Best Buy's online sales more than triple in a surprise corona-comeback
The Return of the Geek Squad... While Amazon (the Regina George of Retail) was thriving, Best Buy (Cady Heron) was struggling when virus lockdowns hit. Best Buy's sales plunged 30% from March 21-April 15, after it was forced to close its ~1K stores and go curbside-only. It furloughed 51K of its 125K workers and cut pay for top execs. But Cady got her glow-up in the end...
- +242%: Best Buy's online sales more than 3X'd compared to the same quarter last year, its biggest digital growth ever.
- $432M: Best Buy's profit nearly doubled to $432M and sales jumped 6%. But the stock sank after the news because its CEO said growth is unlikely to continue at the same pace.
Best Buy wasn't expecting this... It brought back 60% of its furloughed employees to deal with the WFH/school-from-home demand rush. Its supply chain is currently running at "holiday level" — good luck getting a Chromebook or freezer on its website. But Best Buy was prepared on the most important front: digital.
- As the threat from Amazon (aka Regina) intensified over the years, old-school retailers like Target and Walmart spent heavily to build online clout. Think: ecommerce apps, delivery, and warehouses.
- Before the pandemic, Best Buy had already invested in curbside and delivery to compete with Amazon. That paid off big when the pandemic hit.
Small-box losses = big box wins... Big retailers have digital strategies and cash stashes to survive/thrive mid-pandemic. Smaller businesses don't. Walmart, Amazon, Target, Home Depot, Lowe’s and Costco made up a whopping 29% of all US retail sales in the 2nd quarter. Meanwhile, over 60K small business permanently shut from March 1-July 25, according to Yelp. 60% of large company CEOs are “more confident” now in the growth of their companies than they were pre-COVID. Less sales for small retailers means more for big ones.