Best Buy's e-commerce has pulled out of slide (BBY)
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Best Buy has announced results for its fiscal Q3 2019 (ended November 3, 2018), revealing that it brought in $9.6 billion in revenue, an increase of 2.9% year-over-year (YoY).
The company also saw comparable sales growth of 4.3% YoY, and while this is a slight drop from fiscal Q2 2019 when comparable sales grew 6.2% YoY, it is steady with fiscal Q3 2018’s annual growth of 4.4%. On a positive note, the retailer’s digital sales rose 12.6% YoY — an acceleration from its fiscal Q2 2019 that ends a slide that lasted for four consecutive quarters.
The company's seeing very positive signs for its shipping and omnichannel efforts, which may have spurred e-commerce purchases in the past quarter. Best Buy had a successful quarter as far as fast shipping is concerned, delivering around 80% of small packages in two days and almost one-third of them next-day, CEO Hubert Joly said in an earnings call.
Additionally, it saw a high level of adoption for its buy online pickup in-store (BOPIS) option, with over 40% of online revenue being picked up in stores. This figure represents the seventh straight quarter of growth for BOPIS, and if Best Buy can keep the trend going, it may help cut last-mile delivery costs, which would be a major benefit if it's getting more e-commerce orders to fulfill.
Meanwhile, the Best Buy app has also been updated with new functionality to enhance the in-store experience with digital tools. New features include the ability to scan items for quick product comparisons, one that makes it easier to find open-box and preowned items online and in-store, and an “On My Way” feature that shoppers can use to tell a store they're coming to pick up a large purchase, thus reducing their potential wait time.
On top of this, Best Buy noted that 72% of the customers who use its app come into the store with an item in their online cart, so it added a feature that can notify them if a product in their cart is available in the store they're at. All of these features will cater well to the large percentagesof consumers who use their smartphones for a variety of functions while shopping in-store.
Best Buy is also making its Total Tech Support program giftable to bring more consumers into its ecosystem during the holidays. Total Tech Support is Best Buy’s subscription service that provides Geek Squad support via any channel for any device, and the retailer is now allowing shoppers to gift it to other people.
This may be attractive to customers who want to give electronics to friends or family but don’t want to have to help with setup or support. For Best Buy, the gifting option could help it reach customers who don’t even know the service exists. And once people have been gifted a subscription to Total Tech Support, they may find that they like the service enough to renew it in the future.
SEE ALSO: How brick-and-mortar retailers can bring personalization in-store to compete with e-tailers