Best Buy introduces updated branding and a new logo.
Over the past five years, Best Buy has made significant progress. With our Best Buy 2020 growth strategy, we are now focused on the future rather than the turnaround. We are extending the products we sell and transforming how we sell them as we concentrate on enhancing people’s lives through technology. Our brand is currently changing as well.
The introduction of our new marketing plan on May 9 celebrates our new catchphrase, “Let’s talk about what’s possible.” It relates to the tale of our Blue Shirts and explains how our organization strives to be a motivating friend who aids clients in realizing their goals and the ways in which technology might make it possible for them to do so.
The inventive components of the updated branding incorporate a new look and feel with updated photos, colors, and wording and an updated Best Buy logo. Everything is intended to showcase our culture, knowledge, and skilled staff.
At the core of our endeavor, according to Best Buy Chief Marketing Officer Whit Alexander, is telling the story of our people and how we have a significant influence on the lives of our consumers. “Our greatest strength is our people.”
A contemporary logo
We’ve redesigned our logo for the first time in almost three decades. Particularly in the present digital age, it is now more contemporary and simpler to read. The word “Best Buy” is still in bold, black text, but it is no longer inside our distinctive yellow tag. The tag provides a visual connection and graphic punctuation. White claimed that although the new logo was cleaner.
Best Buy introduces updated branding and a new logo.
It remained loyal to the company’s history. We’re quite thrilled about the future evolution that is taking place. The logo is already used in TV commercials, digital advertisements, and BestBuy.com. Soon you’ll notice it on signs, shopping bags, and uniforms.
Real-world discussions
On May 13, new television advertisements and online videos will go live. Instead of only emphasizing our products, they concentrate on the Best Buy shopping experience. The advertisements emphasize the Blue Shirt’s function as a motivating companion who aids clients in meeting their needs and learning what is possible with technology. The dialogues between our Blue Shirts and consumers are highlighted in the advertisements. The last reward is the merchandise.
The commercial’s only color in the black and white photograph was the vivid blue of the Best Buy employee’s shirt. The products were photographed against a vivid blue backdrop.
White responded, “We have a terrific story to share. The main thing that sets Best Buy apart from the competition and makes us great for consumers is that we comprehend your specific wants and how technology may improve your life. The commercials, which star actress Scarlett Johansson in voiceover work, were made by Academy Award-winning director Errol Morris.
Even with fewer stores, revenue can increase.
Given that Best Buy has been reducing the number of its stores for years and cannot duplicate its success worldwide, bears may think that the company has run out of prospects for development. However, revenue growth is fuel by Best Buy’s omnichannel strategy and high-touch customer service.
Best Buy introduces updated branding and a new logo.
Even though its domestic store count decrease from 1,369 to just 991 over the same period, Best Buy increase its domestic revenue from $36.2 billion in 2016 to $43.3 billion in 2020.
Domestic Sales and Store Count for Best Buy from 2016 through 2020
Due to modern technology’s tendency to change constantly, high-touch customer service is constantly in demand. Unmatched customer service is offer by Best Buy’s commission-free support team, skilled Geek Squad, and in-home advisers. The market for electronics stores. Best Buy offers the most comprehensive client experience among its rivals.
Offerings Of Consumer Electronics At Best Buy And Rivals
With 20,000 Geek Squad members, Best Buy can provide service, convenience, and low-cost solutions. With 4.5 million customers served and supported annually, the Geek Squad strengthens the Best Buy brand and increases client loyalty.
Future revenue growth at Best Buy will also be aided by the company’s wide range of services. Best Buy’s domestic services revenue increased from 4.3% of total domestic revenue in 2017 to 5.3% in 2019. Best Buy’s domestic services revenue represented 5.2% of all domestic revenue before declining to 4.8% in 2020 due to the pandemic.
Services Revenue at Best Buy as a Percent of Total Revenue, 2017–2Q21
The company’s Totaltech membership program will boost existing clients’ revenues and foster more customer loyalty. Best Buy stated in its calendar 2Q21 earnings call, “Beta members [a pilot membership program similar to Totaltech] interact more frequently and have higher incremental spend than non-members.” The membership fee for a service like Totaltech undoubtedly generates revenue. Best Buy introduces updated branding and a new logo.
But it also fosters stickier customer relationships that foster revenue growth throughout the short- and long-term.
Digital Healthcare Providers Will Boost Revenue
Best Buy wants to expand into new industries like healthcare by using its very effective network of high-touch customer service and support. Its widespread physical presence throughout the United States and its operation to provide 24/7 customer assistance positions the business to support and train users in addition to installing and calibrating healthcare equipment.
In October 2021, Best Buy purchased Current Health, which integrates remote health monitoring, telehealth, and patient interaction. Best Buy has recently acquired several health tech companies. The company’s growth potential and the total addressable market will significantly increase by entering the digital healthcare business. Best Buy introduces updated branding and a new logo.
According to ResearchAndMarkets, the U.S. digital health industry will increase at a compound annual rate of 28% from 2021 to 2025, accounting for $192 billion, or 43% of the market for consumer electronics in the country, in 2020.
Better yet, given that it already has the required operations (physical stores and highly skilled staff), expanding into the healthcare segment is an easy addition to Best Buy’s existing value proposition at a much lower cost than competitors. Best Buy has lots of room to increase revenue from its present brick-and-mortar footprint thanks to a rising online presence, expanded membership programs, and entry into the healthcare business.
The Omnichannel Platform at Best Buy Is Difficult for Amazon to Duplicate
Investors have long believed Best Buy would perish in the Amazon-led Retail Apocalypse. But Best Buy has shown that their omnichannel offering is fiercely competitive in the era of internet shopping.
Amazon leads the U.S. consumer electronics market despite Best Buy having a strong omnichannel presence thanks to its greater online presence. Amazon, however, is planning to establish department shops to increase its physical presence since it is aware of the drawbacks of operating exclusively online. Amazon’s decision to expand highlights the virtues and success of Best Buy’s brick-and-mortar strategy.
In the consumer electronics industry, creating a great omnichannel experience takes more than just expanding your brick-and-mortar presence. Best Buy complements its brick-and-mortar presence with a substantial customer service offering, which will be far more difficult for Amazon to imitate with over 80,000 cross-trained staff and 20,000 highly competent Geek Squad representatives.
Enhanced Store Base
Best Buy now has one of the most profitable store portfolios in the industry because of its choice to shutter underperforming locations. Figure 5 demonstrates that the business makes more money from its retail location than its closest rivals. The company’s US revenue per square foot is higher than Target’s and Walmart’s (WMT) (TGT). Compared to Costco (COST), Target, and 2.5x, Best Buy’s net operating profit after tax[2] (NOPAT) per square foot from U.S. operations is greater.
Compared to a few competitors, Best Buy’s 2020 U.S. revenue and NOPAT per square foot
It’s not surprising that Best Buy has the second-highest invested capital turns and second-highest return on invested capital (ROIC) among the rivals shown in Figure 6, given its capacity to earn sizable sums of income from its retail space. As its NOPAT margin increased from 3% to 5% over the same period, Best Buy’s invested capital turns increased from 3.6 in 2014 to 6.1 during the trailing twelve months (TTM). Best Buy’s ROIC increased from 7% in 2014 to 32% TTM due to rising invested capital turns and margins.
Profitability of Best Buy Compared to Competitors: TTM
Best Buy’s Core Earnings increased year over year in each of the previous eight years. Recently, the company increased From $1 billion in 2014 to $1.6 billion in 2019, and Core Earnings increased. According to Figure 7, Core Earnings have increased dramatically over the TTM period to $2.6 billion, nearly equivalent to its GAAP earnings of $2.5 billion. The company’s stated financials are more accurate than most, with its Earnings Distortion at just 2% of GAAP Earnings.
This is good news for investors because stocks of companies with little-to-no Earnings Distortion, or “Truth Stocks,” have been shown to produce novel alpha.
Short-Term Obstacles Providing investors with long-term opportunities
Several issues are weighing down Best Buy’s shares in the short term. However, a thoughtful analysis of these issues confirms that Best Buy is on the right track for long-term profit growth.
Difficult Comps: Without question, post-pandemic pent-up demand helped Best Buy’s revenues in 2020. However, a sizable part of the company’s new sales in 2020 will probably stick around. The company stated in its calendar 2Q21 earnings release that it “serves a much larger install base of consumer electronics. And with customers who have an elevated appetite for upgrading due to constant technology. The innovation and needs reflect permanent life changes” due to a significant increase in the need for technology.
The pre-pandemic aim of $50 billion in sales by calendar 2024 has been exceeding. And according to the company’s management, which is guiding for 2021 revenues are between $51 billion and $52 billion. Best Buy’s revenue in 2021 would still be up 17% from pre-pandemic levels. And 8% higher than in 2020, even at the low end of expectations.
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