Best Buy’s holiday web sales grow by double digits
January 14, 2016 04:18 PM
Best Buy Co. Inc.’s online holiday push resulted in double-digit year-over-year web sales gains for the second year in a row, while total sales fell nearly 1%.
Best Buy, No. 14 in the Internet Retailer 2015 Top 500 Guide, reported domestic online sales of $1.678 billion during the nine-week holiday shopping period ended Jan. 2, up 12.7% from $1.489 billion during the same time last year. For the 2014 holiday season, Best Buy reported domestic online sales growth of 13.4% year over year.
Best Buy reported total domestic revenue of $10.050 billion for the 2015 holiday period, down 0.8% from $10.132 billion during the same time last year. Online sales accounted for 16.7% of domestic revenue during the 2015 holiday season, up from 14.7% a year ago. Best Buy attributed those gains largely to an unspecified year-over-year conversion rate increase.
“These results and our outlook are driven by the solid execution of our holiday strategy and the leveraging of investments in our merchandise assortment, digital capabilities, higher in-stocks, Blue Shirt and Geek Squad expertise, and faster shipping,” Best Buy CEO Hubert Joly said.
Among other things designed to motivate shoppers to spend online, Best Buy offered some Black Friday deals online as early as Nov. 10 and then offered all of its Friday-after-Thanksgiving deals online on Thanksgiving before its stores opened. Best Buy also offered free shipping on online orders regardless of purchase.
Neil Saunders, CEO of research and consulting firm Conlumino, says while e-commerce helped to salvage what would otherwise have been a “significantly worse” holiday season, the retail chain has a lot of work to do if they’re going to keep pace with Amazon.com Inc.
“We believe that Amazon contributed to the company’s weak numbers,” Saunders writes. “Amazon extended its market share for both its own devices and other personal electronic items over the holiday period. Best Buy must continue to address the shift to online both with further investments in its own digital proposition as well as ensuring its stores remain a relevant part of the customer journey by informing, engaging, and inspiring customers.”
Another retail chain reporting holiday sales Thursday was The Bon-Ton Stores Inc. (No. 181). The clothing retailer reported omnichannel sales, which include online sales, grew double digits year over year during the holidays, though the company declined to specify sales figures or an exact percentage growth. Bon-Ton defines omnichannel sales as a combination of online sales and sales made through their Let Us Find It program, wherein a shopper in a store can have a store employee place an order for an out-of-stock item and have it sent to the shopper’s home from one of the retailer’s fulfillment centers or another store location. Comparable-store sales fell to $784.4 million during the 2015 holiday shopping season—the nine weeks ended Jan. 2—down 1.5% from $796.4 million last year.
On the retailer’s Q3 2015 earnings call in November, CEO Kathy Bufano told analysts Bon-Ton will be expanding the number of stores it uses to fulfill online orders from 60 at the time to 200 by the end of 2016. Bufano also said the retailer would be expanding its buy online, pick up in store program to include most of its 270 retail locations by next fall.