Best Buy Better Than Expected in 2020

By Thomas Price Sunday, November 22, 2020

Considering the difficulties of businesses with physical location retail stores being the main source of revenue in 2020 due to the ongoing COVID-19 pandemic, there are many questions about the largest chains. There is particular interest when it comes to a company like Best Buy, which relies heavily on in-store purchasing but is also directly involved in technological devices, which have seen a sharp increase of interest in recent months. Especially considering the mixed prior few years, there has been significant pressure on Best Buy to continue innovating their brand to stay afloat. So, how is Best Buy doing in 2020, and what changes have they made to survive as a business during the pandemic?

Best Buy in 2020

After a tough first quarter, Best Buy was subject to a massive drop in numbers below the levels from 2019. The company saw its revenues decrease by 6.34%, totaling to just $8.562 billion — the lowest since 2017. However, after a rocky first quarter, Best Buy bounced back to earn $9.910 billion in revenue, a clip 3.92% higher than the same quarter in 2019, and well over $1 billion more than the beginning of the year. In the meantime, Best Buy’s stock has been on a continuous positive trajectory since hitting a low in March of $50.10 per share. Since that day, Best Buy’s stock value has skyrocketed up to $111.55 per share, over doubling in value over the course of a few months. This has put Best Buy’s market cap up to a gargantuan $28.87 billion.

Much of this can be attributed to how well Best Buy has adapted to the restrictions brought on by the COVID-19 pandemic. In fact, Best Buy was one of the early adopters of curbside pick up for all products that people wish to buy locally. As COVID-19 restrictions have begun to ease, 700 stores have reopened under strict guidelines in addition to offering by-appointment consultation services. Best Buy also resumed around 80% of function in the United States for expansive, more lucrative services such as large product delivery, in-home installations for TVs and computers, and repairs. The company also has plans to extend store hours in order to accommodate more customers throughout the day while still adhering to strict social distancing guidelines. On top of this, Best Buy has continually bolstered its online sales and website by offering free shipping on many items. What is more promising is that this has all happened before the most lucrative time of the year for Best Buy.

Near Future for Best Buy

With a solid game plan for in-store customers and extended hours in order to accommodate more business and a reliable and strong online presence that allows for both delivery as well as curbside pick up, Best Buy is equipped with the tools to generate as much revenue as possible during the holiday shopping season. The company has also put a major campaign behind their Black Friday sales. They will be mostly available online this year to maximize revenue given how drastically shopping, especially on tech devices, has transitioned to e-commerce over in-person purchases. In 2019, the final quarter of the year, Best Buy generated $15.196 billion, 2.67% higher than the prior year. If the upticks of revenue that Best Buy showed this year hold steady, the company could be set to make even more than that in 2020. Best Buy has equipped itself to handle the pandemic extremely well, and that preparedness could lead to future success.

Final Conclusions

Best Buy has had a mixed decade. With peaks and valleys in their revenue, it has taken significant steps in order to stay afloat despite the transitioned market away from physical locations. Considering the major retail property still owned by the company, it is a testament to their significantly improved online presence that they exist in the capacity that they do today. Especially, as shopping continues to trend more and more toward e-commerce, Best Buy’s adjustments have made them a profitable company, and their survival through the pandemic thus far remains proof of that.

About the Author

Headshot for author Thomas Price

Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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