Small-format locations, outlets, virtual stores and an increased presence in the healthcare category are among the initiatives that Best Buy executives say will carry the electronics retailer into the future and help connect with consumers.
Best Buy CEO Corie Barry said the demand for convenience and experience on the customer’s terms “has exponentially driven change” and forced retailers to expand the definition of “omnichannel” beyond just meaning in-store and online offerings, to also include seamless customer service and technology-driven operations that can quickly adapt.
“Our hypothesis has consistently been that true omnichannel retailing would create differentiated experiences that allow us to seamlessly and conveniently engage and retain customers,” Barry told analysts on a conference call on Tuesday (Nov. 23).
Last month, Best Buy agreed to acquire healthcare startup Current Health, which integrates remote patient monitoring, telehealth and patient engagement onto a single platform. The acquisition is part of the retailer’s three-pronged healthcare strategy, which includes consumer health monitoring, tech-supported aging in place and virtual care.
Also see: Best Buy to Acquire Current Health to Advance Tech-Focused Patient Care
Barry noted, though, that it will likely take time for Best Buy to fully scale and realize the benefits of its healthcare efforts despite the heavy investments made in recent months.
“Even though the healthcare industry is evolving quickly, in many ways as a resolute of the pandemic impacts, it adopts new ways of doing things at a much slower pace than other industries like retail,” she explained.
In the meantime, Best Buy is also testing a slew of new store formats, including several different models in the Charlotte, North Carolina area and a virtual store built within a distribution center. The virtual store is staffed with dedicated associates but has no physical customers, instead allowing shoppers to interact via chat, audio, video and screen-sharing to see live demos and physical products.
“Stores are crucial to our customer experience, and they need to be even more efficient and must keep pace with greater customer expectations,” Barry said.
In the third quarter, comparable sales increased 2% on top of the nearly 23% growth over the same period last year, with revenue reaching $11.9 billion, approximately the same level as last year. For the fourth quarter, the retailer expects revenue between $16.4 billion and $16.9 billion; comparable sales are forecast to be between a decline of 2% and a growth of 1%.
Omnichannel Opportunities
Best Buy is also seeing consumers increase their usage of curbside pickup and same-day delivery offerings, with same-day delivery up 400% in the third quarter and the percentage of products delivered within one day doubling compared to last year. The percentage of online sales picked up at Best Buy stores was at 42% in the third quarter.
“Customers are returning to stores, and they are also choosing to interact with us digitally and via phone and chat at much higher rates than pre-pandemic,” Barry said.
The Minnesota-based electronics retailer last month rolled out a new membership program called Totaltech, which provides customers with 24/7 Geek Squad support, two years of product protection, members-only prices, and free delivery and standard installation.
“Not only can members receive significant savings, but they can also be confident that whatever their technology needs are, we will be there to help,” Barry said.
Read more: Best Buy Rolls Out Tech Support Subscription Nationwide
Across all of these offerings, she noted, the goal is “to create an experience that makes it inconceivable for members to purchase their tech from anyone else.”
“That means leveraging technology in stores … and developing a much more flexible workforce,” Barry said.
