Best Buy’s success is in part due to their commitment of being a one-stop shop for customers that are looking for high-end products.
Despite the tough competition from the likes of Target and Walmart, how does Best Buy manage to uphold a strong brand image in the electronics industry? We have analyzed the various factors that contribute to this strength and come up with the following factors.
Best Buy Competitive Advantages (9 Factors) In 2022
1. Market Dominance
In the year 1966, Richard Michael Schulze and James Wheel started buying their electronics stuff from Radio Shack, the other electronics store in Chicago, and decided to start their own store instead.
Since they opened in 1955, Best Buy has been specializing in electronics and has become one of America’s largest electronic stores.
As a result of their expertise in electronics retail, Best Buy gained a strong market share within the electronic industry and eventually dominated the markets of the U.S., Canada, and Mexico.
2. Innovative Sale-Service Strategy
As a consumer electronics company, Best Buy provides users with information about product specifications, buying guides, and reviews on different electronic brands.
Consumers can also seek advice from Best Buy’s support team to gain more insight into the details of an electronic brand before making their final decision.
Information gathered about consumers from the analysis of electronic records can be used to create a customer satisfaction tool that will result in customer satisfaction.
Because of that, Best Buy attracts more customers who want to learn product information before buying a specific electronics item.
3. Tech Support Subscription Service
When you want to buy your favorite devices, you will get every thing in one place for home entertainment center.
Through this subscription service, Best Buy’s Geek Squad has gained popularity across the United States for providing quality installation, repair and service for all electronic products.
Well, Apple has already acknowledged that the new policy was to make them treat the iPhone as just another device on your Apple ID.
It is a way to get customers to purchase services which Best Buy provides over time and thus build a long-term relationship with the customer.
4. Development Of Strategic Acquisitions
Best Buy has made several acquisitions lately and will be expanding the retail business by acquiring existing stores.
The idea behind this is to make the process of acquiring Critical Signal Technologies as easy as possible for Best Buy.
This acquisition has allowed Best Buy to enter the senior wealth market more quickly than most other big box retailers.
The decision to close the stores has strengthened Best Buy’s position as an industry leader. As a result, the company has been able to retain consumers who were formerly shopping at Best Buy, and to attract new individuals.
5. Incorporation Of Online And Brick-And-Mortar Operations
Best Buy is trying to have a good mix of online and physical store. Unlike Amazon, Best Buy doesn’t have a big warehouse.
When customers have phone or internet bills that are very high, they can easily contact in-house calls to make the bills more manageable.
In order to further cement its physical and online presence, Best Buy has decided to invest in its local distribution centers.
Amazon’s acquisition of Whole Foods was the first step in Amazon’s plan to make a retail behemoth.
The reason why Best Buy has this advantage is that it has been using the online retail space for quite a long time.
The retailer is able to send a message to its stores, if the product is being picked up. This saves the customer’s time from getting in and out of the store, helping them to save time.
Best Buy gets even more power and authority in both the online and physical retail stores.
6. Reliable And Efficient Customer Service
The Geek Squad is a group of people who provide services for Best Buy that enable customers to access products and services through Best Buy employees or members of the Geek Squad.
Consumers can use mobile apps to submit queries on different products and subsequently expect fast and reliable solutions.
This way, customers who receive trustworthy solutions from the customer service team are more likely to recommend your store to other consumers.
7. Reliable BOPIS (Buy-Online-Pickup-in-store) Mix
BestBuy sets itself apart from other retailers by offering the “Buy Online Pickup In-Store” service at the best prices.
Best Buy’s website allowed customers to check whether their orders would arrive on time and within the promised time and shipping rate.
Furthermore, the company has invested in their technology for quick return fulfillment. For any online return, Best Buy’s technology can detect any relevant store associates and alert them to the transaction. This helps in the process of facilitating quick return fulfillment.
Walmart has also begun selling online and has recently expanded to several other products, such as clothing to increase the efficiency of online shopping.
Best Buy has been able to offer high levels of convenience in shopping online and picking up items in person. This combination of convenience has resulted in a significant increase in the number of purchases made by Best Buy’s BOPIS customers.
8. Intensive Cost Management
The efficiency of management at the electronics store led to a tremendous increase in its general earnings.
With fewer expenses, Best Buy’s profit margin increased from 4.2% to 5.3%, and that has also impacted its stock price.
Stores like Walmart have been forced to cut back on their prices in order to make up for lost sales.
Based on the financial data, Best Buy has been a savvy cost manager and one of the main reasons why the company has been able to maintain its position as a market leader.
9. Strong Market Presence
In the year, 2017, Best Buy has claimed a stronger market presence by establishing 1159 stores, with 1036 stores spread across the US.
Since the COVID-19 pandemic, the market has seen a strong demand for home appliances and electronics items as people are buying items to protect themselves and their families. Best Buy is one of the few companies that are able to supply these goods in a reasonable amount of time.
With around 1,900 stores in the U.S, Best Buy’s gross revenue is mainly based on sales in the domestic market.
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Best Buy has had this monopoly of being a retail store that primarily carries electronics for decades.
Although the company had faced certain difficulties related to its strategic decisions during the last few years, it has made a huge comeback and is now one of the best-known brands in the electronics retailing and consumer electronics industry.
Because of that, most consumers would like Best Buy to be their one-stop shop for all electronic needs.
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