Reinventing Best Buy

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Reinventing Best Buy

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Publication Date:
March 31, 2016

Industry:
Retail & Consumer Goods

Industry:
Arts & Culture

Industry:
Technology

Industry:
Consumer Electronics

Industry:
Media

Industry:
Telecommunications

Industry:
Sports

Source:
Harvard Business School

On March 1, 2017, Best Buy Company, Inc., North America’s largest retailer of consumer electronics and appliances, announced a third year of comparable-store sales increases and a 20.8% increase in domestic comparable online sales. These results were in marked contrast to four years of declining comparable-store sales from 2010 through 2013. The stock price rose 17% in March, and on April 20, 2017, it surpassed $50 for the first time since January 2008. When CEO Hubert Joly took over in September 2012, Best Buy was losing share to Amazon.com, which was encouraging consumers to view products at Best Buy and other physical stores and then buy them for a lower price online, a practice known as “showrooming.” Undaunted, Joly had encouraged the practice, convinced that it presented an opportunity to sell to customers as long as Best Buy’s prices were competitive. Joly had committed the company to a multi-channel strategy in North America and exited struggling international operations. Operating margins had increased as a result, but growth was still proving elusive. In early 2017, Joly announced that his “Renew Blue” turnaround effort was complete and that he was now intent on creating the New Blue. Would the new strategy be enough to stop Amazon’s advances?

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Reinventing Best Buy

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