Amid a chaotic year, Best Buy proved retail can move forward better than ever by experimenting and adapting to new retail concepts. In a year of mayhem, few retailers discovered a year of opportunity.
The pandemic's fatal blow to many retailers was the call to change industry wide. The demand for easier and safer shopping experiences beaconed retailers to move with the winds of change. Some retailers found themselves better prepared than others. In the year 2020, there was one retailer who stood out as exceptional: granting them the title of “2020 Retailer of the Year''.
Looking like an unlikely or unexpected retailer, Best Buy sells mostly electronics, most of which can be bought at other stores or online. So how exactly did Best Buy seize the retail winds of change and redirect their trajectory into retail success?
Best Buy’s response to the chaotic beginning of the COVID-19 pandemic
As a retailer that has seen struggle the last few years, the pandemic could have decimated the remainder of Best Buy’s hope. However, Best Buy took the new challenges in swing, adapted, and is came out better than before, even reimagining and recreating the physical retail concept.
Similar to other retailers, Best Buy was not considered “essential” at the onset of the pandemic. As a mandatory measure, all Best Buy stores shut down in March, except for curbside pickup. This was done as a necessity, although Best Buy used the closure as an experiment to collect data on several factors, including consumers preference and behaviors towards e-commerce and curbside pickup and to see if their physical stores could operate with the stripped down purpose of filling online orders.
Despite restrictions and due to successful e-commerce and curbside pickup, Best Buy continued to report increased sales, citing as high as a 174% year over year growth for online sales. Demand for electronics was also accelerated by masses of the workforce working remotely as well as a large span of the population bored in quarantine.
In May, Best Buy announced it would open but only for one-on-one in person shopping experiences with a Best Buy expert. Two months into the pandemic, customers making the trip into the store either couldn’t find what they needed online, or were just ready for the in person shopping experience. This new one-on-one experience was another experiment to see the true demand for in-person shopping. Return to stores without an appointment took place in June.
Best Buy, as a result of these real time experiments, began taking steps towards the new trend in physical retail by minimizing the sales floor to make room for back room storage space. Physical stores will be more or less like mini fulfillment centers, focused more on filling and shipping out online orders. These new stores formats will be at four locations in Minneapolis. The plan, laid out by CEO Corie Barry, described a sales floor displaying a limited stock of the most popular items, clearing half of the physical selling space to make room for pick up and ship from store.
Combining the retail test experiments, improving in their e-commerce platform, streamlining curbside pickup, and move toward the mini-warehouse store model, Best Buy earned the title of 2020 Retailer of the Year for embracing the opportunities that a worldwide pandemic offered, proving the retail experience will become better than ever.
Honorable Mention: Lululemon
Before 2020, much of the general public may never have heard of Lululemon. Thanks to the fashion moving closer to comfort (and also comfy clothes being the everyday wear during an outbreak of a deadly contagion), Lululemon might grant part of its success to increased demand in athleisure wear. Yet, one might ask why Lululemon? For a pair of yoga pants at Lululemon, a customer will easily spend almost $100 (easily 3 times the cost of most yoga pants).
The reason for success is a mix. Lululemon offers quality products and community. Pre-pandemic era, one may have visited the store for a yoga class. Now, fitness videos are available on their website. Or, as a result of Lululemon’s strategic acquisition of MIRROR, use their home gym to connect with trainers or complete workouts remotely. Further focus on IDEA, Lululemon’s initiative concentrating on inclusion, diversity, equity, and action hopes to yield a positive impact on employees, customers, and communities. As a result, Lululemon built brand loyalty.
Success may also be granted to Lululemon’s investment in their e-commerce platform, readying themselves for the surge of online sales that skyrocketed last year, resulting in 93% revenue increase from online and direct-to-consumer sales.
Continuing to expand locations, Lululemon certainly has established a name for itself as the household brand for athleisure and retail success.
Not every retailer was able to adapt, innovate, and move forward as successfully as others, resulting in thousands of retail store vacancies. Determining and securing the right tenant to occupy an empty space might be a very difficult challenge to tackle on your own. Retailsphere constantly collects data and conducts research on every retailer in the nation, forming an up-to-date database perfect for quickly finding the perfect tenant. Set up a virtual meeting with a Retailsphere professional for a personalized demo to start filling your vacancies immediately.
