Best Buy's omnichannel efforts pay off in Q1
Consumer electronics chain Best Buy closed out Q1 2015 with better than expected results thanks to a combination of product and strategy.
On the product side, strong consumer demand for smartphones and large screen TVs helped float Best Buy's US revenue to $7.9 billion. Best Buy gave a pointed hat tip to sales of "iconic mobile phones," most likely a reference to Apple's latest iPhones and new Galaxy products from Samsung.
But the strategy side of the coin is where Best Buy is really succeeding. Best Buy has invested heavily into its reinvention efforts, revealing last quarter plans to spend more than $100 million in fiscal 2016 to bolster its marketing, information technology, and customer experience initiatives for online and brick-and-mortar.
In a statement regarding today's first quarter results, Best Buy CEO Hubert Joly said merchandising, marketing and operational execution "were the tactical drivers of our better-than-expected first quarter financial results."
But circling back to that three-tiered investment strategy, Joly credited Best Buy's omnichannel efforts to merge in-store and digital operations as "what has allowed us to consistently outperform the market."
But Best Buy's story wasn't always one worth boasting. Just a few years ago Best Buy was in a dangerous slump, hit like so many other retail chains by the rise of online shopping and a consumer determination to find bargain basement deals.
Those two mitigating factors created the overly buzzed about phenomenon known as showrooming -- where shoppers test out products in a store only to buy them somewhere else online for a cheaper price -- and Best Buy found itself bleeding sales to discount rivals.
Things started to take a turn when Joly took helm of Best Buy in 2012. Proving himself to be a progressive and agile leader, Joly made the online and mobile channels a priority for investment and innovation. Best Buy has since opened a technology development center in Seattle to support its e-commerce platform and mobile user experience.
In addition to its internal technology renovation, Best Buy is also investing in its ability to respond to waves in the consumer electronics product cycle.
"We are also confident that we are executing against the right investment strategy that will allow us to capitalize on key technology waves and customer-experience opportunities to build sustainable long-term shareholder value," Joly said in today's earnings release.
If Best Buy continues to surprise in both earnings and innovation, the electronics seller just might end up as one of the greatest success stories in retail 2.0.