Big-ticket items and super-sized screens may save brick and mortar stores — or at least Best Buy.
Best Buy is the belle of the retail ball this week, having posted shockingly good figures for first quarter sales. Stock in the store climbed 11 percent, pushing the growth this year to close to 20 percent and setting a new high for the store.
Best Buy hasn’t enjoyed this much growth since the pre-iPhone days of 2006.
According to CEO Hubert Joly, Best Buy credits this growth to mobile phones and gaming:
Compared to expectations going into the quarter, our revenue was higher due to strong performance in gaming, a better-than-expected result in mobile, and the improvement of overall sales trends due to the arrival of delayed federal tax refund checks.
Which very may well be true. Best Buy does particularly well with the selling of physical mobile phones and their mobile sales i.e. sales through their mobile-friendly website are up 23 percent.
Still, some analysts believe something else may be at play, related more broadly to the products Best Buy sells. And this X factor may also be why Best Buy is not only competing well in sales, but getting shoppers into their physical stores as well.
The theory goes like this.
Most people are going to Best Buy for big purchases, both physically large and expensive. Large-screen TVs, smartphones, personal computers are all an investment of at least a couple hundred dollars. Then you have washers, dryers, refrigerators, which are both expensive and cumbersome. As the theory goes, most people don’t trust having expensive and/or cumbersome items delivered to their front porch or apartment lobby without damage. Moreover, they don’t want the hassle of having to figure out how to return the product if it does arrive damaged. On the other hand, MarketWatch reports that about 70 percent of Americans live within 15 minutes of a Best Buy
In-store pick-up, then, is Best Buy’s low-key coup. Plus, there’s the opportunity for the soft up-sell — phone cases, additional cords, TV stands and so on.
Of course, Best Buy isn’t the only place offering in-store pick-up, but if these reports are to be believed, they may be the one capitalizing on it best.