Best Buy, the consumer electronics retailer, has unveiled new plans to reverse its two-year sales slump and capitalize on the replacement cycle of pandemic-era purchases and a wave of innovation. The company aims to enhance the store experience and technology offerings, which customers have said have lost their sparkle. Best Buy intends to add trained sales teams, create more YouTube videos, and launch a marketing campaign with a fresh tagline, “Imagine that.” CEO Corie Barry emphasized the importance of bringing newness back into the stores. One of the key strategies to drive sales is the introduction of artificial intelligence-enabled laptops and smartphones.
Although Best Buy expects a slow recovery in sales, there are signs of optimism. In the past two quarters, laptop sales have been higher compared to the previous year, indicating the start of a replacement and upgrade cycle. Additionally, during Amazon’s Prime event, consumer electronics purchases contributed to record-breaking sales of $14.2 billion across U.S. retailers’ websites, suggesting a shift in consumer behavior from last year’s focus on essential items. Best Buy hopes to leverage these trends by partnering with vendors like Apple, Samsung, and Microsoft, who have recently announced new product launches. These innovations are expected to generate excitement and drive customer traffic to Best Buy stores.
To improve the customer experience, Best Buy plans to focus on more than just technical specifications. Instead, store employees will help customers understand how products can save them time or make their lives easier. Experiential displays will showcase products like Tesla chargers, GoPro video equipment, and Lovesac’s furniture. Best Buy will also create dedicated teams for computing, appliances, and home theater areas of the store, where customers often need support. They will highlight unique features of products that customers may not be aware of. The company is also enhancing its app by introducing a personalized home screen, a “Discover” tab, and alerts for wish-listed items on sale.
Best Buy’s marketing strategy for the back-to-school season includes an advertising campaign featuring a “spokeshologram” named Gram. The company aims to differentiate itself by focusing on what makes it unique and bringing the “What if?” question to life for customers. Despite these efforts, Best Buy plans to reduce its capital expenditures this year, indicating a tighter budget. However, CEO Corie Barry believes that the company’s existing workforce, supplemented by employees from vendors, will be able to implement the customer-focused strategy effectively.
Best Buy has faced several challenges in recent years, including consumers cutting back on pricier purchases like smartphones due to rising everyday costs. Slower turnover in the housing market and a lack of game-changing tech advancements during the pandemic have also impacted sales. The company has had to compete on price and sell similar devices as competitors like Amazon and Walmart. However, consumer electronics spending has increased by 5% compared to the pre-pandemic period in 2019. Higher prices of computers, TVs, and other items have contributed to this growth.
Looking ahead, the back-to-school and holiday seasons are expected to be the biggest sales periods for consumer electronics. Best Buy remains hopeful that its customer-focused strategy and partnerships with innovative vendors will help drive sales and reverse the sales slump. Although there are challenges to overcome, such as uncertainty in consumer behavior and market trends, analysts believe that Best Buy has the potential for a pivot to growth. By adapting its store experience, focusing on customer needs, and showcasing innovative products, Best Buy aims to regain its sparkle and position itself as a leader in the consumer electronics market.
