Will Americans invite Best Buy into their backyards?
Best Buy has been among the biggest beneficiaries of the stay-at-home trend that developed since the novel coronavirus pandemic broke out in 2020. The retailer’s leadership believes that Americans will stick with the behavior even as the threat from COVID-19 decreases and, as per its announcement earlier this week, is moving into product categories (grills, patio furniture and lawn equipment) not normally associated with a consumer electronics chain.
Why should consumers purchase grills from Best Buy rather than the stores where they have typically bought them? The retailer claims that its “expertise in delivery and on-site assembly” puts it in the position of ensuring “a great experience throughout the entire process” for its customers. The chain will include free delivery and on-site assembly of select grills when customers purchase $100 or more of grilling accessories. It is also offering to haul away old grills for $29.99 during its stops at customers’ homes.
Best Buy CEO Corie Barry said on the retailer’s first quarter earnings call that she and her team expect Americans “to be living some hybrid life for the foreseeable future” with a large percentage of daily activities, including work, education and entertainment, taking place at home. She said that there is “real demand for the continued innovation” and Best Buy is focused on delivering the products and services that meet these consumer needs.
The consumer electronics giant’s move into outdoor lifestyle categories may be seen by some as traveling outside its lane. Does Best Buy’s move reflect that it is somehow losing focus and straying from its core competency or does it represent a logical extension of its business to drive greater revenues, market share and profitability?
The retail industry has plenty of examples of companies moving into new product categories, with some achieving success and others falling short.
Amazon.com has come a long way from its bookselling days and today offers the greatest selection of merchandise under the sun.
J.C. Penney, under former CEO Marvin Ellison, moved into the major appliance category only to get out of the business shortly after his departure to Lowe’s.
Mr. Ellison has taken a similar approach at the home improvement retailer. Lowe’s sold products such as air hockey tables, bedding, exercise equipment, small appliances and other products to its customers during the Christmas holiday season.
- Outdoor Living – Best Buy
- Best Buy kicks off summer with expanded outdoor living products, new lineup from TUMI – Best Buy
- Best Buy (BBY) Q1 2022 Earnings Call Transcript – The Motley Fool
- J.C. Penney dumps appliances – RetailWire
- Will Lowe’s customers ‘gift’ their homes for the holidays? – RetailWire
DISCUSSION QUESTIONS: Is Best Buy’s push into outdoor living products a keen business move or does it represent a loss of strategic focus? What are the keys to success for retailers moving into new product categories currently occupied by strong competitors?