Move over, Geek Squad, and make room for the Grill Squad. That’s the latest twist from digitally transforming electronics and appliance retailer Best Buy, which just announced plans to expand its product offerings into two new categories: outdoor living and travel.
According to the Minnesota-based operator of over 1,100 stores and a website, the decision to start selling grills, patio furniture, fire pits and coolers is a natural extension of the pandemic era’s nesting trend, and comes at a time when consumers are trying to determine what their “new normal” routines will look like for home and work.
“During the pandemic, many of us turned our focus to our homes, whether that meant moving, renovating or simply redecorating — and that trend isn’t slowing down,” said the company’s Tuesday (June 15) announcement, before highlighting the seasonality of its new venture. “With the official kickoff to summer just around the corner, it’s time to focus on our decks, patios and backyards.”
While Best Buy’s shift to home furnishings and outdoor gear is clearly a bet on the continuation of a fairly mature trend, its pivot into the travel category is aimed at getting ahead of the next trend via an expected rebound in the hard-hit tourism sector.
“For those of us who may be leaving our backyards, whether we’re going on vacation again or just heading back into the office, we’re excited to bring you some of the very best [gear] from TUMI [the high-end suitcase and backpack maker that is owned by Samsonite],” the company said.
Best Buy’s vertical expansion plans come just two weeks after the company reported its first-quarter financial results, which saw comparable sales rise 37 percent, with profits more than tripling.
In a call with investors, CEO Corie Barry also said that the retailer’s digital transformation efforts had seen its same-day home deliveries rise 90 percent last quarter, while nearly two-thirds of its online sales were either picked up in-store or curbside, shipped from a store or delivered by a store employee.
“Best Buy has a unique ability to inspire and support customers in ways no one else can,” Barry told analysts and investors on May 27. “These are permanent structural shifts that we are seeing toward more hybrid work and learning models, streaming entertainment and a sustained focus on the home.”
With the new offerings, Best Buy is continuing to push its “expertise in delivery and on-site assembly services,” noting that it will also haul away and dispose of old equipment for $30.
Timing Is Everything
While the impact of Best Buy’s diversification play on its core business remains to be seen, the company noted on its recent earnings call that the increased penetration of consumer electronics during the pandemic presented an opportunity to grow its consultative in-home model at a time when people are also spending again.
“We believe the consumer is in a materially improved position with higher savings, stronger credit, more prolific vaccinations and more available jobs,” Barry said prior to the lineup expansion.
In addition, the $28 billion retailer is not backing away from its competitors — especially Amazon and its upcoming Prime Day sales event — and has just announced its own promotion, which is called The Bigger Deal sale due to the fact that it starts earlier, ends later and lasts for a full week.
Best Buy’s two new verticals are already available online and are being rolled out to select stores across the country.