In its latest master class of how a brick-and-mortar retailer can thrive in the Amazon.com era, Best Buy (BBY)reported a blockbuster holiday season quarter on Wednesday, sending shares up 16%.
The electronics retailer said comparable sales, which include store-generated and online revenue, rose 3% in the quarter ended February 2, their eighth straight quarter of growth, showing Best Buy has found the way to carve a big place for itself with today’s shoppers. Best Buy did get an assist from the popular “Fortnite” videogame, which led to a surge in headphones and accessories sales.
But the company has been helping itself for several years now, reinventing its stores as service centers, opening more shop-in-shops with key brands, diving into the smart home market, and matching prices. That has included more technical support and offering in-home advisors for technically challenging installations, all making it less reliant on new product releases, many of which customers can get on Amazon anyway.
What’s more, Best Buy has worked hard to retool stores so they can help ship online orders (digital is now 22% of company sales) or serve as pick-up centers, services for which it is seen as a leader among physical chains.
Best Buy CEO Hubert Joly also teased some upcoming, deeper moves by the chain into digital health, with more details expected at the company’s investor day later this year, and said he expects a boost from 5G down the road.
“All of our channels are growing,” Joly told reporters on a media call. “We continue to see a favorable consumer environment.” Indeed: for the current fiscal year, Best Buy expects comparable sales to rise 0.5% to 2.5%.