There’s one Best Buy department making more noise than Audio these days.

The marketing department.

Since breaking into mainstream promotions in fall 2000 by heralding its entry into the New York City market with a free Central Park concert starring Sting, Best Buy has been sounding off regularly. The consumer-electronics chain is now operating under a new marketing blueprint, a branding model built around annual “drive periods” tuned up with targeted promotions, strategic alliances, and both in-store and out-of-store execution. “The Sting campaign was the beginning of us saying, ‘Big brands do big things that get noticed in big ways,’” says Michael Linton, the chain’s senior vp-strategic marketing.

Sting’s a tough act to follow, but Best Buy’s 92-person corporate-level Strategic Marketing Group — formed in 1998 to “build brand, create loyalty, and connect consumer marketing in a way that makes sense,” says Linton — has pulled it off by staying focused and making everything fun. The result has been a branding tractor beam used to attract, and retain, one of the most sought-after demographics: young, tech-savvy shoppers with money to burn.

“This is a target consumer that often doesn’t watch TV spots or read circulars,” says Linton. “Until recently, promotion was underleveraged. But we now know we need it to reach this crowd.”

In addition to this “Young Fun” core customer, Eden Prairie, MN-based Best Buy also targets consumers classified either as “Digital Home” (married couples with kids), “Technojocks” (active single males gaga for sports and music), or “Traditional Entertainment” (casual users).

Marketing a technology and entertainment brand that sells everything from cordless phones to Tom Jones CDs isn’t easy — especially when many shoppers still don’t even know what “DVD” stands for. The message needs to be consistent, relevant, and not too heavy handed while expressing the diverse inventory that exists under the Best Buy banner. What about rebates, the consumer electronics industry’s (over) tried-and-true tactic? Not in this store.

“A consumer goods marketing model doesn’t work for us,” says Linton. “We have a signal brand that represents a lot of things to different people. We need to create programs that represent all that.”

The 475-store retailer’s marketing machine is churning out a growing number of programs to set it apart from competitors. The first in 2001 was a spring-through-fall mobile tour — the chain’s first — called Fun Zone. Riding under a “Technotainment” theme, a tricked-out truck provided an opportunity for consumers not only to interact with technology but to learn how to incorporate it into their lives.

The Zone swung by baseball stadiums in several markets, tourist venues (such as the Santa Monica Pier), and such special events as the New York City Marathon. At some events, as many as 5,000 people checked out the truck each day. Eden Prairie-based Storeworks designed the Zone. St. Louis-based Momentum executed the tour.

A stylish home area, which showed off how technology is invading daily life, included refrigerators with built-in Web browsers and high-definition home theaters. A gaming area with videogame “pods” (space-age chairs) let users battle each other in head-to-head games. A digital music area boasted the latest MP3 players and PDAs. “We started researching an RV, and before I knew it this thing was a 53-foot truck,” says Debbie Estes, Best Buy’s director of promotions and events.

An in-store Go Mobile overlay timed around the truck’s launch handed out instant-win gamecards carrying codes shoppers entered online to see if they’d won one of 1,000 prizes. More than 150,000 codes were entered online.

Next came a fall back-to-school campaign — another first, and now one of the “drive periods” — for college students starring singer Moby and backed by Riverwoods, IL-based Discover Card. On Aug. 14th, shoppers showing school IDs scored gift bags stuffed with branded coffee tumblers, compilation CDs (featuring Moby and other artists), popcorn, batteries, and MSN Internet access offers. Customers who charged purchases with Discover cards were entered to win one of four $25,000 scholarships. About 500,000 entries came in over the course of the program.

The effort was just part of the activation package Best Buy put together as a co-sponsor of Moby’s summer/fall tour. Media and in-store P-O-P supported, as did an online sweepstakes dangling three “teched out” living spaces and a Ford Focus. (Some 57 percent of entries opted in to receive more information about the chain.) Market-specific sweeps in other markets ran in conjunction with the tour’s presenting sponsor, Santa Clara, CA-based Intel, and dangled meet-and-greets with the singer. “We’re looking to pull every lever,” says Estes. “Every campaign has been bigger than the one before.”

Ads, in-store radio spots, and hundreds of thousands of direct-mail pieces sent to young members of the retailer’s database supported. A cause-related component had consumers bringing old electronics into stores for recycling efforts (Moby aided the effort by filming a public service announcement).

Merry Christmas, Baby
That brings us to the holiday 2001 grand finale, a two-part program staged to generate traffic and purchases.

The first part kicked off last month, when Best Buy was the only retailer selling U2’s Elevation 2001 DVD for an exclusive two-week period after the Irish rockers ended their North American tour Nov. 19. The first 500 people in each store on Saturday, Nov. 24 received free CD samplers containing unreleased songs. Ads on VH1 supported.

The same day the samplers were being delivered, Best Buy threw the switch on its primary initiative, a premium incentive offer starring pop sensation N’Sync. Over five weeks, consumers can purchase N’Sync bobblehead toys for $9.99 with a minimum $25 purchase. A different bandmate is featured each week. Aspen Promotions, Ontario, CA, handles.

The effort gets collectable with numbered certificates of authenticity. A portion of proceeds will go to charity. “We’ll get the usual traffic after Thanksgiving,” says Estes. “But we need to maintain that traffic through the holidays. One-offs don’t drive the purchase. We need to go further.”

Supporting the premium offer is a sweeps on Bestbuy.com dangling five trips for two to an N’Sync concert and a back-stage visit with the guys next spring.

Stores are also setting up “Toys for Teens” donation boxes — a new spin on the U.S. Marine Corp.’s Tots program, while Bestbuy.com hosts a sweeps that encourages visitors to pick out the gifts they want most—and hopefully e-mail the ideas to friends and family. Five weekly winners (over six weeks) will win the gifts on their list. All entries qualify for a $10,000 grand prize. Each Best Buy operating region has a marketing manager with a dedicated budget to use on localized programs, so specific stores will also run their own programs.

Surround Sound
Sponsorships and strategic partnerships, whether they be national or local, are key to the chain’s strategy.

The retailer’s sponsorship of the nearby Minnesota Twins baseball franchise, for example, last season produced Free Music Fridays, CD giveaways to the first 5,000 teens entering the Metrodome, as well as a Jukebox Hero Inning effort through which random fans received Best Buy gift certificates if a Twin hit a homer in the fifth inning. Last spring, the retailer distributed 10,000 free tickets to victims of the floods which swept through the Midwest, “a move that went far and above their sponsorship package,” says Twins vp-corporate partnerships Eric Curry.

Examples of cross-promotion can be found all over the store, but most heavily in the music and home-video departments. A July campaign served $5 gift cards to purchasers of N’Sync’s latest CD. A deal with New York city-based VH1 touted the net’s 100 Greatest Albums of All Time programming with tune-in copy in circulars, P-O-P displays, and prominent shelf space for the selected recordings (VH1’s 90s Week scored similar treatment in the fall). Estes says she targets partners that have “a visual and thematic consistency with our brand.”

“We’re flexible about what we give and gain,” adds Linton. “We want to be the partner of choice in this category.”

Record labels and Hollywood studios are on a first-name basis with the chain’s marketing department, which “is supportive and flexible, and those adjectives are understatements,” says Jim Kelly, head of sales with V2, Richard Branson’s U.K.-based record label, which includes Moby among its artist stable. “They develop promotions that work for everybody involved.”

At Best Buy, the shopping experience means more than just bright lights, effective merchandising, and eye-grabbing P-O-P displays: Sales associates are salaried and don’t receive commissions, which translates into a no-pressure atmosphere for shoppers.

Bestbuy.com chimes in on a regular basis, most frequently as a supporting cast member but sometimes with stand-alone efforts. Last month, the site ran a free-ticket offer for Walt Disney Co./Pixar Studio’s Monsters, Inc. to visitors who pre-ordered a “Pixar 3-Pack” (Toy Story, Toy Story 2, and A Bug’s Life). And weekly circulars are, of course, mainstays. (The tagline is, “Turn on the fun.”) The Best Buy Advertising group handles creative and media buys. The chain spent $106.6 million on advertising in the first six months of 2001, down from $119.3 million in the first half of last year, according to Competitive Media Reporting, New York City. Ad spending for Bestbuy.com shot up to $4.6 million in the first half of 2001, up from $441,000 in the previous period.

Gutsy decisions and strategic investments have turned what once was a small chain of Minnesota music stores into the nation’s largest consumer-electronics retailer. While the products lining store shelves may change, the new emphasis on integrated marketing is here to stay. “They demand a lot from of an agency,” says Nate Schrieber, a vp with Momentum’s New York City office. “But I get the sense that they push themselves just as hard.”

After all, it’s already shown signs of paying off. The company is No. 1 in its category and showing no signs of slowing down: Revenues rang in at $7.9 billion in the first nine months of 2001, up 29.5 percent from $6.1 billion a year earlier. (Without $781 million from new acquisitions, revenue growth was 16.7 percent.)

The Strategic Marketing Group will continue to get heavy play, especially as the chain beefs up plans for recent acquisitions such as Minneapolis-based Musicland Group (operator of the Sam Goody, Musicland, On Cue, and Suncoast chains) and Burnaby, British Columbia-based 91-store electronics chain Future Shop, both of which bring Best Buy into new arenas: malls from the former, Canada from the latter.

But regardless of the store or the shopper, the emphasis will be on flexibility. This year’s hot technology is next year’s Betamax, and core electronics shoppers are among the most fickle groups around. Plus, indirect competitors such as Target and Sears are adding to their home-electronics departments to gun for Best Buy’s bread and butter.

“In consumer goods, you know how big the market will be in five years. In retail, you can’t know if any department will be the same in a few years,” says Linton.

That’s why the branding dial has to be turned up to the max.

There’s one Best Buy department making more noise than Audio these days.

The marketing department.

Since breaking into mainstream promotions in fall 2000 by heralding its entry into the New York City market with a free Central Park concert starring Sting, Best Buy has been sounding off regularly. The consumer-electronics chain is now operating under a new marketing blueprint, a branding model built around annual “drive periods” tuned up with targeted promotions, strategic alliances, and both in-store and out-of-store execution.

“The Sting campaign was the beginning of us saying, ‘Big brands do big things that get noticed in big ways,’” says Michael Linton, the chain’s senior vp-strategic marketing.

Sting’s a tough act to follow, but Best Buy’s 92-person corporate-level Strategic Marketing Group — formed in 1998 to “build brand, create loyalty, and connect consumer marketing in a way that makes sense,” says Linton — has pulled it off by staying focused and making everything fun. The result has been a branding tractor beam used to attract, and retain, one of the most sought-after demographics: young, tech-savvy shoppers with money to burn.

“This is a target consumer that often doesn’t watch TV spots or read circulars,” says Linton. “Until recently, promotion was underleveraged. But we now know we need it to reach this crowd.”

In addition to this “Young Fun” core customer, Eden Prairie, MN-based Best Buy also targets consumers classified either as “Digital Home” (married couples with kids), “Technojocks” (active single males gaga for sports and music), or “Traditional Entertainment” (casual users).

Marketing a technology and entertainment brand that sells everything from cordless phones to Tom Jones CDs isn’t easy — especially when many shoppers still don’t even know what “DVD” stands for. The message needs to be consistent, relevant, and not too heavy handed while expressing the diverse inventory that exists under the Best Buy banner. What about rebates, the consumer electronics industry’s (over) tried-and-true tactic? Not in this store.

“A consumer goods marketing model doesn’t work for us,” says Linton. “We have a signal brand that represents a lot of things to different people. We need to create programs that represent all that.”

The 475-store retailer’s marketing machine is churning out a growing number of programs to set it apart from competitors. The first in 2001 was a spring-through-fall mobile tour — the chain’s first — called Fun Zone. Riding under a “Technotainment” theme, a tricked-out truck provided an opportunity for consumers not only to interact with technology but to learn how to incorporate it into their lives.

The Zone swung by baseball stadiums in several markets, tourist venues (such as the Santa Monica Pier), and such special events as the New York City Marathon. At some events, as many as 5,000 people checked out the truck each day. Eden Prairie-based Storeworks designed the Zone. St. Louis-based Momentum executed the tour.

A stylish home area, which showed off how technology is invading daily life, included refrigerators with built-in Web browsers and high-definition home theaters. A gaming area with videogame “pods” (space-age chairs) let users battle each other in head-to-head games. A digital music area boasted the latest MP3 players and PDAs. “We started researching an RV, and before I knew it this thing was a 53-foot truck,” says Debbie Estes, Best Buy’s director of promotions and events.

An in-store Go Mobile overlay timed around the truck’s launch handed out instant-win gamecards carrying codes shoppers entered online to see if they’d won one of 1,000 prizes. More than 150,000 codes were entered online.

Next came a fall back-to-school campaign — another first, and now one of the “drive periods” — for college students starring singer Moby and backed by Riverwoods, IL-based Discover Card. On Aug. 14th, shoppers showing school IDs scored gift bags stuffed with branded coffee tumblers, compilation CDs (featuring Moby and other artists), popcorn, batteries, and MSN Internet access offers. Customers who charged purchases with Discover cards were entered to win one of four $25,000 scholarships. About 500,000 entries came in over the course of the program.

The effort was just part of the activation package Best Buy put together as a co-sponsor of Moby’s summer/fall tour. Media and in-store P-O-P supported, as did an online sweepstakes dangling three “teched out” living spaces and a Ford Focus. (Some 57 percent of entries opted in to receive more information about the chain.) Market-specific sweeps in other markets ran in conjunction with the tour’s presenting sponsor, Santa Clara, CA-based Intel, and dangled meet-and-greets with the singer. “We’re looking to pull every lever,” says Estes. “Every campaign has been bigger than the one before.”

Ads, in-store radio spots, and hundreds of thousands of direct-mail pieces sent to young members of the retailer’s database supported. A cause-related component had consumers bringing old electronics into stores for recycling efforts (Moby aided the effort by filming a public service announcement).

Merry Christmas, Baby

That brings us to the holiday 2001 grand finale, a two-part program staged to generate traffic and purchases.

The first part kicked off last month, when Best Buy was the only retailer selling U2’s Elevation 2001 DVD for an exclusive two-week period after the Irish rockers ended their North American tour Nov. 19. The first 500 people in each store on Saturday, Nov. 24 received free CD samplers containing unreleased songs. Ads on VH1 supported.

The same day the samplers were being delivered, Best Buy threw the switch on its primary initiative, a premium incentive offer starring pop sensation N’Sync. Over five weeks, consumers can purchase N’Sync bobblehead toys for $9.99 with a minimum $25 purchase. A different bandmate is featured each week. Aspen Promotions, Ontario, CA, handles.

The effort gets collectable with numbered certificates of authenticity. A portion of proceeds will go to charity. “We’ll get the usual traffic after Thanksgiving,” says Estes. “But we need to maintain that traffic through the holidays. One-offs don’t drive the purchase. We need to go further.”

Supporting the premium offer is a sweeps on Bestbuy.com dangling five trips for two to an N’Sync concert and a back-stage visit with the guys next spring.

Stores are also setting up “Toys for Teens” donation boxes — a new spin on the U.S. Marine Corp.’s Tots program, while Bestbuy.com hosts a sweeps that encourages visitors to pick out the gifts they want most — and hopefully e-mail the ideas to friends and family. Five weekly winners (over six weeks) will win the gifts on their list. All entries qualify for a $10,000 grand prize.

Each Best Buy operating region has a marketing manager with a dedicated budget to use on localized programs, so specific stores will also run their own programs.

Surround Sound

Sponsorships and strategic partnerships, whether they be national or local, are key to the chain’s strategy.

The retailer’s sponsorship of the nearby Minnesota Twins baseball franchise, for example, last season produced Free Music Fridays, CD giveaways to the first 5,000 teens entering the Metrodome, as well as a Jukebox Hero Inning effort through which random fans received Best Buy gift certificates if a Twin hit a homer in the fifth inning. Last spring, the retailer distributed 10,000 free tickets to victims of the floods which swept through the Midwest, “a move that went far and above their sponsorship package,” says Twins vp-corporate partnerships Eric Curry.

Examples of cross-promotion can be found all over the store, but most heavily in the music and home-video departments. A July campaign served $5 gift cards to purchasers of N’Sync’s latest CD. A deal with New York city-based VH1 touted the net’s 100 Greatest Albums of All Time programming with tune-in copy in circulars, P-O-P displays, and prominent shelf space for the selected recordings (VH1’s 90s Week scored similar treatment in the fall). Estes says she targets partners that have “a visual and thematic consistency with our brand.”

“We’re flexible about what we give and gain,” adds Linton. “We want to be the partner of choice in this category.”

Record labels and Hollywood studios are on a first-name basis with the chain’s marketing department, which “is supportive and flexible, and those adjectives are understatements,” says Jim Kelly, head of sales with V2, Richard Branson’s U.K.-based record label, which includes Moby among its artist stable. “They develop promotions that work for everybody involved.”

At Best Buy, the shopping experience means more than just bright lights, effective merchandising, and eye-grabbing P-O-P displays: Sales associates are salaried and don’t receive commissions, which translates into a no-pressure atmosphere for shoppers.

Bestbuy.com chimes in on a regular basis, most frequently as a supporting cast member but sometimes with stand-alone efforts. Last month, the site ran a free-ticket offer for Walt Disney Co./Pixar Studio’s Monsters, Inc. to visitors who pre-ordered a “Pixar 3-Pack” (Toy Story, Toy Story 2, and A Bug’s Life).

And weekly circulars are, of course, mainstays. (The tagline is, “Turn on the fun.”) The Best Buy Advertising group handles creative and media buys. The chain spent $106.6 million on advertising in the first six months of 2001, down from $119.3 million in the first half of last year, according to Competitive Media Reporting, New York City. Ad spending for Bestbuy.com shot up to $4.6 million in the first half of 2001, up from $441,000 in the previous period.

Gutsy decisions and strategic investments have turned what once was a small chain of Minnesota music stores into the nation’s largest consumer-electronics retailer. While the products lining store shelves may change, the new emphasis on integrated marketing is here to stay. “They demand a lot from of an agency,” says Nate Schrieber, a vp with Momentum’s New York City office. “But I get the sense that they push themselves just as hard.”

After all, it’s already shown signs of paying off. The company is No. 1 in its category and showing no signs of slowing down: Revenues rang in at $7.9 billion in the first nine months of 2001, up 29.5 percent from $6.1 billion a year earlier. (Without $781 million from new acquisitions, revenue growth was 16.7 percent.)

The Strategic Marketing Group will continue to get heavy play, especially as the chain beefs up plans for recent acquisitions such as Minneapolis-based Musicland Group (operator of the Sam Goody, Musicland, On Cue, and Suncoast chains) and Burnaby, British Columbia-based 91-store electronics chain Future Shop, both of which bring Best Buy into new arenas: malls from the former, Canada from the latter.

But regardless of the store or the shopper, the emphasis will be on flexibility. This year’s hot technology is next year’s Betamax, and core electronics shoppers are among the most fickle groups around. Plus, indirect competitors such as Target and Sears are adding to their home-electronics departments to gun for Best Buy’s bread and butter.

“In consumer goods, you know how big the market will be in five years. In retail, you can’t know if any department will be the same in a few years,” says Linton.

That’s why the branding dial has to be turned up to the max.