Best Buy Slashes Delivery Times by Two Full Days

Best Buy has completed its ship from store rollout and now promises customers delivery two full days quicker than before. The electronics retailer now offers the service at all of its 1,400-plus locations enabling not just speedy delivery but the sale of returns and open box items online.

The retailer losses over $400 million a year to returns and open box items that until recently could only be sold in-store. Through the implementation of ship from store, Best Buy is releasing its open box inventory to online shoppers — a move CEO Hubert Joly believes will have lasting implications on the bottom line.
"Along with the clear customer experience benefit, this capability will accelerate our online growth," Joly said. "It provides us a major opportunity to further reduce the over $400 million we lose each year from returned products."

The brick-and-mortar electronics business has struggled in recent years as the online leaders like Amazon capture more and more of the market. Traditional brick-and-mortar retailers have struggled to keep pace with the online colossus' pricing advantage, but with the release of price match and now ship from store capabilities Best Buy is closing the gap.

In the fourth quarter the electronics merchant grew its online business more than 25% year over year, accounting for 12.7% of total sales. Domestic online sales grew by 20% for the year.

"In the fourth quarter, even in its early stages and with limited deployment, ship from store enabled significant online growth, improved online conversion and increased store comps," Joly said. "Now that we have ship from store across our full store chain, in the first half of this year we will be able to use our over 1,400 stores and eight well located distribution centers to improve speed to customer, enabling faster delivery of online purchases at lower cost to Best Buy."

To help further grow its online business Best Buy is working on a targeted marketing project it plans to launch in the next 24 months. The project, named Athena, will leverage the huge amount of customer information the retailer has on file to personalize marketing messages. The Big Data initiative will examine past purchases, browsing history, location and demographics to craft personalized e-mail marketing efforts to increase web traffic.

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