When consumers think of purchasing electronics, there are high chances that they’ll check with Best Buy before making a final decision. Thus, most customers often wonder how Best Buy rose to be the largest consumer electronics retailer in the US.
This query raises the question, what is Best Buy’s business model? I wondered about the same thing, so I decided to research all there is to know about Best Buy and its business model. Here’s what I found out!
What Is Best Buy’s Business Model In 2022?
Best Buy’s business model is a retailing model that deals with consumers’ electronics as of 2022. The company drives its sales by the establishment of 1,000 brick-and-mortar stores as well as programs accessible through online platforms. Moreover, the company doesn’t limit its sales to electronic products but includes maintenance and repair services.
If you want to find more information on Best Buy’s business model, how it works, its strategies, and much more, keep reading!
How Does Best Buy’s Business Model Work?
Best Buy’s business model relies on electronics and technology products, services, and solutions.
According to this business model, the company provides products and goods to customers visiting its brick-and-mortar stores, engaging with Geek Squad agents, or using the company’s online platforms.
At Best Buy, customers can receive a wide range of consumer electronic products, including:
- Home appliances
- Mobile phones
- Video games
- And much more!
Ideally, Best Buy’s business model serves domestic and international business segments with operations in the US, Mexico, and Canada.
Further, the domestic segment comprises Best Buy’s operations in the US under various brand names, including:
- Best Buy
- Best Buy Mobile
- Best Buy Direct
- Best Buy Express
- Magnolia Home Theatre
- Geek Squad
- Pacific Kitchen & Home
On the other hand, Best Buy’s international segment includes operations in Mexico and Canada under brands such as:
- Best Buy
- Best Buy Mobile
- Best Buy Express
- Geek Squad.
To go into more detail, the following business units support these business segments:
Best Buy Physical Stores
Best Buy prides itself with more than 1,000 stores and 100,000 employees in the US, Mexico, and Canada.
At these stores, customers can walk in and get a wide variety of consumer electronics.
Also, Best Buy physical stores support those who prefer curbside pick-ups and in-store consultations.
Best Buy Online Platforms
Best Buy consumers can get a wide variety of consumer electronics through Best Buy’s websites, official app, and the recently launched Blue Shirt Chat.
That said, Best Buy’s official website allows customers to search for an item through a vast display of available items, select their preferred items and place an order.
Further, the company’s website makes shopping easier by highlighting the Top Deals, Deal of the Day, and other suggestions based on the customer’s searches.
On top of that, Best Buy’s official app is its stand-alone app that allows customers to scroll through products, select their preferred product and place an order.
In addition to Best Buy’s app and official website, Best Buy recently launched the Blue Shirt Chat tool that connects customers with in-store associates for inquiries and assistance.
Geek Squad Services
Additionally, Best Buy offers maintenance and repair services through its subsidiary, Geek Squad Inc.
With that, Best Buy’s Geek Squad employees offer customers services in-store, on-site (for instance, at home or an institution), and over the internet through remote assistance.
Also, while Geek Squad initially dealt with computer-related problems, it currently diagnoses issues and repairs all electronics.
That said, Geek Squad agents offer services such as setting up appliances, installation, protection plans, repairs, and customer support.
What Is Best Buy’s Business Strategy?
Best Buy’s business model strategizes on being the leading electronics store in the US, Mexico, and Canada.
Moreover, the retail store has devised the following strategies that boost the company’s business model:
Dominating The Market
Best Buy’s strategy of solely dealing with electronic products and services has immensely boosted the company’s business model.
For example, the company has expanded its electronic operations beyond the US, with stores in Mexico and Canada.
Due to this strategy, the company has become one of the world’s largest and dominant electronic retailers.
Best Buy supports its business model by exploiting lucrative opportunities such as strategic acquisitions.
For instance, Best Buy acquired GreatCall in 2018 to strengthen the company’s position and growth opportunities within the rapidly-changing health sector.
Furthermore, Best Buy acquired Critical Signal Technologies to provide aging populations with remote patient monitoring services.
Essentially, both acquisitions helped Best Buy connect consumers with social care experts who aim to meet individual needs.
Excellent Customer Service
Best Buy has been known to be a customer-centric store that’s committed to customer satisfaction.
For example, the store is dedicated to understanding customer challenges and devising strategies for providing practical solutions.
Best Buy is a store that encourages its customers to stay longer and ultimately act on their impulses. By staying longer, they end up spending more money.
Also, it couples up its in-store shopping with eCommerce strategies that boost both online and in-store sales.
Unique BOPIS (Buy-Online-Pickup-In-Store) Mix
Best Buy has heavily strategized on a unique BOPIS mix. For instance, online orders at Best Buy are shipped from the stores directly.
Also, 93% of online return requests are completed at the stores.
Additionally, it launched pick-up points at CVS and UPS locations to support easier pick-up for online customers. That said, the unique mix caused an increase of Best Buy’s BOPIS by 40%.
Apart from offering customers a wide range of electronics from notable brands, Best Buy offers customers products from its brands, including Modal, Pacific Sales, Insignia, and Magnolia.
Is Best Buy Still Profitable?
Yes, Best Buy runs and maintains a profitable business model. During the last financial year, the company’s revenue increased by 8.3% compared to the figures realized in the previous year.
Further, a surge in online shopping increased Best Buy’s revenue by $47 billion during the last financial period.
In conclusion, Best Buy bases its business model on consumers’ electronics retailing.
That said, the company offers electronic products via online and physical stores and integrates the business with unique services provided by Geek Squad agents.
As a result, customers can get both electronic products and professional support through Best Buy.