Increased traffic and conversion drive Best Buy’s web sales up 5% in Q1
May 26, 2015 02:49 PM
Consumer electronics retail chain Best Buy Co. Inc. says its efforts to more closely link its stores with its e-commerce site are paying off, and the merchant reported a 5.3% increase in domestic online sales for the fiscal first quarter of 2016. Total revenue declined for the period.
Soft demand for tablets and personal computers, items frequently purchased online, limited the increase in web sales, Best Buy reported last week. The current quarter also faced a tough comparison with the first quarter of last year when Best Buy began fulfilling web orders from stores, driving a large increase in online sales.
Best Buy, No. 14 in the Internet Retailer 2015 Top 500 Guide, says it plans to continue to invest in its multichannel strategy, with $160 million in capital investment planned over the next two years.
Best Buy says it began hiring in Q1 for positions at its technology development center in Seattle, tasked with improving e-commerce platform and mobile shopping capabilities.
The merchant also launched a new mobile app in the first quarter that accepts Apple Pay, and initial response from customers has been positive, CEO Hubert Joly told analysts on a conference call. “With such a significant and fast-growing portion of traffic now coming from mobile devices, it is imperative that we accelerate the transformation of our mobile customer experience.”
Online sales also benefited from website upgrades involving online access to returned items. “During the quarter, we also launched new search capabilities that include the online visibility of returned open-box inventory,” Joly said. “While there are more capabilities being implemented this year to improve recovery of our returned, replaced and damaged inventory, to date we've made it much easier for customers to find, view and shop open-box products by adding the relevant information and links to the product listing pages and search results.”
For the period ended May 2, Best Buy reported:
- Domestic online revenue of $673 million, a 5.3% increase from approximately $639 million in the fiscal first quarter of the prior year.
- Total sales of $8.56 billion, down 0.9% from $8.64 billion.
- Domestic sales of $7.89 billion, a 1.4% increase compared with $7.78 billion.
- International sales of $668 million, down 22.1% from $858 million.
- Domestic comparable sales increased 0.6%. Best Buy includes e-commerce in its comparable sales figures.
- Net earnings of $129 million, compared with $461 million in Q1 of last year.
Domestic online sales represented 7.9% of total revenue in Q1, compared with 7.4% in the fiscal first quarter of last year.