Best Buy CEO Corie Barry Shares 3 Permanent Implications of the Pandemic
Despite Best Buy stores being open by appointment only for the first six weeks of its second quarter, the retailer still saw its total comparable sales jump 5.8% and online sales soar as it adapted to operating in a pandemic.
At the beginning of its second quarter, which ended Aug. 1, Best Buy started offering an in-store consultation service by appointment only. On June 15, more than 800 stores started to open to all traffic, and by June 22, almost all of its stores were open.
Throughout the quarter Best Buy offered a buy-online-pickup-in-store/curbside option for digital orders, which accounted for 41% of online sales -- online sales that skyrocketed 242% in the quarter compared to its Q2 of last year. What’s more, its domestic online sales have continued to be very strong in its current quarter, up approximately 175% for the first three weeks of August, CEO Corie Barry said on the retailer’s earnings call.
Barry also provided insight into Best Buy’s approach on the call, naming three concepts the retailer believes to be “permanent and structural implications of the pandemic.”
- Customer shopping behavior will be permanently changed in a way that is even more digital and puts customers entirely in control to shop how they want. “Our strategy is to embrace that reality and lead, not follow,” Barry noted.
- The workforce will need to evolve in a way that meets the needs of customers, while also providing more flexible opportunities for associates.
- Technology is playing an even more crucial role in people's lives due to the pandemic. “Said differently, people are using technology to address their needs in ways they never contemplated before, and we play a vital role in bringing tech to life for both customers and our vendor partners,” Barry explained.
“As you would imagine, these concepts are extensive and interdependent, and we are both implementing change today and assessing future implications across our business,” Barry concluded.
One way Best Buy is implementing change is in its fulfillment methods. The retailer will be piloting a ship-from-store hub model in around 250 stores beginning next month, to help handle pre-holiday and year-round digital demand. While all stores will still ship out online orders, these locations will be positioned to ship out much higher volume.
“These locations were chosen for their space, proximity to carrier partners and ability to support same and next-day delivery,” Barry said.
Best Buy is also adding third party pickup locations for online orders; currently it has more than 16,000, covering 85% of the population within five miles. To improve the curbside pickup experience, the retailer is adding functionality that will display information about high and low traffic times, and provide digital updates for customers when they are in the parking lot waiting for their curbside orders.
To boost its mobile app capabilities, the retailer is piloting more opportunities for virtual consultation, including abilities to share live video. It is also expanding its use of augmented reality so customers can more easily select products based on the space in their homes by using the camera on their own phone.
The retailer is also leveraging localized data and analytics that allow it to pilot store-to-store differences such as opening stores an hour earlier for consultations only.
“Using data and analytics also allows us to quickly and productively customize operations to the local situation if necessary,” said Barry. “This is especially important for us to effectively respond should the virus flare up in certain markets.”