Why Best Buy (BBY) continues to be successful

I've been known to harp on consumer retailer Best Buy, Inc. (NYSE: BBY) from time to time here. The retailer just gets it in most cases -- from the consumer experience to merchandising decisions to customer service. While fellow retailer Circuit city Stores, Inc. (NYSE: CC) completely doesn't get it and is in horrid shape, Best Buy just keep steaming along, economic recession be damned. Here's a reason why: its store managers are actually encouraged to go "off script" and change merchandising displays on the fly to fit the area where the store is located.

This example about a normal Houston-areas Best Buy location is a perfect example. Houston, being the large port city that it is, was seeing a huge amount of Eastern European shoppers. As a result, it moved iPods and international power converters to the front of the store (from the rear) and saw sales spike on these items -- among other things -- by 67%. In most cases, changing merchandising displays -- called planograms -- are a huge no-no in corporate retailers. The thinking is that the "secret sauce" that works at one store should be simply duplicated at every store. Big-box retailers like Wal-Mart Stores, Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT) follow this strategy religiously.

Expecting store managers to take risks in terms of merchandising decisions is the kind of thing that makes good retailers great. Contrary to what some national retailers preach and practice, the customer needs vary widely from state to state and market to market in most cases throughout the U.S. Why not have a planogram for every unique store that responds better to the surrounding population and give the local consumer the best and most profitable experience? Looks like Best Buy even made the experience personal for shoppers from halfway around the world. That kind of thinking is why the retailer continues to be successful.