Best Buy is taking on Tower Records and Virgin Megastores. The discount electronics retailer has launched a marketing campaign to boost CD and cassette sales through a lineup of in-store artist performances and autograph sessions that the retailer hopes will give it a foothold in a market long dominated by the two heavy hitters in the business. A Woodland Hills unit of Best Buy was the most recent Southern California location to host an in-store performance with a Feb. 4 appearance by 1980s pop icon Rick Springfield (“Jessie’s Girl,” “Don’t Talk to Strangers”), who signed copies of his new release, “Rick Springfield Alive.” According to Dusty Bowling, regional marketing director for Minneapolis- based Best Buy, music product sales for the Woodland Hills store following Springfield’s appearance spiked 28 percent over sales for the same day last year. Roughly 750 people turned up for the event, generating a 12-percent increase in sales over other music departments at Southern California Best Buy stores the same day, Bowling said. The event proved so successful from Springfield’s point of view, the singer agreed to another appearance at a Best Buy location in Phoenix sometime next month. Acknowledging that the Los Angeles music retail market is a tough one to tap into, Bowling said the company is deliberately going after artists like Springfield who already appeal to a particular consumer, as well as the artists just coming on the scene. “It’s very difficult out there in Los Angeles, where there are a lot of record retailers in town,” said Bowling, “especially when most of the popular contemporary artists want to do Virgin and Tower appearances. Best Buy falls somewhere in between there, and we will get the artists that the public remembers and those who are just breaking into the market.” The campaign’s goal is to expand the Best Buy brand beyond the multi-media, music and automotive hardware product line and entice consumers to think of the retailer as an alternative for CDs, cassettes and videos. “Music is very important to Best Buy, so to leverage our assortment that we have in the stores we try to do other fun things in the marketplace,” Bowling said. Although he declined to give exact revenue figures, Bowling said the Woodland Hills event generated sales of about 800 CDs, 185 of them Springfield’s. “We were pleasantly surprised at the amount of CDs we sold for that event,” he said. Bowling said of the company’s overall revenue for 1999, roughly 19% came from Software entertainment sales (CDs and cassettes). Toe to Toe With Borders Analyst Derek Leckow, with Barrington Research in Chicago, covers one of Best Buys’ competitors, Borders Group, parent company of Borders Books and Music. He said Best Buy has certainly figured out its competitor’s strategies for image boosting and increasing product sales. “This is a marketing concept that works very well for retailers,” Leckow said. “Obviously, the company could drive synergies with their consumers who might be in the stores buying the album of the person who has performed while, at the same time, looking at their hardware products.” Not surprisingly, customers were predominantly female, 30 and above. But those customers did bring their friends and family members, which, said Bowling, was the point. “What was important to us was that these women brought their children in for the event along with them, and those are our potential customers for other formats,” said Bowling. Donald Trott, an analyst with Jefferies & Company Inc., said this type of marketing campaign can be effective in boosting the bottom line on soft product sales and beefing up a retailer’s visibility. “As with numerous retailers, what Best Buy is doing represents a way of establishing good will in the community and, at the same time, the store hopefully benefits from making people less familiar with the store more attracted to its brand,” Trott said. “Best Buy already has a foothold in the soft music product marketplace (CDs, tapes and videos) and we see this as being very constructive.” Best Buy has 45 stores in California, 25 in the greater Los Angeles area, including Pasadena where a 1999 performance by the alternative rock band Disturbed, in conjunction with alternative radio station KROQ-FM, helped boost music sales by 125 percent over the following 30 days. The in-store performances and signings came up as a viable marketing strategy about seven years ago, said Bowling. As a regular sponsor of the Chicago Blues Festival, Best Buy started asking performers to stop by their tent after their performances to sign autographs and meet fans. The attention generated by the festival events suggested it might be possible to transfer the concept to in-store concerts and signings. Bowling said the company typically organizes about 25 in-store appearances a year, but now expects that figure to soar to about 100.
