By Neil Saunders
Over recent years there have been significant changes to the electronics market, including fierce competition from the rise of online. However, Best Buy has successfully navigated this new landscape – in large part because it has adapted its proposition and approach.
The focus on health, and in particular health services aimed at the elderly, puts Best Buy squarely into a market with high demand and strong growth.
One of the main changes has been the move from simply selling products to trying to help consumers select and get the best use out of new devices. In a sense, Best Buy now sees its role as helping consumers to improve their lives through technology.
In light of this, the decision to acquire GreatCall is a logical evolution. It gives Best Buy a relevant service, driven by technology, that it can offer to consumers. In our view, it also helps counterbalance the pressure on both sales growth and margins of electronics products.
The focus on health, and in particular health services aimed at the elderly, puts Best Buy squarely into a market with high demand and strong growth. Moreover, we see this as a good fit as Best Buy is a known and trusted brand name among older shoppers. This should enable the company to grow the GreatCall service.
In the long run, we see this as part of Best Buy’s continued adaptation to a provider of services rather than a pure retailer of things.
Neil Saunders is managing director of research firm GlobalData Retail.