Many retailers have adapted and evolved in the wake of the coronavirus pandemic. But few have done so as well as consumer electronics name Best Buy (NYSE:BBY).
Last quarter's numbers point in that direction. Same-store sales improved 5.8% year over year despite coronavirus-related shutdowns, and companywide revenue grew 4% for the three-month stretch ending in June. That's impressive, particularly given the circumstances.
Where the retailer has proven truly impressive, however, is beyond the numbers. Best Buy took a methodical, well-reasoned approach in its response to tricky situations and applied solutions that will continue to work after COVID-19 is in the rearview mirror.
Image source: Getty Images.
"Good enough" isn't good enough
Most consumer-facing companies took various actions in response to the pandemic. Walmart melded its grocery shopping app with its platform that sells goods from the rest of the store to encourage curbside pickup. Target expanded its curbside pickup offering too. Kroger configured its stores to help facilitate social distancing.
Best Buy has done relatively more though, leaning on consumer data not heavily utilized by other retailers.
This wasn't entirely clear until the company's second-quarter conference call on Tuesday of this week. That's when CEO Corie Barry fleshed out some of the initiatives the company put in place beginning in March.
Perhaps the most important one was adapting each store's operations and operating hours to optimize each particular location. The company made a point of using actual information to do so. Barry explained during the call, "We are leveraging localized data and analytics that allow us to pilot various services like opening stores an hour earlier for consultations only," adding that "using data and analytics also allows us to quickly and productively customize operations to the local situation if necessary."
That's in contrast to responses from Walmart or Kroger, which largely steered their stores into a uniform response.
Barry is taking what the company learned in the recent past into the future too. All stores will now fulfill some online orders, but around 250 stores will handle significantly more online orders based on their geography. Those stores are the ones close to a major delivery hub, which allows the retailer to make good on its one-day shipping promise of certain items. To do this most effectively, though, Best Buy has to know where the bulk of its orders are coming from and where they're going to. It also has to know where online orders aren't robust and don't merit further investment.
Best Buy was also able to introduce virtual in-home consultations as early as April, helping people tackle tough tech problems at a time when a wide swath of Americans were suddenly working from home. The program has continued to expand. For customer consultations handled locally, the electronics retailer invested time and money to make them as effective as possible.
Barry noted during the quarterly call: "We are building the foundation by leading our store employees through skills-based training for their existing roles. Over time, there will be opportunities for employees to gain additional skill sets and be able to fulfill multiple roles." Best Buy is equipped to make that extra learning pay off too. In February -- and for a second year in a row -- Training magazine ranked Best Buy's employee training the third-best in the world.
The company even went as far as to analyze when traffic from online store pickup orders was heaviest, and adapted accordingly.
Best Buy is just better
On the surface these are just measures Best Buy took in response to COVID-19 because... well, every retailer was forced to put its best foot forward at a tough time. Of course Best Buy's response looks a little different from Walmart's, which looks a little different from Target's.
Barry wasn't content with the most obvious adaptations, however. Though she only took the helm a little over a year ago, she knew enough in the early days of COVID-19 to identify opportunities to cultivate more than just quick and temporary solutions. She turned up the heat on the use of technology and data, and utilized existing employee knowledge in a way that perhaps most retailers wouldn't, or couldn't.
In that same vein, this trying time has revealed something of an overlooked asset for the company. That is, Best Buy's employees were quick to adapt, finding ways to make curbside pickup work at their particular stores, and switching gears to work as call center personal or chat online with customers seeking assistance.
The thing is, these little things aren't actually so little. Best Buy is now better prepared than most for anything else that may lie ahead.
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August 27, 2020 at 11:30PM
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