Best Buy’s online sales in the US more than doubled during the pandemic, marking a turning point in the retailer’s history.
Best Buy’s investment in digital technology has paid off well during the pandemic. The company has experienced enormous growth in its net revenues from the digital channels in the United States market. Its share of revenues from online channels in the US (its domestic and largest market) grew 144% (2.44x) compared to the previous year.
Best Buy is among the leading retail brands based in the United States. It sells merchandise and services categorized into six main segments. The largest segment of merchandise the company sells is computing and mobile phones. The second-largest merchandise segment based on net revenues is consumer electronics, followed by appliances. The computing and mobile phones segment accounted for 46% of the company’s sales in fiscal 2021. (Fiscal year at Best Buy ends in January like Walmart).
The year of the pandemic was also the year of the digital for retail brands. According to Best Buy’s annual report, the company overnight turned itself into a largely digital business. The pandemic marked a turning point in its history. At last, its investments in information technology have paid off. Best Buy enjoyed strong growth in online sales in the United States, and its overall net revenues also grew.
The United States is the largest market of Best Buy. The company has divided its business into domestic and international segments. The international segment of its business included Mexico and Canada. In the third quarter of fiscal 2021, the company decided to exit the Mexican market, and it will have carried out the final steps in this direction by the end of fiscal 2022.
Even in fiscal 2022, Best Buy is enjoying growth in digital sales and higher traffic on its digital sales channels. The company’s online sales in the United States grew 7.6% in the first quarter of fiscal 2022 compared to the same period during the previous year. The company generated $3,596 million in net revenues from US online sales in the first quarter of fiscal 2022, compared to $3,342 million during the same period in the previous year.
The table here shows best Buy’s online sales revenue over the previous 5 years:
|Year||Online Revenue ($mn)|
Digital transformation at retailers like Best Buy has accelerated during the pandemic. While its e-commerce revenue has grown steadily over the first four years, the company’s online sales more than doubled compared to the previous year during the pandemic. These trends are here to stay, and digital channels are expected to continue to remain a leading source of sales and revenues for retail brands in the future. In August 2020, the company expanded its partnership with Google Cloud through a new multi-year agreement. Best Buy uses Google’s cloud and analytics capabilities to deliver a superior customer experience along its online shopping channels. The retailer uses AI, digital technology, and analytics to deliver a more personalized shopping experience to its customers in the US and Canada.