Best Buy, the popular electronics retailer, has set its sights on achieving revenue of $41.3 billion to $42.6 billion for the fiscal year 2025 and imrove operational efficiency with technology investment.
Best Buy, in a bid to streamline operations and bolster efficiency, has announced plans to enhance its digital presence significantly. Brian Tilzer, serving as the Chief Digital, Analytics, and Technology Officer, is at the helm of this strategic initiative.
The company disclosed that its capital expenditures (Capex) for the upcoming fiscal year will range from $750 million to $800 million. Notably, there will be a decline of approximately $50 million in Capex within the United States, the domestic market, due to investments in store portfolio and reduction in technology spending. Although specific details regarding technology investment remain undisclosed by Best Buy.
During the fourth quarter of fiscal 2024, Best Buy achieved a notable milestone with digital sales constituting 38 percent of its total domestic sales. Total domestic sales during this period reached $13.410 billion, indicating that online sales in the United States alone amounted to $5.095 billion in the fourth quarter.
The retail company maintained a consistent rate of 44 percent for in-store pickups of online orders during this quarter. Furthermore, efforts to improve delivery speeds were evident, with an expansion in the percentage of ship-to-home online orders delivered within two days.
Best Buy’s mobile application also received acclaim during the Black Friday shopping frenzy, securing the third position among shopping apps and the fourth position across all apps on Apple’s app store.
The retailer concluded the quarter and the fiscal year with 7 million members across its two-tiered My Best Buy paid memberships. Paid members demonstrated heightened levels of engagement and expenditure at Best Buy, indicating a favorable shift in spending away from competitors.
DIGITAL PLANS
Looking ahead to fiscal 2025, Best Buy plans to concentrate its capital investments on updating and refreshing existing stores rather than major remodels or new store openings. The focus will be on improving the merchandising presentation to align with the evolving landscape of digital shopping. Notable changes include the removal of physical media and updates to departments such as mobile, digital imaging, computing, tablets, and smart home products. Collaborations with vendors for branded in-store merchandise experiences are also on the agenda.
Moreover, Best Buy aims to leverage multi-skilled store associates and reinforce expertise in key categories like major appliances, home theater, and computing. The company plans to intensify category-specific training and certifications for employees, with the objective of enhancing customer experiences and driving higher revenue.
Best Buy says selling certifications create a better experience for customers as certified employees, on average, drive nearly 15 percent higher revenue per transaction and garner higher net promoter scores than a noncertified employee.
In line with its commitment to innovation, Best Buy intends to harness advanced technologies such as AI to optimize various aspects of its operations. Examples include using AI for efficient scheduling of in-home delivery and installation services, as well as streamlining customer service interactions to improve accuracy and reduce engagement time.
Furthermore, Best Buy is establishing a digital and technology hub in Bangalore, India, to access talent and resources more efficiently.
With a firm focus on operational effectiveness and efficiency, Best Buy aims to identify cost reductions to mitigate inflationary pressures and allocate resources for both new and existing initiatives in fiscal 2025. Through these strategic endeavors, Best Buy aims to maintain its position as a leader in the electronics retail industry while delivering exceptional value to its customers.
Rajani Baburajan
