If Best Buy CEO Corie Barry is right, the pandemic has forever changed the way consumers shop. While online shopping had already cut into brick-and-mortar sales before COVID-19, the pandemic has accelerated this trend. Consequently, Best Buy is considering downsizing its 1,000-store footprint across the US and putting much greater emphasis on e-commerce. The consumer electronics retail giant is unfortunately laying off thousands of workers while also training some existing staff for new roles in a digital age.
As of January 30th, Best Buy’s workforce had been reduced by 17% to 102,000. At the same time, a number of Best Buy stores are seeing shoppable square footage cut in half, with only the most popular items taking up shelf space, with the rest of the floor space acting more as a primary fulfillment hub for e-commerce orders. Best Buy’s online sales in the US grew 89% to $6.7 billion in the fourth quarter, and accounted for 43% of its total revenues in the US.
Amid a pandemic when people are far less inclined to step inside a Best Buy store, Barry cited the company’s “supply chain expertise, flexible store operating model and ability to shift quickly to digital” as a major reason that comparable store sales grew 23% last November. Nevertheless, Best Buy faces an uphill battle against retail and e-commerce behemoths like Amazon, Walmart, and Target.
According to Interpret’s New Media Measure®, among consumers shopping for electronics, Amazon mostly held onto its loyal customers in the US last year, but Best Buy was down 4 percentage points in late 2020 and the electronics retailer trailed both Walmart and Target by a considerable margin.