Is ‘Building the New Blue’ the right plan to complete Best Buy’s transformation?
In recent years, Best Buy turned its business in a positive direction by executing on the tactics that comprised its “Renew Blue” strategic vision. Now, the consumer electronics chain is in the initial stages of its “Building the New Blue” growth strategy and early results are encouraging.
Hubert Joly, CEO of Best Buy, has developed a three-fold strategy playing up the chain’s in-store, online and in-home assets to set it apart from the competition. Best Buy reported a comparable sales increase of 1.6 percent in the first quarter with online sales jumping 22.5 percent. Online sales represented 13 percent of the company’s U.S. revenues, up from 10.6 percent in the same quarter in 2016.
Mr. Joly discussed the initial progress the company has made on delivering on the “New Blue” plan. Among the initiatives is a greater focus on mobile devices and building sales through an improved multichannel shopping experience.
“The smartphone industry has significantly changed over the past few years, especially with installment billing plans, unlimited data plans and the proliferation of prepaid and unlocked devices. This can make shopping for a smartphone confusing and complicated,” said Mr. Joly (via Seeking Alpha). “We are improving the experience on bestbuy.com and revamping the mobile departments in many of our stores to create a better, easier, more seamless shopping experience for customers.”
Mr. Joly said early results are positive in mobile, with the recent launch of the new Samsung Galaxy 8 Android phones as evidence.
“We simplified the buying experience and provided clarity of carrier offers and ease of phone selection and saw our highest ever Android preorders,” said Mr. Joly. “This initiative will include other enhancements such as improvements to the phone activation process, the addition of more specially trained mobile associates and new vendor displays.”
“Mobile 2020,” as Best Buy calls it, will be in several hundred stores by year’s end. One of the new features are menu boards, similar to those found in fast-food restaurants, that are set up to help customers understand their options and see the latest promotions.
- Best Buy reports better than expected First Quarter Revenue and Profit – Best Buy Co., Inc.
- Best Buy’s CEO Hubert Joly on Q1 2018 Results (Earnings Call Transcript) – Seeking Alpha
- Best Buy Aims To Simplify Smartphone Shopping – Best Buy Co., Inc.
DISCUSSION QUESTIONS: Do you think Best Buy is on the right track to transforming the company into a retail business that will succeed over the long haul? What do you think Best Buy has done right in recent years? Where do you see opportunities for further improvement?