The Best Buy Strategy Shift: What it Means for CE Retail
Though they said their latest earnings report produced “better than expected results,” Best Buy’s Q4 2016 wasn’t an ideal ending to the year. In a statement, the leader in consumer electronics retailing said significant constraints on its product availability during the holiday season contributed to a 1 percent year-over-year revenue decline during the quarter.
Best Buy did see significant increases in e-commerce sales—the channel great 18 percent for the quarter and contributed 19 percent of total domestic revenue—but the increased focus on omnichannel efforts appeared to hinder the company’s overall performance. Specifically, the improved online efforts resulted in inventory issues at stores around the country. Low inventory issues, the company said, led to an estimated $200 million in lost revenue.
Other contributors to the downturn included a weak quarter for gaming, and the Samsung Galaxy Note7 recall (which contributed another $200 million in lost revenue, according to Best Buy).