My BestBuy.com Connects With Shoppers In a Big Way

Last June when Best Buy announced it was overhauling BestBuy.com and integrating it with its Rewards Zone loyalty program, one of RetailWire’s BrainTrust referred to the move as "a no-brainer and long overdue."

Go on BestBuy.com today and you’ll discover the company claim that it is reinventing Rewards Zone with "My Best Buy," a new program introduced last month that promises more rewards, exclusive deals and perks associated with using its mobile app.

The consumer electronics chain’s increased emphasis on its digital business appears to be paying dividends. According to Internet Retailer, BestBuy.com sales increased 10.5 percent in its fiscal second quarter.

In a conference call in August to discuss the company’s latest results, Huber Joly, CEO of Best Buy, said the company was focusing on several initiatives heading into the Christmas selling season. Among these were "optimization of site navigation, including the rapid narrowing of search results through drop-down editing"; an online display of in-store clearance items as well as open-box inventory; new product buying guides; the addition of new marketplace partners; and enhancement of Best Buy’s buy online, pick up in store experience by making it easy to add service plans to the purchase before entering the store.

my best buy still

According to Bloomberg News, BestBuy.com gets roughly one billion visitors to its site every year. Only one in 100 actually make a purchase. By turning more visitors into buyers, Best Buy CEO Hubert Joly expects to grow the company’s share of consumer electronics sold online from seven percent to 18 percent — the same percentage held by the chain in the brick & mortar market.

BrainTrust

Discussion Questions

What is your assessment of the progress Best Buy has made with its e-commerce program this year? What do you see as the major challenges BestBuy.com will need to address to meet its market share goals?

Poll

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Mark Heckman
Mark Heckman
10 years ago

Best Buy, like all electronics retailers have the formidable task of attempting to re-structure their business after margins and sales of flat screen TVs went “flat” and the DVD-CD music business “left the building” and went to online downloads.

Re-inventing one’s self after two of the most prominent categories collapse translates into creating new categories and services that foster more frequent visits (online and in-store). Best Buy’s efforts in energizing their loyalty program is a nice start. Further, using the customer database effectively to match products and offers to shoppers and anticipating their needs is the next logical step in building shopper loyalty and market share.

E-commerce in the electronics space has much more room to grow. Unlike fresh foods and other more visceral “touch and feel” commodities, the features and benefits of most electronic items can be very effectively showcased online. Building specific, relevant and compelling reward offers into their MyBestBuy program can be a strong piece of their future success, if done thoughtfully and better than Amazon, hhGregg, and others who are aggressively playing in this space.

Chris Petersen, PhD
Chris Petersen, PhD
10 years ago

With the increasing acceleration of mobile and omni-channel shoppers, Best Buy has no choice but to make BestBuy.com a success. BestBuy.com has to do more than just increase sales, it needs to be a critical seamless bridge between online and in store experience.

BestBuy.com has made progress in the overall consumer experience across channels. Best Buy online and off appears more seamless and integrated today. Given the tremendous growth of mobile shoppers and Best Buy’s ongoing challenge with consumers “showrooming,” the Best Buy mobile app is perhaps the most significant improvement, and critical success factor in their overall strategy.

The biggest challenge for Best Buy right now is their low conversion rate. Measuring e-commerce success with sales growth is particularly dangerous given all of the price matching and promotional offers. Best Buy can NOT afford to win a race to the bottom with Amazon, Newegg or Walmart.com At the end of the day it is gross margin dollars that pay the bills … not sales revenue.

Anne Howe
Anne Howe
10 years ago

This action from Best Buy signals not just an investment in digital technology, but a long overdue investment in adapting to consumer behavior. Having experienced the lack of web/store integration on more than one occasion, I’m excited to get back in synch with Best Buy as a shopper.

I give Mr. Joly a thumbs-up and have said before that his background in the hospitality sector gives him a great sense of how to serve the customer first. I expect bigger and better things from Best Buy in the future!

Camille P. Schuster, Ph.D.
Camille P. Schuster, Ph.D.
10 years ago

I can not really assess the new program because I have not switched yet. When I got the information from Best Buy about the Rewards program switching I groaned and put the information in a stack of stuff to deal with later. I had just finally gotten my enrollment in the Rewards program to work and was not interested in going through the work to switch again. At some point I will.

If navigation, information, and real time communication is made easier, that would be great and consumer response will support the change. However, Best Buy needs to make sure the new system works better than the old one, continues to provide a seamless experience, and continues to increase functionality as the rest of the world changes. Being a close follower will be fine – being a leader would be great – being a laggard will be a problem.

Ryan Mathews
Ryan Mathews
10 years ago

Steps in the right direction made (at best) in the nick of time, although the jury is still out on that one.

Jason Goldberg
Jason Goldberg
10 years ago

I suspect/hope that we are only seen the first step in a major evolution of BestBuy.com. Integrating the loyalty program into the shopping experience (versus making it a separate experience with it’s own website) is certainly a good practice. But that alone is not going to double the conversion rate at BestBuy.com.

They do have a very real challenge. They aren’t going to be a better version of Amazon in terms of assortment and transactional efficiency (you can’t out Amazon, Amazon), so they are going to have to come up with a experiential shopping element that enough consumers want. There are still some really smart people there and a significant revenue stream to fund innovation, so I’m eager to see what they come up with.

Shilpa Rao
Shilpa Rao
10 years ago

This season is make or break for Best Buy. The progress is good, but is it good enough to get the growth? We’ll have to wait and see.