Despite falling foot traffic, Best Buy is becoming a more efficient store after hatching a new business strategy several years ago.
Best Buy’s Renew Blue plan is built around improving the store’s online sales, according to ZDNet. In addition the plan touches upon enhancing consumers’ time spent in-store, in an attempt to build a greater overall multichannel shopping experience. Despite the success the new plan has brought though, sales are still slow for the company. Consumer electronics sales are down and mobile phone sales have slowed ahead of major releases such as Apple’s iPhone 6. Best Buy is expecting same-store sales to continue to gradually decline in the coming months.
Somehow, despite slow in-store sales, the electronics chain’s e-commerce integration is making operations more efficient.. The company even beat Wall Street expectations in the second quarter.
“In the second quarter, we delivered $8.9 billion in revenue and $0.44 in non-GAAP diluted earnings per share versus $0.32 last year,” Hubert Joly, Best Buy president and CEO, said in a press release. “The ongoing benefits of our Renew Blue cost reduction and other SG&A cost containment initiatives drove these better-than-expected results. On the topline, as expected, sales in the NPD tracked Consumer Electronics categories declined 2.5 percent, in line with our domestic comparable sales decline of 2 percent.”
?How Renew Blue is helping
Joly outlined five points in the Renew Blue plan meant to improve the electronics chain’s sales and enhance its omnichannel presence, according to the Dallas Business Journal. The publication listed his ideas:
- The first step is to enhance the consumer experience through offering perks and developing an advanced multichannel shopping network.
- Next is to attract leaders and employees who can drive transformation and produce results.
- Collaborate with vendors to drive change and increase value.
- Cut wasteful costs and grow revenue in order to improve return on invested capital.
- The final point is to contribute through recycling and providing teens with access to technology.
And the plan has made real gains for the company since its implementation, ZDNet noted. The chain has been leveraging its store inventory online and providing reps with the capability to view products within its distribution center. Best buy has also taken to selling returned goods online in order to streamline the company further. The plan has thus far resulted in annualized cost reductions of $900 million.Back To Blog