Best Buy is a successful, multinational retailer, but have you ever wondered how the company got its name? A name is an essential part of any brand, having the power to make or break the company. In the case of Best Buy, the name contributed to the company’s ability to grow and flourish into the household name it is today.
About Best Buy
Best Buy is a multinational supplier of electronics based in Minnesota, USA. It currently operates in the USA, Canada, and Mexico, as well as the Chinese market as part of Five Star. The company has experienced significant success over the past 55 years and remains a strong player in the consumer electronics space. It has 125,000 employees, 1,600 stores throughout North America, and an annual revenue of over $40 million.
The beginning of Best Buy
Founded in 1966, Best Buy was initially called ‘Sound of Music’ like the iconic movie. It began as a single store in Minnesota that specialized in the sale of high fidelity stereos. The store was opened by Richard Schultz, who took out a second mortgage on his home to personally finance the store, and a business partner. The risk paid off and by 1967 Sound of Music expanded rapidly with the acquisition of Bergo Company and Kencraft Hi-Fi Company. Incredibly, the company made $1 million in revenue.
In 1969, the company had increased to a collection of three stores and its financial success meant that Richard Schultz had the means to buy out his business partner. The company continued to grow over the following years, reaching a total of 9 stores across Minnesota by 1978.
How Best Buy got its name
In 1983, the company underwent a rebranding exercise and the Sound of Music chain was given the new name of ‘Best Buy Company Inc.’ Before this strategic change, the company had one clear audience: 15 to 18-year-old males. The rebrand and decision to expand its product range to include VCR machines and other household appliances meant that Best Buy was able to expand its target market.
The company also adopting a business model that focused on low price and high volume. It wasn’t long before Best Buy established a strong reputation as a provider of affordable electronic products.
While several strategic decisions contributed to the company’s ongoing success, the name change facilitated this progression. Had the organization retained the Sound of Music name and brand, it would have faced significant challenges as it tried to appeal to a broader market. Changing the name of the company as part of the rebranding exercise provided clarity for consumers and helped the brand to solidify their new direction.
The Journey of Best Buy
After the rebranding, Best Buy went from strength to strength. It became a public company in 1985 and was on the New York Stock Exchange by 1987. In 1992, the company hit an exceptional milestone, making $1 billion in annual revenue.
The company continued to expand over the next decade, with various acquisitions. They began operating across the USA and even entered international markets as a reputable supplier of electronic goods.
Today, they remain a hugely successful retailer operating in a number of international markets. With the number of people working from home rapidly increasing, Best Buy has experienced spikes in sales. The future appears bright for the longstanding company and it certainly doesn’t appear to be slowing down anytime soon.
There’s no denying Best Buy has had some serious triumphs since its inception, however we can question whether it would have experienced the same level of success had it not rebranded in the 1980s. While it is impossible to know the answer, it is not unthinkable to assume its ability to transition to a wider audience so seamlessly was strongly supported by the name change. It sure does demonstrate the importance of choosing the right company name!