INTERVIEW-Best Buy sets out to win phone-wielding shoppers
* Sees little help from economy this holiday season
* To spend more on digital/mobile advertising this year
* To hire 15,000 seasonal workers versus 29,000 last year
* Expects Apple iPhone 5 to hit stores soon
* In talks with Amazon to carry new tablet
NEW YORK, Sept 27 (Reuters) - Best Buy Co (BBY.N) is counting on competitive pricing, new products like the Apple iPhone 5 and more advertising to bring shoppers through the door this holiday season.
The largest U.S. consumer electronics chain is not, however, counting on any help from the economy as it tries to make this holiday season different from the last one, when misplaced bets on items like pricey 3D televisions led to disappointing sales and earnings.
Best Buy is also cutting the number of seasonal workers it will hire by almost half.
"Our plan isn't built or predicated upon a meaningful move in the economic environment," Chief Executive Brian Dunn told Reuters in an interview on Tuesday, adding he was "cautiously optimistic" about demand levels this season.
"The consumer is being really careful about where he or she is spending the dollars, and I think that will continue through the holidays," Dunn said.
The holiday season is the biggest selling period of the year for retailers, and consumer spending accounts for about 70 percent of the U.S. economy.
To woo budget-conscious shoppers, Best Buy is promising to match any lower prices its brick-and-mortar rivals offer from Nov. 13 through Dec. 24, the peak of the holiday shopping season. The offer excludes the period from Thanksgiving Day on Nov. 24 through "Cyber Monday" on Nov. 28.
"We are mindful that people are very interested in great value," said Dunn, who expects smartphones, tablets and accessories under $100 to be big sellers during the holidays.
More than a quarter of Americans expect to spend less during the holidays this year, according to a recent survey, a sign that retailers will have to try harder to win shoppers. [ID:nS1E78B12W]
CHASING PHONE-WIELDING SHOPPERS
Best Buy has been facing cut-throat competition -- often on price -- from chains such as Wal-Mart Stores Inc (WMT.N) and Internet retailers like Amazon.com Inc (AMZN.O).
In order to win online shoppers and those who "comparison-shop" using their cellphones, Best Buy is "dramatically" increasing its spending on mobile and digital advertising, as well as carrying more products online, Dunn said.
"The Web is an incredibly important component of our overall strategy," said Chief Marketing Officer Barry Judge, adding that 60 percent of Best Buy customers visit the retailer's website before coming to the store.
Best Buy has now decided to offer products online from other sellers through its new third-party Marketplace, as it tries to better compete with Amazon and online auctioneer eBay Inc (EBAY.O) [ID:nN1E7860QH].
The retailer has also extended its return policy for purchases made during the holiday season, allowing shoppers to exchange gift purchases from Nov. 13 to Jan. 24.
Best Buy also hopes to be the destination of choice for the most sought-after gadgets this season.
Asked if the chain would carry the Amazon.com tablet expected to be launched on Wednesday, Dunn smiled and said, "We are having all the conversations you would expect us to be having."
He said he expects Apple Inc's (AAPL.O) iPhone 5 to hit stores soon. Apple is expected to launch the latest iPhone next week. [ID:nS1E78Q0PY]
Best Buy is hiring only 15,000 seasonal workers this year, down from 29,000 last year, and is counting on permanent employees to work overtime to close the gap in terms of hours worked.
(Reporting by Dhanya Skariachan; editing by John Wallace)
((dhanya.skariachan @thomsonreuters.com; + 1 646 223 6191; Reuters Messaging:dhanya.skariachan.reuters.com@reuters.net))
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