There’s no doubt the retail marketplace is shifting. Sears stores are being torn down coast-to-coast, malls are dying, and many once-thought-immortal big box stores are struggling to keep pace with how people are buying things these days. And then there’s Best Buy.
Once considered an afterthought or also-ran in the consumer electronics marketplace, Best Buy not only managed to outshine and outlast its myriad competition, the company continues to thrive even though newcomers into the market are stealing market share and online dealers are pulling customers out of the brick and mortar stores.
Let’s look at the competitors who have all run up against Best Buy and come up short: Circuit City, RadioShack, and HHGregg have all struggled, and the former two have closed their doors as consumers continue to make different buying choices.
At Best Buy, both sales and stock prices are way up. And so are profits, leading to a 20 percent uptick in share value, cresting the highest level they’ve been, ever, while beating a record the company set more than a decade ago. In those days there were no smartphones, and CDs were just beginning to be replaced by digital downloads. Since then, many of Best Buy’s key product lines have completely flipped.
So, what’s driving this success? Both traditional and online sales have been strong. Instead of picking one or the other and focusing on that, which has been the tactic employed by others in this segment, Best Buy has chosen to invest in both retail streams, maximizing profits on both ends. But what are they selling?
Turns out, Best Buy is doing very well with hardware: handsets, cameras, ancillary equipment for audio and video as well as equipment for playing and enjoying video games…that sort of thing. But that’s just one end of things. How are they also competing well online? Well, first they crunched the numbers to see how many people were shopping online, how many of these people are using smartphones and what they were buying.
Those answers allowed Best Buy to focus on making the mobile shopping experience at BestBuy.com easy and efficient. Those efforts have yielded an interface customers seem to appreciate. According to recent company disclosures, Best Buy’s online sales are up 23 percent, and a lot of that credit is being given to aggressive increases in mobile sales.
Focusing on a combination of informed customer service and preemptively responding to customer preferences has allowed Best Buy to thrive when many others have closed their doors. If they continue this approach, they may well continue to thrive, no matter what the market does.