Best Buy, Macy's Expand Same-Day Delivery To Speed Holiday Sales

Laura Heller , CONTRIBUTOR

SCHAUMBURG, IL - JULY 20: A sign marks the location of a Best Buy store on July 20, 2017 in Schaumburg, Illinois. Sears Holdings Inc. announced today that it had agreed to sell Kenmore appliances on Amazon.com. The news sent Sears' stock price climbing and triggered heavy selling of stock in other appliance retailers including, Home Depot, Best Buy and Lowes. (Photo by Scott Olson/Getty Images)

Best Buy and Macy's are expanding same-day delivery services in advance of the holiday season as it seems the battle for Christmas will be waged by one-hour delivery drivers. 

Best Buy is tripling the number of metropolitan areas beginning next week with same-day delivery available in 27 metro areas. "We expect customers in nearly 40 cities to be eligible for the service by the holiday season," according to a company statement. 

Deliv, the third-party solution provider, is doubling its footprint with this announcement to 33 major markets (from 19) in 23 states and 1,400 cities, according to a company press release. Best Buy began testing same-day delivery in the Bay Area in late 2015, and expanded to Atlanta, Boston, Chicago, Dallas, Houston, Las Vegas, Los Angeles, Miami, New York, Philadelphia, Seattle and Washington, D.C., in 2016.

Beginning Sept. 6, same-day delivery will be available in Austin, Charlotte, Cincinnati, Columbus, Denver, Kansas City, Minneapolis/St. Paul, Orlando, Phoenix, Pittsburgh, Sacramento, San Antonio, San Diego and Tampa.

Ten more metro areas are expected to be added this fall.

Macy's also announced it will expand same-day delivery to 33 markets, an expansion of a program that began in 2014 and one that is long overdue, given the competition, namely Amazon.

In most cases, orders placed by 1 p.m will be eligible in these markets for same-day delivery, for a small fee. All will be delivered by a third party provider, in many (but not all) cases Deliv.

"Same-day delivery is quickly becoming table stakes across every retail segment. With Deliv, retailers can offer their customers that same exceptional level customer experience without the need to invest in their own asset-based delivery fleet," said Daphne Carmeli, CEO and founder of Deliv. "As retailers look to offer a consistent experience nationwide, they need a proven, trusted, national partner. Our expansion offers them the speed, flexibility, and broad national footprint needed to compete with the ever-growing force of Amazon."

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Best Buy deepens links to Apple, says watch has been a smash hit

by  

Phil Wahba

Best Buy CEO Hubert Joly said Apple Watch is off to a strong start and announced steps to deepen the tech giant’s presence in the retailer’s stores.

Best Buy  BBY 13.67%  continued its remarkable turnaround last quarter, with a big assist from Apple AAPL 5.76% .

The largest U.S. electronics retailer reported a rise in domestic comparable sales of 3.8% for the second quarter, well ahead of Wall Street’s expectations, and posted a better than expected profit. While Best Buy has helped its cause by cutting costs and adding floor space to growing categories like smart homes, home theaters, and shops-within-a-shop for top brands, it has also been getting a lot of help from Apple and its roster of red-hot products.

“Demand for Apple Watch has been so strong in the stores and online,” Best Buy CEO Hubert Joly told Wall Street analysts on a conference call. The retailer expects to be selling the device, which hit the market in June, at all of its 1,050 big-box stores by the end of September, he added. Initially, Best Buy hadplanned to have watches in 300 stores by the holiday season. (It started selling the watches in early August.) Apple did not provide specific sales numbers for the watch in its second-quarter earnings last month, but Best Buy’s comments provide more evidence of the device’s success.

Joly also announced steps that will deepen Best Buy’s relationship with Apple. It is currently updating its Apple shop-in-shops at 740 stores, including new fixtures and more display tables for phones, computers, and tablets. The work is already complete at 350 stores, and will be finished at another 170 in time for the key holiday season. He also said that Best Buy will begin selling AppleCare product service and support this quarter, and will start testing out being an authorized service provider at 50 stores.

Beyond Apple, there was a lot for investors to cheer: e-commerce sales grew by 17%, showing that Best Buy can hold its own against Walmart  WMT 2.28% , Target  TGT 2.23% , and Amazon.com  AMZN 4.90% , and suggests it has licked the “show rooming” phenomenon, where shoppers go to a store to browse and try products out, then buy them on Amazon, behavior that a few years ago led many to question Best Buy’s long term viability.

“The company continues to gain meaningful traction online and therefore enhance its formidable competitive position,” said Moody’s analyst Charlie O’Shea in a research note. Moody’s raised its credit rating on Best Buy to Baa1 on Monday.

And in a development that should worry Sears  SHLD 4.96% , Best Buy reported strong appliance sales, a key driver of its comparable sales jump.

Still, Best Buy sounded a note of caution about the current quarter, forecasting U.S. sales to be flat or grow by a low single-digit percentage rate.

As for all the stock market drama of late? The jury is still out on whether consumers will pull back.

“It is difficult to know, though, if the recent volatility in the financial markets will affect overall consumer spending,” Chief Financial Officer Sharon McCollam said in a statement. “To date, however, we have not seen a measurable impact versus our original expectations.”

Best Buy To Shutter Canadian Future Shop, Plow $160 Million Into Great White North

Samantha Sharf

Forbes Staff

Best Buy BBY +0.7% announced Saturday that it is consolidating its Canadian division. Its namesake brand and the Future Shop locations it acquired in 2001 will now all function under the Best Buy name.

Currently a large number of Future Shop and Best Buys are positioned side by side. As a result 66 Future Shop locations are being shut down for good. The other 65 Future Shop locations will be shuttered for one week to complete the transition. Once they reopen Best Buy will have 192 locations in the Great White North. (The electronics shop has 1,400 stores in the United States including smaller Best Buy Mobiles and a handful of locations in Mexico.)

“Currently, 80 per cent of our customers are within a 15 minute drive to a store and this won’t change,” said Ron Wilson, president of Best Buy Canada in a statement. Best Buy will continue to honor warranties from Future Shop as well as accept gift cards and returns.

As far as employees, about 1,500 jobs will lose their jobs as a result of the consolidation with part-time workers making up about 70% of those affected. Employees were told of the change at their weekly meeting Saturday, according to Citi analyst Kate McShane which is why the announcement came over the weekend.

Going forward Best Buy plans to invest up to $160 million in Canada to, among other goals, invest in its web store by making products from brick and motor shops available to customers across the country and make in store pick-up more widely available. Best Buy also says it plans on ”increasing our staffing levels.”

The company expects its full year earnings to take a 10 cent to 20 cent hit from the temporary bump in operational expenses associated with the consolidation. In Best Buy’s most recent fiscal year, ended January 31, 2015, the company earned $40.3 billion in revenue and had $3.53 in earnings per share.

The revenue figure was down from a year earlier because of a 12% decline in international sales. Although U.S. revenue grew slightly the international decline more than offset the gains. The company said the decline was driven in part by unfavorable currency exchange rates but also by lost revenue from store closures in Canada and a 4% Canadian sales decline “due to industry declines.”

Best Buy is hardly the first U.S. based retailer that has struggled to find its footing up north.

In January discount retailer Target TGT +0.71% announced in it was immediately shuttering its 133 Canadian locations and cutting 17,600 jobs there. The drastic move came less than four years after Target first announced plans to expand into Canada and less than two years after the company opened its first stores there.

In her note on the news McShane, however, pointed to Best Buy’s promise to invest heavily up north as a key difference between the two companies: “Unlike Target Canada which is closing all of its Canadian stores, [Best Buy] remains committed to staying in Canada and improving the business.”

In the first moments of trading Best Buy Shares were up as much as 1.3% to $38.97. Shares remained down slightly for they ear so far but up 46% year-over-year.

Best Buy is spending millions to maintain its sales momentum

by 

 

John Kell

Retailer is planning to spend $650 million to $700 million in the current fiscal year on capital expenditures, up from $550 million last year.

Can Best Buy maintain its momentum?

The electronics retailer on Tuesday said its U.S. same-store sales increased for two consecutive quarters — the first time that’s happened in nearly five years — and outlined plans to spend millions more to ensure it can maintain that growth rate.

The retailer, which reported a 77% jump in quarterly profit, is planning to spend $650 million to $700 million in the current fiscal year on capital expenditures, an increase from the $550 million it spent last year. It will spend more to improve the customer experience in brick-and-mortar retail stores and online, as well as on marketing and information technology. Supply chain and the way Best Buy handles returns and damaged goods are other areas of focus.

“To win, investing now is imperative,” Best Buy’s Chief Executive Hubert Joly told investors during a conference call.

Under Joly’s leadership, Best Buy  BBY 1.53%  has enacted a turnaround thanks to efforts to trim expenses, shed assets in Europe and China, and focus more on improving the business at home. It has achieved a lot of success against a tough backdrop: industry sales of desktop computers and printers have faltered, and online competitors such as Amazon.com  AMZN -0.55%  have made it harder for traditional retailers to compete. Peers like Circuit City and RadioShack have already fallen into bankruptcy.

However, Best Buy has made some interesting defensive moves. It has carved out space for “stores-within-a-store” formats focused on brands such as Samsung and Windows, and the retailer has also stocked more large appliances, including refrigerators and washers and dryers, that are more often bought at a store rather than online. Since Joly took over in 2012, Best Buy’s share price has doubled.

Joly warned that Best Buy’s operating income would face pressures in the current year as a result of the higher spending. He said the spending is needed to counter competitive and costly customer service expectations, such as free and faster shipping, and rapidly-declining selling prices in some key product categories.

Best Buy’s cautious commentary about the new year, which percolated throughout the conference call, was viewed as simply a ruse by some Wall Street observers.

“While management’s commentary was downbeat, we remind investors that Best Buy has a long history of ‘under-promising and over-delivering,'” said BB&T Capital Markets analyst Anthony Chukumba.

Best Buy Shareholders Got A Lump of Coal For Christmas Read more: Best Buy Announces Disappointing Earnings

By Christopher Matthews @crobmatthews

Best Buy announced Thursday morning that domestic same-store sales fell 0.9% over the holiday season, sending shares in the big-box retailer tumbling more than 25% in early trading. Same-store sales growth—or the change in revenue from existing stores—is a key metric for the retail industry because while new stores might grow revenue, the performance of existing stores is a predictor of what the company can achieve once no more stores can be built.

Investors had been optimistic about newly hired CEO Hubert Joly’s “Renew Blue” turnaround plan, which includes closing larger stores and opening smaller locations more focused on popular products like smart phones. Joly has also focused on turning its 1000-store base into distribution centers for its ramped-up online operation. Shares in Best Buy had increased 161 percent over the past year, as investors bought into the vision.

But with today’s earnings announcement, it appears that investors are at least starting to wonder about giving Best Buy the benefit of the doubt.

Read more: Best Buy Announces Disappointing Earnings | TIME.com http://business.time.com/2014/01/16/best-buy-announces-disappointing-earnings/#ixzz2qaRwbqjb

Best Buy Is Finally Fixing Its Awful Website

Best Buy is finally fixing its decade-old website.

The outdated site has kept the retailer from competing with Wal-Mart or Amazon, reports Chris Burritt at Bloomberg News. 

Best Buy CEO Hubert Joly is improving the website by implementing the "My Best Buy" rewards program and aggressively recruiting executives with experience in e-commerce, Burritt reports. 

The retailer is also adding product reviews and buying guides to the site and enabling recommendations for other items the customer might want to buy. 

"The efforts may already be helping, with Best Buy’s online traffic rising 9.9% in August from a year earlier," Burritt writes. 

Here's what the old site looked like: 

Best Buy

Here's the new site. Note the product reviews, additional photos, and special offers: 

Best Buy

Joly has managed to pull off a turnaround at Best Buy since he took over about a year ago. 

He successfully implemented a price-matching program that effectively killed the practice of "showrooming." He also cracked down on stores, cutting the retailer's annual expenses by $340 million. 

Best Buy's shares have tripled this year. 

SEE ALSO:  11 Dramatic Changes McDonald's Made This Year

Read more: http://www.businessinsider.com/best-buy-is-fixing-its-outdated-website-2013-10#ixzz2gaKt9ROK

Best Buy surges 13% on earnings

Best Buy's stock rallied Tuesday after the electronics retailer reported a substantial gain in quarterly earnings, helped by aggressive cost cutting.

Best Buy (BBY, Fortune 500) said earnings jumped to $266 million in the quarter ended Aug. 3, compared with $12 million in the year-ago quarter.

The company's stock jumped as much as 12.8% to $34.65. That helped it unseat Netflix (NFLX) as the S&P 500's top performer this year.

Chief Executive Hubert Joly said Best Buy cut $65 million in annualized costs. He said the company has managed to slash $390 million in nine months, as part of an effort to cut $725 million.

Looking ahead, Joly was a little cautious, noting that Best Buy has incurred some additional costs and an interruption in same store sales growth as it rolls out its new Samsung Experience Shops and Microsoft (MSFT,Fortune 500) Windows Stores. Same-store sales slipped 0.4% for the quarter, but Joly said they would have been flat to slightly higher if not for the Samsung roll-out.

Related: J.C. Penney posts big loss

Belus Capital Advisors chief equities strategist Brian Sozzi noted that Best Buy has made a big splash online, where same-store sales rose 10.5%.

"The sales number is even more impressive considering Best Buy's entirely new website won't launch until 2014, leading me to believe that price matching, and advertising of price matching, is closing the price perception gap with Amazon (AMZN, Fortune 500)," he said in a research note.

But Sozzi said Best Buy still has some work to do.

"Structurally Best Buy online is not where it has to be to compete effectively, and may be longer away from achieving financial awesomeness (yes, awesomeness)," he said. "For example, keywords on Google (GOOG, Fortune 500) for certain electronics bring up Best Buy on the dreaded ... second page. The team is actively working on improving its SEO." 

Can Best Buy Survive? Yes, If It Doesn't Forget To Fix Its Stores, Not Just Its Site

Best Buy BBY -1.07% is back in the news again.  Apparently it’s updating its web site to get on par with Amazon and other competitors selling consumer electronics and appliances.  While the company acknowledges it will take some time to get there, it has bigger issues in the terrestrial world.  The company has a LOT of stores and they have fallen into irrelevancy. New CEO Hubert Joly has certainly taken some steps to undo damage done over the past seven years, but there’s a lot more work to be done. I believe if the chain can’t return its stores to relevancy, it is in serious trouble. But on the flip side, if it can, it will ultimately survive and even thrive again.

To put it in perspective, Best Buy maintains a total of 2001 stores under several names, with 1,512 in the U.S. and another 489 around the world.  It’s unclear to me from reading the company’s store count whether or not it includes stand-alone kiosks in the count, but either way, that’s a lot of stores.  And while it’s easy to call those stores albatrosses around the company’s neck, I contend that it’s those very entities that hold the key to Best Buy’s potential success. And that success will not come by under-cutting Amazon.com AMZN -1.6%‘s prices by a few bucks.  It will come when Best Buy employees can actually provide REAL assistance to shoppers, and turn shoppers back into customers again. It will come when the stores are truly shoppable.

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It’s easy to cite poor or low investment in web site improvements, or the term that Best Buy made famous, “Showrooming” as the roots of the company’s problems, but I suspect CEO Joly knows the real issue: knowledgeable employees have been systematically removed from store payroll and replaced with…not much. Couple that with complete inconsistency between the web site and the store on both prices and products and you’ve got a big problem.  Personally, I didn’t stop shopping at Best Buy because its prices were high on its web site.  I stopped shopping there because I’d go to a store and either an item promised on its web site wasn’t really in stock, or I couldn’t find anyone to talk to.

I believe (and I know I am in the minority here) that Showrooming is mostly the last resort of a frustrated consumer.  Sort of like “I’ve been hanging around in this store for 15 minutes, and I can’t find anyone to help me. Let me see what people on line think.”  And that leads the shopper to…”Oh my, and I can get the item for $20 less to boot.  I’m outta here.”  Boom!

But I’m not naïve. People do comparison shop.  In fact, I contend that shoppers have checked for a good price on big ticket purchases since the dawn of retailing.  How many of us have gone from car showroom to showroom, waiting to find the best deal?  Or mattress store to mattress store?  I can remember going back and forth between two mattress stores way back in the late 80’s, letting them each mark down the price of an identical mattress, until I finally got bored with the game and bought one – at a price 30% less than we started at.  Thank goodness we’ve gone beyond THAT.

And that’s where the showrooming metaphor comes to its logical end.  If I’m in the store, and I see something I like, and I trust the seller, will I pay a few more bucks just to be done with it?  Yes, I will. I know I’ve talked about this in these blogs before.  I likely will again.  Because I just don’t buy it.

Mr. Joly has begun taking steps to add employees back into the store mix, and has also instituted a price match guarantee.  The price match guarantee is smart for now, given the bad rap the company has.  But it’s employees that are going to matter.  Putting Microsoft MSFT -1.46% stores/within a store might help use space that used to be taken up by DVDs and CDs, but it’s not the only answer. Best Buy has to invest in people.

And there’s one other thing.  Even if its ecommerce technology is a decade out of date (which I don’t think is quite right anyway), it’s imperative that prices and products be in synch across all selling channels.  What that means in English is, if I see it on the web and the web says it’s in the store, it had better be there, and it also should be easy to find.  If I see a price on the web, the price in the store has to be the same.  That’s what retailers call “omni-channel consistency.”  It’s a phrase that can sound like gibberish to an actual customer, but that’s what it means.  Wherever we find information on a retailer’s products and services, that information better be consistent.  That includes price, availability, product number, features, benefits…the whole 9 yards.

I think if Best Buy can get its stores in order, it has an excellent shot at success.  Like Home Depot HD -0.69% before it, it started from a very dark place.  But also like Home Depot before it, it can return to prominence with some TLC in its stores. That doesn’t mean customers don’t want a good experience on its web site.  It means they ALSO want a good experience in its stores.  I’m getting close to willing to visit one again (after a two year hiatus caused by broken promises and lack of the consistency I described above).  I hope when I do go, I find helpful employees and easy access to the products I’ve come to buy. I honestly don’t think that’s too much to ask for.

Correction: 11:04 August 12:  Hubert Joly’s first name was incorrectly spelled as “Herbert.” 

Best Buy Responds

“With our ‘Renew Blue’ initiative, we are working hard to give our customers a wonderful in-store experience.  While we are not perfect, the feedback we have received thus far has been quite positive.”

Jon Sandler

Spokesman, Best Buy

Best Buy abandona sus operaciones en Europa después de cinco años

La medida les permitirá "simplificar" su negocio, "mejorar" el rendimiento del capital invertido y "fortalecer" su balance.

La cadena de tiendas de artículos electrónicos Best Buy anunció hoy que abandonará sus operaciones en Europa con la venta de su participación en el grupo británico Carphone Warehouse por unos US$ 775 millones.

La firma tecnológica con sede en Minneapolis detalló hoy en un comunicado que cerró un acuerdo para la venta de su participación del 50% en Best Buy Europe, la empresa conjunta que creó en 2008 con Carphone Warehouse.

"Después de revisar el negocio y conversar con nuestros socios, llegamos a la conclusión de que era el momento y el entorno económico propicios para cerrar el acuerdo con Carphone Warehouse,” dijo el consejero delegado de Best Buy, Hubert Joly.

El máximo responsable de la firma tecnológica añadió que el abandono de su negocio en Europa les permitirá "simplificar" su negocio, "mejorar" el rendimiento del capital invertido y "fortalecer" su balance.

"Cada mercado internacional es diferente y la venta de nuestras operaciones en Europa no debe sugerir que estemos pensando en un acción similar en el resto de nuestros negocios en el extranjero,” añadió Joly.

Las juntas directivas de ambas compañías aprobaron ya la operación y ahora deberá someterse a votación de los accionistas del grupo británico, una transacción que esperan que sea cerrada a finales de junio.

Después de anunciar el acuerdo para salir del Viejo Continente, las acciones de Best Buy se disparaban un 8,8% hacia la media sesión en la Bolsa de Nueva York, donde sus títulos han multiplicado por dos su valor desde que comenzó el año.

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