Best Buy Gets into Fighting Shape for E-Commerce Expansion

by Trefis Team
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Like all other retailers, Best Buy (NYSE:BBY) is also working hard to remain competitive in the online market. Technological revolution and increasing online penetration has revolutionized the consumer retail industry. Best Buy has been working toward growing its share of the e-commerce market. As part of this effort, it is rebuilding its internal IT team over the course of next 12 months and plans to hire approximately 200 IT professionals. Best Buy competes with general retailers like Wal-Mart (NYSE:WMT) and Costco (NASDAQ:COST) as well as specialty retailers like Radio Shack (NYSE:RSH) and GameStop (NYSE:GME).

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How Best Buy is Coping With Competition?

Best Buy has taken a series of initiatives in the recent past to attract customers and boost traffic.

Here are a few of them:

  • Best Buy recently hired Stephen Gillett, former Starbucks’ (NASDAQ:SBUX) CIO, who played an instrumental role in revamping Starbucks online operations. He would be in charge of Best Buy’s digital business, including its online stores. We believe this move is inspired by Best Buy’s plan to increase its share in the growing e-commerce market.
  • Last November, Best Buy acquired mindSHIFT, a Massachusetts-based cloud service provider, to get access to the $40 billion managed service provider (MSP) market for small and midsize companies. [1] This is expected to have synergies with the Best Buy Geek Squad.
  • Best Buy has also launched a third-party market place to offer online products from other sellers in exchange for a cut from the proceeds. Third-party sellers including Buy.com, Mambate, SF Planet, ANT Online, BeachAudio.com and Wayfair have signed up for the platform.

We are optimistic about Best Buy’s efforts that are aimed specifically at boosting its online sales, which has become an important revenue driver for all retailers today.

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Notes:
  1. Best Buy Buys Into Cloud With mindSHIFT, Forbes, November 7, 2011 []
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  • commented 1 years ago
  • tags: SBUX GME WMT BBY RSH
  • This is the worst experience of buying a product in my entire life. Traveled 30 miles to purchase a hard drive ,at which time they were out of. They told me they could order it i would have it in a couple of days,took a week. I ask the sales rep. what if it was the wrong one said I could return it to store . Another 30 miles to store. they said i had to mail it back to the place they ordered it I had to pay the shipping . After 120 miles of driving paying shipping charges . And still haven't received a refund on hard drive . Best Buy did not tell me they were ordering from a third party . Now I have to drive another 60 to receive that when they get notice. WoW I could have just stoped at Game stop, or Wal mart .