Best Buy Digs Out Of Its Hole By Investing In Big Trends
Best Buy (NYSE:BBY), which has been little slow in responding to intensifying competition and shifting consumer trends, has refocused its resources on several initiatives. With the dominance of the online retailers like Amazon (NASDAQ:AMZN) and eBay (NASDAQ:EBAY), the dynamics of the retail industry are undergoing a rapid change. Other brick and mortal retailers like Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) have adapted to this change and are fiercely adopting new technology and modifying their operations in accordance with changing customer tastes.
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Recently launched initiatives:
Focus on Online streaming
- Best Buy’s online streaming service, CinemaNow, has announced a new multi-year agreement in Canada for Disney motion-picture films. [1] Other competing retailers are also trying to grab a share of the growing online movie streaming market which is presently dominated by Netflix (NASDQ:NFLX). For instance, Wal-Mart is focusing on rolling out Vudu, its online movie streaming service that it bought in 2010, in a big way internationally. (See our previous post: Walmart’s Vudu Ready To Hit The Road Internationally)
- Best Buy’s large customer base and global presence could play a key role in introducing CinemaNow to prospective customers. This service has the potential to be a significant revenue contributor for the consumer electronics retailer in the coming years.
Investment in workforce training
- In order to stay abreast of the competitors, Best Buy has decided to invest in its workforce by way of better training. This initiative is aimed at improving customer service experience for its customers. It has increased the allocation of its training budget and plans to train about 50,000 employees by the end of this year. (See our previous post: Best Buy Wants To Fight Showrooming With Improved Service)
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Expansion into cloud services
- Best Buy has recently acquired White Glove Technologies, a Texas-based managed IT services provider (MSP), in an effort to strengthen its presence in the cloud services industry and expand its managed IT services in Texas.
- In 2011, Best Buy initially forayed into the growing MSP market for small and midsize companies, which is worth $40 billion, by acquiring mindSHIFT for $167 million. [2]
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Notes:- Best Buy’s CinemaNow to begin streaming Disney movies online in Canada, Financial Post [↩]
- Best Buy Buys Into Cloud With mindSHIFT, Forbes, November 7, 2011 [↩]