Minneapolis – Best Buy
will focus on profitable growth categories including accessories, content
delivery, subscriptions and services, and will reduce its big-box square
footage by 10 percent over the next three to five years, as part of an aggressive
plan to build its business.
The strategic growth
strategy will be presented by senior executives to financial analysts in a
day-long meeting at Best Buy headquarters today.
The pillars of the plan
include:
- tapping
into the estimated $420 billion market for accessories, subscriptions and
services, which is two-and-a-half times greater than the traditional CE
hardware market. The company projects it will sell 10 million mobile phone,
home and mobile broadband, and video service contracts this year;
- doubling
its $2 billion online business within three to five years in the U.S.;
- building
out its small-format Best Buy Mobile chain to upwards of 800 stand-alone stores
within five years;
-
maximizing
pricing and assortment to drive higher conversion rates and position Best Buy
as a low-price destination, and;
- improving
store productivity and increasing “points of presence” while reducing its
big-box footprint, resulting in as much as $80 million in annual savings.
The company will also
continue to invest in “proven” overseas businesses such as its Five Star chain
in China, which will grow to between 400 and 500 stores and could more than
double in revenue to $4 billion within five years.
Best Buy noted that it
generated $50.3 billion in revenue last year, including $37 billion in the U.S.
