As Best Buy (NYSE: BBY) CEO Hubert Joly makes changes to the electronics retailer's e-commerce operations and upgrades its loyalty program, Best Buy is realizing sales growth.
While bringing BestBuy.com up to speed with its competitors will likely be a two or three-year journey, Joly estimates, the chain is already realizing sales from initiatives implemented over the last two years. Best Buy's online sales rose 11 percent in its second quarter, the seventh straight quarter of gains of 10 percent or greater.
One smart move was revamping its "MyBestBuy" rewards program last month. On the site, which has 41 million active members, shoppers can redeem rewards points and shop on a single site, comparable to companies such as Dick's Sporting Goods (NYSE: DKS). Best Buy's previous rewards program, "Reward Zone", was not linked to BestBuy.com, forcing users to log in to both sites.
Customers get bonus points for checking in to the MyBestBuy site using the Best Buy iPhone or Android mobile app when they walk into a Best Buy store. Loyalty program members also receive exclusive promotions through the Best Buy app.
The rewards program revamp – and a host of other changes – resulted in Best Buy's online traffic increase of 9.9 percent in August compared to last year. But Best Buy is not stopping there. Joly plans to more than double Best Buy's share of U.S. online consumer electronic sales to 18 percent from 7 percent, he said during a recent conference call.
Plus, Joly brought Sharon McCollam, formerly with Williams-Sonoma, out of retirement to become Best Buy's CFO and chief administrative officer. Next, the company is hiring more than 100 web architects, engineers, and technology employees. The team has upgraded the site's search function and added features such as recommending additional purchases for shoppers as they check out.
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