Agnostic Sales Strategy Is Retail's Future, Says Best Buy CEO in CES Keynote
Webcams became an unexpected product scarcity resulting from a computer trickle-down phenomenon during the pandemic, said Best Buy CEO Corie Barry on a Tuesday CES keynote. Home office shortages abounded when families suddenly began looking for computing solutions at home when work- and school-from-home mandates took effect last spring, she said.
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After setting up a PC, households realized they needed webcams to look clearer on the other side and mics for better audio quality, said Barry. “As you had more time to think about what the best experience might be at home, then you started bolting on the ancillary products," she said. “Nobody knew there’d be a run on webcams at the pace we saw, yet suddenly it became the hottest item that we had.”
On the unknowns Best Buy faced after stores reopened in June, Barry said the retailer had scaled back on inventory in certain areas to avoid surpluses, leading to product shortages in segments of home office and kitchen appliances. “When you have that demand-supply imbalance, you just can’t keep up with it," she said, saying vendors couldn’t manufacture fast enough to keep up with demand for products supporting households’ needs for working, schooling and cooking at home.
Best Buy’s “overnight” enabling of curbside fulfillment in response to safety concerns during the pandemic required employees to work differently and outside of familiar structured roles as product specialists, Barry said. All employees had to pitch in to get tech gear to customers in the way they wanted to receive it, including after stores reopened in June. That capability has grown more important and will continue to be a pillar of the retailer’s future strategy, she said.
E-commerce sales exploded -- Best Buy's online sales were up 175% year on year as of Q3 -- Barry said, with 40% of sales still being picked up in stores or curbside. Stores continued to play a role in the sales process. She cited customers’ demand to be able to come to a store to get an item “when I wanted it, where I wanted it, as fast as I wanted it.”
The company had already started to pivot to a digital sales strategy, saying at a prior investor day it needed to “double down” on its fulfillment mechanisms, Barry said. “What we thought might take three to five years to penetrate ... happened overnight,” she said. Management “flexed up” supply chain investments the company had been making for the past four years and put the customer in control, whether they wanted to order “from their couch,” curbside or in store. “That needs to not matter to us,” she said: “We need to agnostically meet that customer wherever they are. That’s going to be the future, for sure, of retailing.”
On whether it was difficult to get employees on board with fulfillment changes, Barry said, “There’s something very unifying about a pandemic” as employees tried to get customers what they needed during a taxing time. She referenced “magic” in watching company unification efforts “against very common … and basic problems.”
On the future role of the retail store, Barry referenced the changing role of stores as “fulfillment epicenters” for e-commerce and curbside pickup. They also continue to have an experiential role. When Best Buy reopened in June, customers for the more complex sales returned to stores for guidance, she said. “They had high expectations for what that interaction and consultation would look like.” Stores also play an important role in support and help, Barry said.
On what CE retailers and vendors can do to replace the social aspect lost in a virtual CES, Barry cited the need to “get outside.” It’s easy to get “insular” as a company, she said. Barry follows publications that cover the latest tech gear and trends and visits stores when she can, saying “it’s valuable to talk to our associates about what they love and what their customers are asking for.”