Home' LAPTOP Magazine : October 2010 Contents The value equation is what Best Buy uses
to decide which notebooks gain access
to its precious shelf space and, therefore,
exposure to millions of shoppers. Because this
big-box retailer sells 5.5 percent of all notebooks,
and is the dominant third-party retailer of comput-
ers in the U.S., according to the NPD Group, this
mathematical formula has enormous influence.
In essence Best Buy has the power to determine
which technologies are ready for the masses,
and which ones still need time in the oven. But
what goes into this mysterious formula? And
who's behind it?
During our in-depth interview with Jason Bonfig,
Best Buy's vice president of computing---the most
important person in the PC industry you've prob-
ably never heard of---he demystified the value
equation. Bonfig claims that consumers have
the most sway in determining what gets picked
up, a dynamic he's taken to the next level with
the retailer's exclusive Blue Label laptops. He
also questioned the staying power of netbooks---
calling them "stale"---and weighed in on the iPad
competition. Note to tablet makers: Unless you
bring an app store and/or lots of content to the
table, it won't make the cut.
LAPTOP: Best Buy's value equa-
tion has become legendary within
the industry. How does it work?
JASONBONFIG:The best way to describe the equa-
tion is to say that it takes every single component
in a notebook and puts a customer value on that
component. Add up those parts and it comes up
with a customer value for each product. That value is
compared to the retail price or the cost, and can be
articulated in a percentage. That percentage deems
which products are a better value for customers,
based on the previous quarter sales information.
So really, we're taking customer votes.
L: What about when a new tech-
nology debuts? How do you factor
JB:There's some art and science. New technolo-
gies, won't be under that equation. You have to
make a judgment call. That's why we have very
HOW BEST BUY DECIDES
WHAT YOU BUY
Jason Bonfig dishes on the equation this retailer uses to tell
your computing future.
by Mark Spoonauer
good merchants in the
L: How did you
decide that Intel's
was going to be
valued by your
JB: There were a tremendous
number of customers telling
us that they wanted to figure
out how to take content from
their notebooks to their TVs.
Many were going the HDMI
route. We wanted to find a
way in which seamlessly and
quickly, customers could press
a button and put that content
on their TVs. It really caters to
the needs of watching videos
and the family principle---we've
all seen those pictures where
everybody's huddled around
the notebook or the desktop.
That doesn't need to happen
anymore. You can use the big-
gest display in the house.
L: WiDi was
exclusive to your
Blue Label note-
book line for six
months. How did
that whole pro-
gram come about?
JB: The premise was "the customer spoke and
we listened." We have a tremendous number of
extremely passionate customers. We also have a
number of retail employees who are very good at
articulating what their customers want. And then
there's a lot of external research that points out
things. We work with our vendor partners and
investigate what technologies can actually solve
customers' needs. Backlit keyboards are a great
example. Blue Label was one of the first products
that had it. Customers simply told us that they
couldn't see their computers in the dark.
L: From your perspective, what
notebook brands are on the way
up or down?
JB: There seem to be a lot more choices in the arena,
which is good. One of the things the value equa-
tion does, and we don't publish [this information]
externally, is actually assign a value for that brand.
The service experience, the length of warranty, the
design---a lot of things drive that value. HP is a
brand that our customers want. Sony is a brand our
customers want. Toshiba's a brand our customers
want, and I think they remain very strong.
for Best Buy, is
man in tech that
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