Best Buy, in its Q3 2024 financial result, has indicated that digital strategy is a cornerstone of its business operations, contributing significantly to revenue and customer engagement.
Stepping up focus on investment in digital transformation is critical for Best Buy because the retail chain has faced 1 percent drop in domestic online revenue to $2.73 billion in Q3. Best Buy’s online revenue was 31.4 percent of total domestic revenue in Q3 2024 versus 30.6 percent last year, indicating that customers are spending on buying their products on digital platforms.
Digital focus
Best Buy, which is in the process of closing down several retail stores and modifications, has enhanced omnichannel operations. As a result, online sales contribution has reached $2.7 billion in Q3, accounting for 31 percent of domestic revenue.
Best Buy, as part of its rapid fulfillment plans for better customer experience, ensured that almost 60 percent of packages are delivered or available for pickup within one day.
Best Buy has also increased customer pickup: Approximately 45 percent of digital sales are picked up in-store, with over 90 percent available within 30 minutes.
Best Buy is betting on YouTube channel for inspiring buyers. Best Buy’s video team has created more than 30 videos to help customers discover must-have tech this holiday season on Best Buy YouTube channel.
AI
Best Buy is giving importance for enhancing customer support. Best Buy is using an AI-powered virtual assistant that can help 60 percent of chat users without the need for a live customer support person. Best Buy started rolling out the AI capability to IVR phone system to offer answers to customers’ questions without waiting for live agents.
Best Buy is also using text analytics to create real-time alerts directing to a potential operational or promotional issue. Best Buy has started using AI-driven truck routing for optimization of in-home delivery and installation. Best Buy did not reveal the name of its AI technology partner.
“We are observing feedback as we implement these capabilities to ensure we are maintaining a good experience for our customers. We are seeing customer satisfaction improvements in our call center experiences,” Corie Sue Barry, Chief Executive Officer of Best Buy, said.
Best Buy is also focusing on reverse supply chain capability to drive efficiency and savings. Best Buy said the launch of a new online section for open-box, refurbished, and clearance items has driven material sales growth.
Digital Features
Best Buy has made improvements in mobile app for ensuring enhanced personalization, digital wallet, deal alerts, streamlined checkout, and faster content loading times. These updates have led to improved customer ratings and increased app engagement, driving higher spending.
A live, to-the-minute ETA tracking feature for deliveries and installations has seen strong engagement (60 percent) and high customer satisfaction (90 percent+ five-star ratings).
Best Buy customers can choose a specific two-hour delivery window, offering greater convenience and control.
Best Buy team believes that combining physical outlet expansion with online capabilities will enhance customer access to discounted products.
Store refreshes prioritize mobile devices, monitors, and digital imaging to improve customer experience and sales performance.
Best Buy says its enterprise capital expenditures for fiscal 2025 will be about $50 million lower than last year at approximately $750 million.
Modular merchandising solutions enable frequent updates to showcase emerging technologies and branded stages for products.
Best Buy leverages its investments in AI, customer data, and employee training to sharpen the customer experience and drive profitability in a challenging retail environment. These efforts are reflected in strong performance metrics, such as improved NPS, increased app engagement, and operational cost savings.
By evolving its digital platforms and integrating them seamlessly with in-store experiences, Best Buy remains a leader in delivering value through innovation and operational excellence. Best Buy does not reveal its investment in digital transformation that drives its online sales via digital platforms. But it is stepping up its activities in digital transformation.
Baburajan Kizhakedath
