For a long time, Best Buy has maintained its position above other notable retailers such as Walmart, TigerDirect, and Target in the consumer electronics industry of America.
Despite such tough competition, how has Best Buy upheld a strong brand image in the electronics industry? Read on to learn about Best Buy’s 9 competitive advantages!
Best Buy Competitive Advantages (9 Factors)
1. Market Dominance
Founded in 1966 by Richard Michael Schulze and James Wheel, Best Buy started as a store specializing in audio products before progressing to a household electronics store in 1983.
Since the foundation of Best Buy, the firm has specialized in the business operations of household electronics and has become one of America’s largest electronic stores.
Due to its expertise in electronics retail, Best Buy has gained a significant market share within the electronic industry, eventually dominating the U.S., Canada, and Mexico markets.
2. Innovative Sale-Service Strategy
Apart from selling household electronics, Best Buy bridges the gap of lack of information and knowledge by offering a reliable support team with details on different electronic brands.
A consumer can seek expert consultations from Best Buy’s support team to gain more insight into an electronic brand’s details before deciding what to buy.
The information gained from the electronic experts goes a long way toward providing a comparison tool that will result in customer satisfaction.
As a result, Best Buy attracts more customers who want to learn product information before buying a specific electronic item.
3. Tech Support Subscription Service
Best Buy offers customers a reliable Total Tech Subscription Service, which provides unlimited support and services for an annual subscription of $199.9.
Through this subscription service, Best Buy’s Geek Squad has gained popularity across the United States for providing quality installation and repair services for all electronics.
Additionally, the service is available for all consumers who purchased their electronics at Best Buy and any consumer needing tech services.
This allows Best Buy to build long-term customer relationships and creates a unique selling proposition for the electronics retail store.
4. Development Of Strategic Acquisitions
In recent years, Best Buy has exploited lucrative market opportunities by making several strategic acquisitions.
For instance, in 2018, Best Buy acquired Great Call and further managed to acquire its toolkit Critical Signal Technologies in 2019.
These strategic acquisitions have enabled the giant retail company, Best Buy, to enter into the senior wealth sector faster than competitors within the retail industry.
As a result, Best Buy has managed to attract more consumers, which increases the company’s competitive advantage in the electronic retail industry.
5. Incorporation Of Online And Brick-And-Mortar Operations
Best Buy has heavily invested in online and physical operations, unlike some giant competitors like Amazon Inc.
Along with that, it also extends its services to in-house calls for customers who need extensive services such as installations and repairs.
To further cement its physical and online presence, Best Buy has devised strategies that push sales, such as investing in an extensive distribution center network.
This network quickly replenishes products in Best Buy’s stores and offers easier and faster shipping to online shoppers.
In addition, the efficiency of services on Best Buy’s online platforms has attracted the store’s preference to other competitors within the industry.
For instance, Best Buy provides customers with mobile functionality that alerts stores when a customer is on their way to pick up a large item, helping save the customer time.
As a result, Best Buy continues to gain authority in both online and physical electronic retail markets.
6. Reliable And Efficient Customer Service
Best Buy’s reliable customer service team enables customers to access products and services through Best Buy employees or members of the Geek Squad.
Consumers can submit queries on different electronic products and subsequently expect fast and reliable solutions.
This way, customers who receive trustworthy solutions from the customer service team are more likely to make several returns to the same store and refer other consumers to the store.
7. Reliable BOPIS (Buy-Online-Pickup-in-store) Mix
A unique and reliable BOPIS (Buy Online Pickup In-Store) mix sets Best Buy above other retailers.
With the increasing preference for online shopping, all Best Buy’s stores have warmed up to ship products to customers from across the United States.
In addition to this, most of Best Buy’s online returns are completed at the stores, with 93% of all return requests being handled by the extensive network of stores.
The retailer has also launched several CVS (Consumer Value Stores) and UPS (United Parcel Services) locations for online orders to increase the efficiency of online shopping.
This incorporation of online and offline shopping has created a compelling and unique mix, leading to a 40% increase of Best Buy’s BOPIS (Buy-Online-Pickup-In-store).
8. Intensive Cost Management
The effective and efficient cost management at Best Buy has led to a tremendous increase in the general earnings of the electronics retailer since 2017.
Along with that, Best Buy’s interest expenses have decreased from $72 million to $64 million from 2017 to 2020.
During this time, other retailers have been struggling with the constant rise of costs.
The decrease in interest expenses witnessed in the three years proves Best Buy has strategized effective cost management.
9. Strong Market Presence
Best Buy has claimed a strong market presence by establishing 1159 worldwide stores, with 1036 stores spread across the US.
The strong market presence helps Best Buy to generate more profit and has enabled its sales to increase by 37.2% by the first quarter of 2021.
With the high number of stores in the US, the domestic market has become the most significant contributor to Best Buy’s gross revenue.
If you want to know about Best Buy, you might also be interested in reading up on Best Buy’s target market, some interesting Best Buy statistics, and whether or not Best Buy is a franchise.
Best Buy has enjoyed the monopoly of being a retail store that majors on the sale of electronics for decades.
The uniqueness in the mode of operations seen through its innovative sales strategies and effective cost management has been one of the most prevalent competitive advantages of Best Buy.
As a result, most consumers are warming up to the idea of getting all their electronic needs from a one-stop shop, i.e. Best Buy.