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.