In an investment presentation, Best Buy highlighted the progress made on its Building the New Blue growth strategy, detailing how it plans to move forward with the initiative, with an emphasis on customer relationships and “winning the home,” as well as discussing the company’s long-term financial outlook.
In both products and services offered, Best Buy executives said the company will focus on its ability to develop customer relationships and, as one significant element, put an emphasis on helping consumers integrate relevant technology into their homes.
In its presentation, Best Buy executives noted that the company is reaching its Building the New Blue goals, expanding services and advancing toward its objective of becoming a recognized advisor on domestic technology. Indeed, company CEO Corie Barry said that Best Buy intends to become, in effect, the chief technology officer for the consumer’s home. In doing so, the company is taking critical considerations such as health, a concern that it has been investing to address including through its Best Buy Health initiative, and leveraging its capabilities, as in helping seniors retire in place comfortably and confidently.
Barry kicked off the presentation by outlining the next phase of the company’s strategy, dubbed Building the New Blue: Chapter Two. She said that the strategy leverages Best Buy’s ability to combine “tech and touch” to enrich lives through technology. It will do so by using technology and high-touch models to meet everyday human needs. By building more and deeper relationships, Best Buy can effectively leverage its unique assets such as high-quality in-store customer interaction, the company noted.
The company communicated four key takeaways that demonstrates how it will better serve existing customers and capture new demand:
- Leverage deeper analytics and the company’s unique assets to increase brand “love” and grow significant relationships at all touchpoints with customers at the market level.
- Win the home through Best Buy efforts to create more significant relationships using the expertise, people, processes and technology that have been a point of investment.
- Promote paid and free memberships oriented around customer connection to drive significant relationship growth.
- Build on fresh ways to capture demand, from new vendor partnerships, including with tech giants, to the company’s lease-to-own purchasing option.
Best Buy will invest to drive top- and bottom-line growth in support of its Building the New Blue: Chapter Two strategy, while remaining committed to creating efficiencies that help fund these investments and offset potential pressures.
In taking a long term view, Best Buy proposed financial targets for fiscal 2025 that include enterprise revenue of $50 billion as compared to the company’s current fiscal 2020 guidance of $43.1 billion to $43.6 billion with non-GAAP operating income rate of 5%, compared to the company’s current fiscal 2020 guidance of flat to slightly up from fiscal 2019’s 4.6% non-GAAP operating income rate. The targets also include $1 billion of additional cost reductions and efficiencies.