Helpful WSJ Article on BB Black Friday Techniques

[karina_anne]

Best Buy Hopes Practice

Pays Off for 'Green Friday'

By KRIS HUDSON

November 20, 2006

 

FARMERS BRANCH, Texas -- For the 160 employees of the Best Buy Co. store in this Dallas suburb, "Green Friday" started at 6 a.m. Saturday.

They trudged into their store from its vacant parking lot before dawn to take part in an annual "dry run" that makes Best Buy one of the most efficient and effective U.S. retailers on the Friday after Thanksgiving, especially during the frenzied "doorbuster" rush before sunrise.

 

That pivotal Friday is a day that will determine the success or failure of many retailers' overall holiday sales and, to a lesser extent, profit. Most observers call it Black Friday, but Best Buy staffers refer to it as Green Friday.

 

"Today is not going to be perfect during our dry run, so we want to make sure we identify problems and get those corrected for Green Friday," the store's general manager, Kathy Garcia, told her groggy employees -- roughly half of whom are entering their first holiday season in the retailer's employ -- as they gathered around her in the home-theater department prior to starting the exercise.

 

Many forecasts for the holiday shopping season predict a modest performance by U.S. retailers, which still are coping with the penalty that high energy prices exact from shoppers' discretionary spending. Thomson Financial predicts that the publicly traded U.S. retailers it tracks will post an average gain in same-store sales -- or sales at stores open for at least a year -- of 2.8% for November. Thomson predicts that Best Buy, which reports its sales on a quarterly basis rather than monthly, will log a gain of 3.8% for its holiday quarter, up from 3.3% in the same period a year ago.

 

Richfield, Minn.-based Best Buy logged revenue of nearly $12.8 billion in the first half of its current fiscal year, up 11.3% from the first half of last year.

 

Electronics retailers such as Best Buy, the leading U.S. electronics-only retailer by sales, face a particularly hectic holiday season. Perhaps more than usual, several consumer-electronics items top the list of most-coveted purchases this season. Prices on high-definition plasma television sets have fallen to levels that finally make them a reasonable purchase for most consumers. The recent release of the Sony PlayStation3 and the impending release of Nintendo Co.'s Wii console will make video games a popular gift. And laptops will continue their strong presence among doorbuster promotions.

 

Complicating matters for Best Buy and others is the aggressive push retailing titan Wal-Mart Stores Inc. has made into consumer electronics this year as part of its effort to appeal to a broader - and more affluent -- range of shoppers. While analysts do not anticipate Wal-Mart has enough momentum this year to truly rock its competitors, it already has unveiled low prices on certain items that caused its competitors to scramble to adjust. For example, Wal-Mart's offer of a 43-inch plasma TV for $1,289 forced Best Buy and Circuit City Stores Inc. to drop their prices on the sets, which they previously offered at $1,600 to $1700, according to Sanford C. Bernstein & Co. analyst Colin McGranahan.

 

Thus, the stakes are as high for this Green Friday as for any other at the Farmers Branch store and 770 other Best Buy stores. The Farmers' Branch store, located in a bustling shopping district anchored by the glitzy Galleria Dallas mall, reaped $649,000 in sales last Green Friday and hopes to notch a 20% gain this year. "There's [not another] month where one day so shapes that month," said Paul Johnson, Best Buy's regional manager in Dallas.

Few outside of Wal-Mart generate as much early shopping by customers on the day after Thanksgiving as Best Buy. The retailer starts the process prior to opening its doors at 5 a.m. that day by canvassing the lines outside of its stores -- which often extend for 100 yards or more -- to gauge what products people came to buy. Those in line are given claim tickets for their desired doorbuster items, starting at the front of the line and progressing back, until the supply of those items is exhausted.

 

Shoppers are then coached on how to navigate the store when the doors open. They can find where to pick up doorbuster items by going to sections marked by specific colors of balloons, such as red balloons for laptops or orange for plasma TVs. Once they get to the relevant section and claim their item, shoppers often can pay for it at registers right there rather than filing into a massive line for registers at the store's front. Specific lines -- marked with blue tape on the floor and manned by employees acting as traffic directors -- are designated for items such as laptops that require lengthy checkout processes, sometimes including additional purchases of software, cables or extended warranties.

"Rearranging the store for those three or four hours that morning is the key to making it work," said Mr. Johnson, the district manager.

 

The sense of purpose was clear among employees at the Farmers Branch store on Saturday morning, even though some occasionally had to stifle yawns. Department supervisors urged employees to avoid the cardinal sins of Green Friday: arriving late or missing a shift with little or no notice. "This is the team that is going to carry us for the holidays," a supervisor in the home-theater department told her charges. "So please make sure you take care of yourselves. Stay healthy so we don't have to call in."

 

As the practice drill began, dozens of employees lined up outside of the store's front door to pose as customers. Others worked the line to inform the "customers" of how to get to the merchandise they sought, whether that item would be in stock by that customer's turn and what accompanying merchandise the customer ought to consider.

 

Standing in line, Tony Roberson, a senior sales associate in the store's computer section, was tasked with attempting to buy both a special-offer laptop and a plasma TV. He received claim tickets for both and instructions of where to go in the store. Once the doors opened, he strolled to the designated TV line, made his mock purchase after a quick consultation with employees there and was told he could pick up his TV in the store's car-stereo installation bay. He then went through a similar drill in the laptop line. The exercise was markedly subdued from what is expected on Friday.

 

"Obviously, there are a lot of things that can happen," Mr. Roberson said after completing his faux purchases. "This gives everybody an idea of how seriously we take it, especially our new associates."

 

Not serious enough for Ms. Garcia, the general manager. She assembled her employees at 7:15 and ordered them to do the dry run over again.

 

This time, as mock customers crowded into a single line headed toward the store's front registers, playfulness and punchiness complicated matters. "I need for you all to be as serious as possible," the store's front-end supervisor sternly warned the jostling line. "We need this practice."

 

The supervisor reminded his cashiers to offer customers last-minute accessories and magazine subscriptions as a way to recoup some of the profit margin the retailer will sacrifice on its doorbuster items.

 

As the employees met for a final time in their departmental groups, managers noted some of the deficiencies identified during the dry run that will be addressed prior to the big day. In the home-theater department, that meant stationing a member of the store's home-installation team in the department so that scheduling of the delivery and installation of customers' new TVs could be handled immediately.

 

"I saw a little confusion [during the practice]," the home-theater supervisor told her crew. "You can only imagine when we have hundreds of people in here what that would look like."

 

By 8:30, Ms. Garcia gathered the employees one last time to outline final changes to the Green Friday plan. Prior to disbursing to open the store for the day's business at hand, the employees gathered like a sports team for a pregame cheer. "Give me a B! Give me an E! Give me an S! Give me a T!" they shouted, calling out each letter in the retailer's name. "Who are we? Best Buy! Who are we? Best Buy!"

 

IMHO this article gives a fairly accurate description of how my BB operated last BF. I thought they did a good job of describing it and that it might be helpful primer for those who are shopping BB for the first time this year!

[shaneberry21]

I can't believe Best Buy practices for Black Friday. At my local Best Buy, (STL, MO)IT IS always a disaster. Within five minutes, the lines are jam-packed. You could stand in the line for an hour even if you were one of the first in the store. I'm jealous that other stores around the country run so smoothly.

[bigjimslade]

For curious minds this store is on 365 LBJ Freeway and Midway. It is a great store.

[Zimarooski]

Thanks for the informative article, I got some really great insight from that.