The future of Best Buy: Selling home gyms, e-bikes and grills
It adds merchandise to stores in dedicated sections, such as Hydrow and NordicTrack home gym equipment, Super 73 and Segway e-bikes and scooters, and Weber outdoor barbecue grills.
Best Buy is betting it can move into those areas smoothly as more consumers use technology for activities like working out and commuting during the pandemic.
“We are expanding our addressable market by entering new categories in areas such as healthcare and e-bikes that are being disrupted by technology,” CEO Corie Barry said during an investor presentation on Thursday. “Forty percent of Americans are using digital technology or the internet in new or different ways than before the pandemic.”
At the same time, the company plans to close 20 to 30 stores a year over the next three years as it tackles the trend of its customers to buy more online. Best Buy has approximately 1,000 stores in North America.
The company’s sales surged during the pandemic as stuck-at-home consumers bought electronics for their home offices, home gyms and living rooms. But sales are slowing.
Last quarter, sales fell 2.6%, including a worrying 11.2% decline online. Sales of mobile phones, games and tablets have all declined.
The company also expects sales to decline by up to 4% in 2022. After stocking up for the past two years, many consumers have already purchased most of the electronics they need, while others are cutting back on spending due to rising prices, analysts said.
Nearly 40% of Best Buy’s business now comes from online sales, nearly double what it was before the pandemic. Best Buy is increasingly using its stores to ship online orders to customers’ homes.
“We remain optimistic about Best Buy,” retail analyst Neil Saunders said in a note to clients Thursday. “It’s a solid, well-run company with a clear vision. However, there’s no denying that it’s now in a more difficult situation.”