- In its latest earnings results, Best Buy’s domestic comparable online sales jumped 242%.
- “The customer is in charge, so this isn’t about being seamless across channels, it’s about being seamless for the customer,” CEO Corie Barry told analysts.
- Barry said that computing, appliances and tablets that help consumers “work, learn, connect, and cook at home” helped drive sales growth.
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Best Buy saw its domestic comparable online sales spike by 242% in the second quarter, as the electronics retailer’s omnichannel strength successfully cancelled out headwinds from the coronavirus pandemic.
During Tuesday’s earnings call, CEO Corie Barry told analysts that the strong online gains “highlight our ability to harness our digital first mindset.” By comparison, the tech-focused retailer’s total comparable sales increased 5.8% year-over-year.
“Products that help people work, learn, connect and cook at home, like computing, appliances and tablets, were the largest drivers of our sales growth for the quarter,” Barry said in a statement. “Trends across most categories and services improved materially throughout Q2 as we opened our stores more broadly for shopping, especially categories like large appliances and home theatre that benefit from more experiential shopping.”
Barry told analysts that categories like digital health and fitness and outdoor activities also saw strong ecommerce demand.
Early in the quarter, Best Buy faced major setbacks in the form of mass store closures, employee furloughs, and an inventory constraint in a number of categories. In May, the chain began opening up its stores to customers via an appointment system. Best Buy also pushed curbside pickup options in response to the pandemic.
Moody’s Vice President and Senior Credit Officer Charlie O’Shea said that Best Buy did incur “increased fulfillment and distribution costs” that led to a dent in profit. However, the company’s success indicated “that there is a significant essential and non-discretionary component to its merchandise mix.”
“Best Buy’s Q2 was impressive on all counts, with revenues eclipsing Q2 2019 despite significant in-store shopping limitations as the company unleashed the power of its multi-channel capability, with online sales up around 240%,” Moody’s Vice-President and senior credit officer Charlie O’Shea said in a statement.
On June 15, Best Buy opened up 800 stores, and subsequently dropped its appointment-only requirement. Now, Barry said most of Best Buy’s locations are up and running.
Barry also noted to analysts that many of the changes pertaining to ecommerce and omnichannel shopping were in the works prior to the pandemic.
“Customer shopping behaviour has changed permanently,” Barry said. “The customer is in charge, so this isn’t about being seamless across channels, it’s about being seamless for the customer.”
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