Best Buy turned pandemic lemons into lemonade
Many retailers have adapted and evolved in the wake of the coronavirus pandemic. But few have done it as well as the name of consumer electronics Best buy (NYSE: BBY).
The figures for the last quarter point in this direction. Same store sales 5.8% improved year-over-year despite coronavirus-related closures, and company-wide revenue grew 4% for the three-month period ending in June. It’s impressive, especially given the circumstances.
Where the retailer has turned out to be truly impressive, however, is beyond the numbers. Best Buy has taken a methodical and well-reasoned approach to responding to difficult situations and has implemented solutions that will continue to work after COVID-19 is in the rearview mirror.
“Fairly good” is not good enough
Most consumer-oriented businesses have taken various measures in response to the pandemic. Walmart merged its grocery store app with its platform that sells merchandise from the rest of the store to encourage curbside pickup. Target has also expanded its curbside collection offer. Kroger configured its stores to help facilitate social distancing.
However, Best Buy did relatively more, relying on little-used consumer data by other retailers.
It wasn’t entirely clear until the company second quarter conference call Tuesday of this week. That’s when CEO Corie Barry fleshed out some of the initiatives the company has put in place from March.
Perhaps most important was to tailor the operations and opening hours of each store to optimize each particular location. The company was keen to use real information to do this. Barry explained on the call, “We leverage localized data and analytics that allow us to drive various services like opening stores an hour earlier for consultations only,” adding that “data usage and analytics also allows us to quickly and productively customize operations to suit the local situation if necessary. “
This contrasts with responses from Walmart or Kroger, which have largely steered their stores towards a uniform response.
Barry also draws on what the company has learned in the recent past. All stores will now process some online orders, but around 250 stores will process significantly more online orders depending on their geography. These stores are close to a major delivery center, allowing the retailer to keep their promise to ship certain items within one day. To do this in the most efficient way, Best Buy needs to know where the majority of its orders are coming from and where they are going. He also needs to know where online orders are not strong and are not worth the extra investment.
Best Buy was also able to introduce virtual home consultations as early as April, helping people solve difficult technology problems at a time when a wide range of Americans were suddenly working from home. The program has continued to expand. For the locally managed customer consultations, the electronics retailer invested time and money to make them as efficient as possible.
Barry noted during the quarterly call: “We are building the foundation by guiding our store workers through competency-based training for their existing roles. Over time, there will be opportunities for employees to learn additional skills and be able to fill multiple roles. “Best Buy is equipped to make this extra learning profitable as well. In February – and for a second year in a row – Training The magazine ranked Best Buy employee training as the third best in the world.
The company even went so far as to analyze when the traffic from online pickup orders was greatest and adapted accordingly.
Best Buy is simply better
On the surface, these are just steps Best Buy has taken in response to COVID-19 because … well, every retailer has been forced to do their best at a difficult time. Of course, Best Buy’s response is a bit different from Walmart’s, which is a bit different from Target’s.
Barry was not satisfied with the most obvious adaptations, however. Although she only took the helm just over a year ago, she knew enough at the onset of COVID-19 to identify opportunities to cultivate more than quick and temporary fixes. She upped the pressure on the use of technology and data, and used existing employee knowledge in ways most retailers might not or could not.
Likewise, this trying period revealed a little-known asset for the company. That is, Best Buy employees quickly adjusted, finding ways to make curbside pickup work in their particular stores and shifting gears to work as a personal call center or chat online. with customers seeking help.
The point is, these little things aren’t that small actually. Best Buy is now better prepared than most for anything that might come next.
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