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BestBuy.com pushes foot traffic into stores
40% of online buyers pick up purchases in stores, says chief financial officer Sharon McCollam.
When Best Buy Inc. reported comparable web sales increased by 16% in the first quarter, it represented both improved online performance and new opportunities for store sales. That’s because 40% of Best Buy’s web customers choose to pick up their purchases in a store.
“We think this is an enormous competitive advantage, because the customer wants it now, and no matter what the online competitors do, they cannot deliver it ‘now,’” Sharon McCollam, Best Buy’s chief administrative officer and chief financial officer, told analysts last week in a conference call.
One obstacle Best Buy faces in driving customers to stores to retrieve purchases is that it cannot tack on additional items to the pick-up order, McCollan said. Anything else the customer wants to buy must be in another transaction.
But that issue will be resolved before the holiday shopping season, she said. “We will be able to instantly add [items] to your transaction and then you can walk out of the store,” she said.
As the mass merchant moves forward it is increasingly tying its web and store sales channels together. Last month Best Buy announced a plan for stores to fulfill web orders when the online inventory is exhausted. BestBuy.com loses 2% to 4% of its orders because the site shows the item out of stock at the e-commerce distribution centers, even though about 80% of the time it is available in a Best Buy store, says Hubert Joly, president and CEO. In the second quarter, Best Buy will begin testing shipping web orders from 50 stores. If successful, the program will be extended to more stores to meet online demand, Joly says. Best Buy is emulating other retail chains that have begun shipping from stores, including Wal-Mart Stores Inc., No. 4 in the Top 500 Guide.
Best Buy is No. 10 in Internet Retailer’s 2013 Top 500 Guide.