Best Buy CEO Corie Barry delivered a keynote speech during the first-ever digital CES 2021. She was interviewed by Fortune Media CEO Alan Murray during the 2021 CES video presentation. They discussed topics such as leading a company through a pandemic as well as diversity and inclusion hiring initiatives.
Barry and Murray were both introduced by Gary Shapiro, president and CEO of the Consumer Technology Association which produces CES.
“I’m thrilled to introduce our next CES keynote presenter Best Buy CEO Corie Barry,” Shapiro said. “Corey took over as CEO in 2019 after 20 years at the company. Her commitment to the organization runs deep. She knows what it means to build and grow a great team. I am continually impressed by Best Buy’s ingenuity. Recently, I wrote a book about how to succeed in our 21st century economy. I talked about how technology is rapidly changing the world around us and how we must embrace change and think like ninjas to succeed. Time and again I looked at Best Buy at what it means to be a ninja innovator. From folding GeekSquad into its core business in 2002, to acquiring health company GreatCall in 2018 to offer senior-friendly tech products. For more than 50 years, it has been the place for consumer to experience the latest from the CES show floor on retail shelves.”
Alan Murray: Corie, it’s such an honor to be with you today. It’s been an honor to get to know you over the past year. But I have to say you picked one hell of a time to become a CEO.
Corie Barry: “You never know what you’re walking into with these jobs, Alan. I think every new CEO would say the first year was unexpected. I would say the first year was incredibly unexpected.”
Murray: Let’s start with the products. What did you see after the pandemic hit?
Barry: “There were really three things that we saw almost immediately. The first was our hypothesis around enriching lives through technology became the reality for every single person. Meaning all of a sudden we were all stuck at home on the backs of technology. Anyone with kids, your kids were overnight learning from home. For anyone with large corporate offices, all of our employees were likely working from home. We were entertaining from home, we were cooking. Even connecting having conversations like this. That was the immediate need that we saw. We felt it was so important to continue to provide those products to our customers. Now, the second thing we found was the way in which we were going to provide those products to our customers was instantly different. People took immediately to more digital means. They were using all of the digital tools to their disposal. We went to curbside within the first three weeks of March. The third thing that we saw, literally overnight, is that our employees needed to work differently. Where we went into the pandemic with very structured jobs and responsibilities, you cover home theater, you cover computing in the store. Because we switched to a curbside model, everybody was pitching in to just get the gear to the customer in the way that they wanted. We did it without really thinking about it overnight.”
Murray: Let’s start with just needing the gear to operate from home. We all know the stories about toilet paper shortages. Did you have shortages? Were there products that you simply didn’t have the inventory to meet the demand?
Barry: “Yeah, we definitely talked about that. In the first quarter, we moved to curbside and we scaled back some of our inventory. Because all of us weren’t sure on what the world would look like on the other side. As we headed into June, we opened our stores back up to traffic. Immediately, we saw that business ramp up at levels we had never seen before. When you have that demand-supply imbalance, you just can’t keep up with it. You couldn’t even manufacturer enough to keep up with it. Nobody knew there would be a run on webcams at the pace that we saw. Suddenly, it became the hottest item that we had. It definitely was a challenge to make sure we had all of the gear people wanted.”
Murray: Any other big surprises other than webcams that suddenly everybody wanted that you weren’t expecting?
Barry: “As the pandemic has worn on, it was creating the more wholesome solutions. So it started with computers and everybody wanted a computer. As we were all stuck home staring at the dot on our computer, we realized, oh no, I really do need a webcam. And then I wanted speakers or a microphone so I was clear in what I was hearing and what I was saying. And then I wanted a nice ring like so at least I looked like I was stepping out of my office. As you had more time to think about what the best experience might be at home, then you started bolting on the ancillary products. The other thing that was interesting was how much people needed to entertain at home–whether it was home theater so you can stream everything you wanted or gaming. Everyone had kind of waiting for a new gaming console. They were looking for anything they can do, in my case a 14-year old boy to help them entertain themselves at home.”
Murray: One of the things people have said about 2020 is that everything accelerated. One of those trends was the move away from in-store commerce to online commerce. How did you compete with purely online channels that were selling the same products?
Barry: “One of the most interesting things that we saw even as our online ramped. As of Q3, they were up 175 percent. Forty percent of those sales were either being picked up in our stores or curbside. So there was this real demand to be able to come to the store to get this item where I wanted it, when I wanted it, as fast as I wanted it. We assumed this digital penetration was going to increase. Therefore, we needed to double down on our fulfillment mechanisms and we needed to put the customer in control. What we thought might take three to five years to penetrate this highly happened overnight. All of the supply chain investments we’ve been putting in for literally four years, we flexed all of those up to meet that large scale demand. Whether the customer wanted it on their couch, whether they wanted it curbside or on the counter, that needed to not matter to us. We need to agnostically meet that customer wherever they are. I think that’s going to be the future, for sure, of retailing.”
Murray: Was it hard to get the stores on board for that?
Barry: What was amazing was there’s something very unifying about a pandemic. What I mean is what you’re so worried about your employees safety, your customer’s safety, and making sure they get what you fundamentally know they need to live, that’s a very unifying factor. All of a sudden you worry a lot less about what channel is it happening in, what store is it happening in. Some of the real magic is watching the unification of our efforts against very common and very basic problems.”
Murray: So many great stories about that over the year. It’s kind of like the pandemic caused risk aversion to evaporate. We knew what risk was, it was the Coronavirus. Then, everything else was unified in trying to figure out the solutions. It was an amazingly innovative period because it was an amazingly tough period.
Barry: “You’re absolutely right. It wasn’t just that it was innovative but companies also learned how to iterate. Especially as a large footprint retailer with almost a 1,000 physical touch points, we don’t iterate incredibly well. Overnight, not only did we launch new ways of working, we had an incredible feedback loop with our stores, an incredible feedback loop with our customers as we heard how they wanted to interact with us. That part I give our teams more credit for than anything. This idea that it wasn’t just launch something but you kept working at it until you felt like the solution was right.”
Murray: Having learned what you learned in your incredible first year as CEO, and knowing that much of that is going to stay learned, and you look towards the future, what is the role of the future store??
Barry: “I think it’s going to be more broad than it’s ever been. Meaning the store is going to have a massive role in fulfillment. You’re going to have to enable that store to get that customer whatever they needed in whatever timeframe they want it. Do they want it same day? Do they want it within an hour? Do they want it curbside or are they OK waiting for us to ship it? This idea of stores as fulfillment epicenters is really important. But they also have a real experiential need to fill in our case. We definitely noticed as soon as we opened our stores back up, the places where our customers gravitated were those more complex sales. They wanted to have that interaction. They had high expectations for what that interaction and consultation would look like. And then finally, in our case, the store plays a very important role in support and help. When I need support and help to make sure this thing keeps working…our stores play a very vital role in that. That’s a very hands-on experience.”
Murray: How do you predict what happens now? Are we going to slow down again? Does the acceleration continue? Have we picked up the pace of technology adoption?
Barry: “There isn’t a world where people revert back to their 2019 behaviors. Part of that is just a comfort level. I knew the world had changed when my dad started getting his groceries ordered online and picked up curbside, right? He was never going to adopt that readily or at least it was going to take a lot longer. But he was forced to. Now that he’s comfortable with that curbside experience, he’s more comfortable with curbside experiences in general. Telehealth is another great example. We’ve gone through years of trying to push the consumer to adopt telehealth methodologies. Overnight, because it was required, you have a much deeper penetration of people who understand how to use telehealth tools. I think it’s the comfort level, more than anything else, that will continue to push the envelope. Once you have a great experience with one retailer or one provider of any kind, you expect that experience from everyone else that you deal with. If I have a great curbside experience at Best Buy, I’m going to expect that kind of curbside experience.”
The Best Buy CEO said the company will reach 30,000 teens through a network of 100 teen tech centers. In addition, she said Best Buy will spend $44 million to expand college prep opportunities for students and create 16 scholarships at historically black colleges.
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