What is Best Buy? What are the characteristics of the Best Buy model?

What is Best Buy?

Best Buy, the world's largest home appliance and electronics retail group, announced on its official website on February 22, 2011 that it would close nine Best Buy stores in mainland China and planned to open nearly 50 Five Star Appliance stores in China in 2012.

Best Buy has been well-known since the opening of its first large-scale shopping mall in 1983. With the concept of selling large boxes of products and focusing on professional retail, Best Buy has created an annual revenue of more than 25 billion US dollars today. As of March 2004, it has more than 750 stores in North America, and the number of stores is increasing at a rate of 70 to 80 stores per year. It has become the number one retailer of home appliances, personal computers, entertainment software and appliances in North America, with a market share of 16%.

What are the characteristics of the Best Buy model?

Best Buy is the world's largest home appliance retailer. The world's largest company in the home appliance retail industry is Best Buy in the United States. It has become one of the most famous retail brands in North America only in the past 20 years. Its business characteristics are:

1. Single business model, continuously reducing costs

Best Buy has created a new business model for home appliance sales: large home appliance specialty stores + chain operations. Large home appliance specialty stores are different from traditional specialty stores. They can be thousands of square meters in size and are usually located far away from central business districts where store rents are expensive. Goods are displayed in a warehouse-style or sample display. This not only brings together goods from many brands and provides customers with convenience in choice, but also greatly reduces operating costs and achieves a competitive price advantage.

As a new business model, Best Buy has adapted to the era of small profits from the very beginning. At the same time, the chain operation of large-scale home appliance specialty stores can easily achieve economies of scale. If one store is 2,000 square meters, 20 stores will be 40,000 square meters. If there are 100 stores, it will be 200,000 square meters. These 200,000 square meters of home appliance stores can achieve sales of 10 billion yuan a year, which is enough to control any home appliance manufacturer and obtain the most favorable purchase price. At the same time, large-scale operations can reduce unit operating costs.

Best Buy has implemented a cost-leading strategy based on a single business model to ensure that customers can buy home appliances at the lowest prices. It has made efforts to reduce costs in many aspects such as product purchases, store layout, and staff arrangements, while also reducing profit margins. Its sales profit margin and net profit margin remain at around 16% and 1% respectively, demonstrating long-term competitiveness.

2. Service and online transactions are the winning formula

Open the Best Buy website and you can easily find purchase guides for various products. There are independent research centers under the home appliances, computers, digital and other sections to provide consumers with systematic solutions and suggestions. If you buy a new house or need to redecorate your house, you can walk into Best Buy's concept store and easily find GeekSquad's service consulting experts to help you formulate wiring, installation and application plans for your home entertainment center. For a standard consultation fee of only $150, the experts will visit the customer's home and formulate a plan on the spot. When you finally decide to purchase at Best Buy, the consulting fee will be waived.

This is the end of this article about Best Buy. If you want to get more knowledge about Best Buy, please pay attention and we will continue to answer your questions~