Best Buy’s new five year plan partly revolves around expanding into the healthcare market and moving from selling wearables and devices to adding the analytics and services needed to help senior citizens age in place.
The healthcare digital wellness push has been made possible by a series of acquisitions by Best Buy as well as investments in services. These investments have been funded by Best Buy’s core consumer electronics retail business and investments in services.
Best Buy CEO Corie Barry
Best Buy
CEO Corie Barry unveiled Best Buy’s next phase of its strategy called Building the New Blue: Chapter Two. Barry noted that Best Buy has hit its previous targets ahead of schedule and now is targeting revenue of $50 billion in fiscal 2025 with $1 billion of cost savings and a non-GAAP operating income rate of 5%.
Barry said Best Buy’s “strategy is working” and the company’s goal is to expand with its services footprint as well as continued innovation in the tech space.
Best Buy’s goal for fiscal 2025 is to double what it calls significant customer relationship events to 50 million. Barry said the a commitment to the customer for tech support, homes visited, consultation, active digital engagement and senior lives supported.
“Our deep understanding of the customer is only matched by our unique ability to meet their needs,” said Barry.
Best Buy’s Barry noted that the traditional consumer electronics category is at least as stable as other durable good categories. That relative stability combined with tech innovation and new devices will give Best Buy good footing to expand into new markets. “One of the reasons the CE category continues to grow is because of tech innovation,” said Barry.
Technologies such as digital health, 5G, foldable phones, 8K TVs are all growth areas. Barry said that Best Buy is uniquely suited to combine tech and high-touch customer service. Indeed, Best Buy has invested in analytics, marketing, people and partnerships with key vendors such as Amazon, Samsung, Apple and Microsoft.
Perhaps the biggest takeaway is how Best Buy is planning to sell technology as well as services to make integration less complex. With that approach, Best Buy can advance into adjacent categories such as healthcare.
Here are slides outlining Best Buy’s healthcare progression.
Today, Best Buy aims to build out its remote monitoring capabilities via Geek Squad, which installs home technology. Passive monitoring, artificial intelligence and smart home technology can all improve healthcare outcomes.
With remote monitoring, there’s an avenue for Best Buy to serve Medicare users to aid frail seniors. Best Buy is betting it can deliver savings for insurers serving frail seniors for a monthly fee per person. As for home health services, Best Buy also sees a role via its CST unit.
Best Buy executives noted that the company will have to operate differently as it builds out services and drives its retail business with automation, e-commerce, analytics and fulfillment improvements.
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