Dive Brief:
- Best Buy will lean into the customer experience as a sales driver in fiscal 2025 as it looks to improve its app and in-store experience, executives said on a Q4 2024 earnings call last week.
- The electronics retailer makes 90% of its revenue from known customers, according to CEO Corie Barry. Best Buy will leverage its knowledge of repeat shoppers to improve personalization on its app, with an emphasis on offering loyalty members tailored experiences.
- Best Buy will also invest in refreshing and updating locations rather than major remodels or new openings, Barry said. Best Buy plans to adjust its store layouts to improve ease of shopping.
Dive Insight:
Best Buy is making the customer experience one of its major priorities in the coming year, Barry said. This will build on momentum it gained during the last quarter when its investments in associate technology led to NPS gains.
The push comes amid flat fourth-quarter revenue and $169 million in restructuring charges the retailer incurred because of employee layoffs, CX Dive’s sister publication Retail Dive reports. Best Buy also plans to close 10 to 15 stories this year, building on the 24 store closures last fiscal year.
One of the electronics retailer’s goals is to enhance the experience for loyalty members, who contributed approximately 45 basis points to the company’s operating income rate expansion in fiscal 2024, according to Barry.
Best Buy will work to create seamless digital experiences that lean into personalization, she said. Plans include dynamic messaging to encourage membership renewals and personalized versions of the app’s homepage that would feature relevant stories and actions.
Best Buy will also upgrade its app to deliver contextual prompts for promotions, rewards and other relevant membership information to customers and associates at the point-of-sale.
“Rather than bombarding our members with thousands of great member deals, we focus on the experience on the most relevant offers based on their preferences and observed member data,” Barry said during the call.
The stores themselves will undergo changes designed to bring them in line with how customer expectations have changed over the past four years. The company plans to update every store in some fashion, according to Barry.
The strategy includes emphasizing categories that resonate with customers today, like smart home devices, while removing outdated items like physical media, Barry said.
Associates will be an important part of the updated in-store experience.
Best Buy will reintroduce specialized training in categories including major appliances, home theater and computing, according to Barry. Associates with Best Buy’s selling certifications earn, on average, higher NPS scores than non-certified employees and drive nearly 15% higher revenue per transaction, she said.
