On taking over the reins at Best Buy, Hubert Joly started working in the stores to get the feel of the company.This stood him in good stead to transform the company and challenge their competitors, Sears, Target, Walmart, Amazon and other consumer electronics retailers.
The company’s recent results are evidence of this. Best Buy’s last year’s domestic sales declined by 1.2% during the fourth quarter, and the year prior to that, it dropped by 1.4%. The prediction, with all the new plans, is that it will experience a 2% to 3% increase during this year’s fourth quarter, due to flexible pricing to challenge Amazon’s lower prices. This tactic has been labeled ‘Renew Blue Transformation’ by Mr. Joly.
On Thanksgiving, associates are due to hand out tickets two hours prior to the store opening time at 5pm. This ensures that the ticket holders have access to the best bargains. They are also offering a policy of meeting the lower price of competitors. Stores will continue trading until 1am, to reopen again at 8am on Black Friday.
According to the third quarter results released recently, its comparable domestic sales increased by 3.2% and online sales increased by a whopping 21.6%. The only decline they experienced was in the international section, with a 3% drop in comparable sales. During the first two quarters, international and domestic sectors had comparable sales. Its fully diluted earnings rose from $0.12 to $0.30 during the quarter.
Mr. Joly has made many changes. The cost reduction program placed another $65m to the cumulative amount of $965m for the quarter. The improved results were boosted by lower costs linked to damages and returns and improved efficiency in stores and the supply chain. His focus for the holiday season is being placed on expert service, unbeatable prices and being able to ship to customers from 1400 stores.
Best Buy now runs 1475 stores in the US and 468 in Canada and Mexico. The most recent quarter saw consumer electronics sales account for 29% of overall sales, mobile phones and computing 49%, appliances 8%, entertainment 7% and services 7%. Entertainment saw the best increase at 16.6%, along with entertainment at 5.7%. Mobile phones and computing increased by 3.2% and consumer electronics by 3.1%.
Best Buy is prepared for a great holiday season with its new exciting stores and service.