Best Buy strengthens digital transformation! Strengthen multi-channel sales to improve customer experience!

Best Buy, a leading consumer electronics retailer with operations in the United States, Canada and Mexico, is stepping up its digital transformation initiatives with its technology partners after reporting a 10% drop in quarterly revenue to $10.587 billion and an operating margin of 3.4% for the third quarter from August to October 2022.

Best Buy's digital transformation investment is led by Brian Tilzer, Best Buy's Chief Digital, Analytics and Technology Officer. Responsible for information technology and digitalization to create a seamless and superior multi-channel customer experience to support the company's Best Buy 2020 growth strategy. Brian Tilzer joined Best Buy in 2018 after serving as Chief Digital Officer at CVS Health, the largest pharmacy healthcare provider in the United States, while leading Best Buy's enterprise data and analytics capabilities.

According to the latest financial report , the digital penetration rate of Best Buy's domestic sales is likely to remain above 30%. Best Buy has positioned itself to lead the future of retail because they believe that the future is controlled by the customer and bet on a seamless experience at all pickup points.

Online sales as a percentage of domestic revenues were 31% in the first nine months of the year, nearly double the pre-pandemic level, and are expected to start growing again over time. Best Buy has also seen increased customer demand for other virtual interactions; as a result, it has seen strong and sustained sales growth this year in chat, phone, and video selling experiences.

Best Buy has invested in technology to improve the in-store experience for customers and associates in a more cost-effective way. For example, Solution Sidekick is a new app designed specifically for associates that provides a consistent guided selling experience across departments, channels, and locations. Through the app, associates who interact with customers can instantly view the customer's profile, including historical purchases and active memberships. When associates begin placing orders using product recommendations, the app automatically calculates total savings for existing and prospective members and recommends other product solutions.

Solution Sidekick also helps drive sales. If a customer isn't ready to buy at a particular moment, employees can send them product recommendations and a recap of the conversation via email, text message, or QR code so they can buy later at their convenience. The app has been well received among employees and has worked well. According to a Best Buy spokesperson, employees earn more per transaction using Solution Sidekick than with traditional methods.

To further improve the customer experience, the company invested in electronic sign tags for products that are locked or not easily available on the shelf. The membership service Best Buy Totaltech is also gaining popularity for its innovations that help deepen relationships with customers. Totaltech provides 24/7 technical support, as well as several other benefits that improve the after-sales experience of technology products. Since its launch a year ago, Totaltech has been driving the membership behavior the company envisioned. The Net Promoter Score of Totaltech members has been much higher than that of non-members.

The huge demand for technology over the past three years has driven a larger installed base; Upgrade+ is powered by Citizens Pay. This new program allows Best Buy customers to purchase Mac notebooks and related accessories for a low monthly fee. After three years, buyers can trade in their old notebook for a new one and upgrade to the latest technology, just by continuing to pay a low monthly fee.

Best Buy is also actively looking at how they can continue to improve acquisition through digital channels. From an optimization perspective, they will improve procedures in a way that reduces the cost to serve. Best Buy plans to extensively utilize digital tools to develop a new 5,000 square foot store pilot in Charlotte. The company is also using a similar strategy in Canada and continues to see better than expected financial results. Some of these initiatives include technology subscriptions, online marketplaces, market-focused testing, and small store formats.

Learned that as online penetration grew, Best Buy adopted an omnichannel approach, encouraging customers to purchase using the multiple channels they offer, including home consultations, virtual channels, and physical stores.

Editor ✎Estella/

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