Management Spotlight

The retail business is constantly filled with marketing questions: What is working? What is not working? What products do customers want? The hard part is to stay on top of the trends and to keep people coming back to the stores.

About a year ago, Minneapolis-based Best Buy Co. Inc., with the help of Andersen Consulting, began manually measuring and analyzing ads in order to determine, over time, the answers to these questions. The company's ultimate goal, however, was to eliminate the tedious paperwork involved in the advertising process.

In September 1998, Best Buy rolled out its Advertising Information Management System (AIMS). With its stored information, AIMS lets Best Buy plan for a quarter, execute the plan and then evaluate it. Analytics that were previously done by hand are now brought to users' desktops. This lets the company change its plans in real time based on fluxes in consumer behavior, competitor behavior and industry trends.

AIMS was custom-built by Best Buy and Glastonbury, Conn.-based consultancy BDS Inc., using a variety of developmental tools, including Microsoft Corp.'s Visual Basic 5.0 and Objects of OLE from Oracle Corp. It began as an idea in the head of Brian Albright, director of process development at Best Buy. Albright put his thoughts on paper and, with Andersen's help, made AIMS a reality. BDS came on in February 1998, a move Albright said helped the firm accomplish much in a short period of time. Three hundred people now use the system, which runs on 250 Windows NT-based systems and 20 Windows 95-based systems linked to NT- and Unix-based servers from Compaq Computer Corp. and Sun Microsystems Inc., respectively.

Albright noted that Best Buy had looked at off-the-shelf alternatives, but said, "I don't think there's anything of this magnitude that exists today."

Before AIMS was implemented, there was a confusing shuffle of paperwork. Ad lists were submitted to the advertising department "through Excel spreadsheets, on cocktail napkins and through phone calls," said Albright, who has been with Best Buy for four years. "Things were getting lost."

What Best Buy needed was the ability to get a good, firm ad list over to the advertising department so that the merchandise customers saw in a flyer was available in Best Buy's 312 electronic superstores.

With AIMS, a retailer can do a "what if" scenario. "For example, if I key this item into this ad for this date, and have this price point and this rebate, AIMS will calculate on the fly and tell the merchant whether that is a good decision or not," explained Albright. AIMS can make these estimations by calculating a sales forecast based on history collected. This data is collected with SQL Server 6.5 and Oracle 7.3.3 databases.

This analysis lets retailers make good decisions before advertising people produce the ad, Albright said. In fact, after making a decision, AIMS can be accessed by the next department via intranet. Active Server pages, along with ActiveX controls and Visual Basic Script, on the Web server provide the HTML-based user interface. Data input is simplified and accessible through a main toolbar at the top of each screen.

"At this point, inventory can look at it and say, 'Yes, I agree with the forecast and I can have the product for you so that the customers are satisfied when they come in to find this [item] on this date,'" Albright said.

Finally, the information goes to the promotional analysts that comprise Albright's team. They ensure that the firm's strategy is in synch with the decisions made by AIMS. Once the promotional analysts give their approval, the ad list can proceed to ad production.

"Instead of 'I think this is what I want to do, [no,] I changed my mind,' everybody is on board before this thing ever goes to advertising," said Albright. The best part is that the entire AIMS process takes only minutes to sweep through the involved departments.

Albright said that before the implementation of AIMS, his department never even saw an ad list. In addition, he said, the ad department would be putting together the insert at the same time inventory was saying, "'Wait, I can't get this product.'

"It became a 'who has the right ad list game' ... no one knew because it was all paper. Now, there is one ad list and there is absolutely no question about what is going into that insert at any given time," he said.

The first insert using AIMS came out on November 29, 1998. Albright said the financial impact has been huge, and the numbers show that. The company seems to be flourishing. Best Buy had sales of $1.84 billion in December 1998, a 21% increase over the same time last year.

Best Buy is presently in Phase One of AIMS, but the company will be enhancing it for at least five more years, Albright said. "This [AIMS] has become a core part of Best Buy's culture because it affects so many people in marketing," he said. "It's everybody's tool.

"This is neat because it's kind of been my baby. I put it on a piece of paper and here it is in front of 300 people. And it's adding to the profitability of the company," said Albright. "What else can you ask for?"