Fulfillment Is Key for Best Buy

Press enter to search
Close search
Open Menu

Fulfillment Is Key for Best Buy

By Jamie Grill-Goodman - 12/01/2020

From RIS News, Nov. 30:

Best Buy has expanded its store fulfillment strategies in recent months as digital sales increase.

Best Buy is “pleased” with the progress of 250 ship-from-store hub locations it piloted in September, CEO Corie Barry said on the retailer’s recent earnings call. So pleased that Best Buy is adding around 90 more ship-from-store hub locations for the holiday period.

“All our stores will continue to ship online orders, but these locations are positioned to ship out significantly more volume and utilize dedicated labor aimed at fulfilling orders originating online,” Barry explained. “These locations required minimal capital investment as we had the technology in place and were chosen due to their available warehouse space and proximity to carrier partners.”

Best Buy expects these 340 locations will ship more than 70% of its ship-from-store units during its fourth quarter. The hub model allows Best Buy to extend the online order cut-off to 8 p.m. for next day delivery.

Barry noted that Best Buy is also testing new store formats to assess its hypothesis of using stores more as primary fulfillment hubs. In four Minneapolis stores, Best Buy reduced the shoppable square footage to approximately 15,000 square feet down from around 27,000. The product assortment on the sales floor is still the same as before the test remodel, but the merchandised SKU count is reduced, focusing on the most popular items.

“The remodels will result in incremental space for staging product for in-store pickup and to support ship-from-store transactions as well as provide the ability to stage inventory for items that may not be on the sales floor,” Barry said. “In one of the four locations, we are utilizing some of the available space to increase the previous allocation to our Geek Squad business. Normally, we would not remodel any stores this close to the holiday season, but we feel it’s imperative to move quickly to gain the learnings about how the store format may complement our omnichannel strategy within a particular market. In another store pilot, we are testing the financial return of reorienting the location of the store warehouse to be adjacent to a new covered drive-up curbside experience and lockers.”

Best Buy’s domestic online revenue of $3.82 billion increased 173% on a comparable basis, and as a percentage of total domestic revenue, online revenue increased to approximately 35% versus 15% last year, it reported for its Q3 FY21.

View full article on RIS News.