Best Buy continues to grow its anti-Amazon strategies, completing 12 straight quarters of improved sales.
One of its strategies is to improve online sales, which have become 1/4 of the chain’s sales, as of the recent quarter, which ended February 1. Best Buy’s online sales grew by 19 percent during the quarter, compared to a year ago.
One area that specialists may want to watch is Best Buy’s Total Tech Support program that provides free basic car stereo installation and discounted complex installations plus repair of many household products (including PC support) for $199/year. It now has close to 2.3 million members, up from 200,000 a year ago. Members use the service on average 2.5 times a year.
The company expanded its number of In-Home consultants who make house calls to help set up equipment such as TVs, PCs and WiFi. Those who buy the Total Support package get this service at a discounted rate of $50 instead of $199 per visit. Over the past year the number of In-Home consultants increased from 530 to 725 and the company provide more than 250,000 in-home consultations.
Best Buy has been investing heavily in its employees by offering higher wages, paid time off for part-time employees, expanded mental health benefits and paid care giver leave, which has resulted in lower employee turnover of 30 percent, down from 50 percent five years ago, it said. The average store manager has been at his or her location for six years on average.
Best Buy also has 900 Magnolia HiFi system designers and 6,000 Geek Squad agents.
The chain expects, over the next 12 months, that the following technologies will help drive sales: 8K, dual screen notebook computers, folding phones, 5G, electronic health products and new gaming consoles.
It will be rolling out new electronic labels on store shelves this year.
It also continues to invest in its app, which saw a boost in users of 20 percent. This year the app will allow users to schedule appointments within the app. Consumers will also see product availability.
Back to online sales– consumers now use Best Buy’s store pick up option for 42 percent of its online sales.
During the recent holiday quarter, Best Buy conducted a trial in 100 stores of curbside pickup, where the customer need not leave his car. This will be expanded to the majority of Best Buy stores over the next 12 months.
Best Buy also has alternate pickup locations in areas where there are fewer stores. So consumers can pick up Best Buy orders at UPS or CVS in select areas. These alternative outlets now amount to 2,000 locations.
Some of the most interesting observations from Best Buy CEO Corie Barry during the chain’s conference call with analysts Thursday, described Best Buy’s outlook on the Coronavirus. It said the majority of the impact will come in the first half of the year. The company is predicting essentially flat growth for the coming quarter, and admitted the virus may cut into sales due to shortages, among other problems.
A company officer added Thursday, “There is some supply related issues as a result of the Coronavirus.” The sales impact will be significant enough, “that we can’t make up all in one year.”
Barry said, the company is examining “vendor by vendor”what shortages in supply it can expect. Even companies that do not produce in China may use components produced there, she cautioned, adding, “The transportation situation has its own difficulties. We’re assuming the majority of the impact is in the first half.”
Here is Best Buy’s recent earnings report. https://corporate.bestbuy.com/best-buy-reports-better-than-expected-q4-fy20-results/