Need to Know
- Best Buy has reported its best quarterly digital sales increase ever, boosting online sales 242% from last year.
- The retailer cites the growth of online sales due to the pandemic, as well as customers’ access to stimulus checks.
- In total, 53% of Best Buy’s sales this quarter came through digital channels, compared to 16% this time last year.
- The surge in sales has helped Best Buy reach over $9 billion in revenue this year.
Best Buy has reported its best-ever quarterly increase in digital sales, citing a year-over-year jump of 242% in online sales alone. Online sales accounted for more than half of total domestic revenue for Best Buy’s second quarter.
Like many other companies right now, Best Buy credits the jump in online sales to the coronavirus pandemic causing many customers to shop online instead of in-store. This quarter, online sales contributed 53% of domestic revenue, as opposed to 16% last year.
The tech retailer shared that nearly every merchandise category grew in the second quarter, with computing, tablets and appliances leading the charge.
Best Buy CEO Corie Barry suggested that pandemic-related stimulus checks could also be contributing to an uptick in sales this quarter.
“The stimulus provides a level of confidence and a backdrop against which customers feel like they have purchasing and spending power,” she said. A lack of stimulus, on the other hand, “may only underscore the heightened levels of unemployment.”
Best Buy’s first quarter, set amid the initial onset of the global COVID-19 pandemic, also saw an uptick of 155% in online sales, largely due to the increased use of delivery and curbside pickup when stores were first shuttered.
Chief Financial Officer Matt Bilunas warned that the same level of gains are unlikely to be made in the third quarter, and cautioned that Best Buy will have higher expenses next quarter as stores continue to re-open.
“Overall, as we plan for the back half of the year, we continue to weigh many factors including potential future government stimulus actions, the current shift in personal consumption expenditures from areas like travel and dining out, the possible depth and duration of the pandemic, the risk of higher unemployment over time, and the availability of inventory to match customer demand,” Bilunas said.
In recent years, Best Buy has evolved from a technology retailer to a “total retail” concept, focusing on everything from houseware to healthcare and is partnering with leading brands like Salesforce to stay on top of customer interactions.
The evolution and ability to pivot during a crisis seems to be working: Best Buy reported second-quarter net income of $432 million with overall revenue rising to $9.91 billion.