expected to come out as a celebratory show," he said. "But Circuit City announced a new pricing strategy (to compete). They were four to five times the size of us and we were the only competitive threat in the marketplace." Vendors interpreted the statement as a threat to their profits and Best Buy was greeted on the first day of the show with hostility. "Suppliers were mad at us," said Anderson. "It was a celebratory show that went uncelebrated."

Not true today Best Buy has struggled through these ups and downs and today tops it's biggest competitor in sales and earnings. Said Anderson, "It's been an extremely theatrical experience going through these shows."