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Best Buy adds beauty gadgets and outdoor furniture to product lineup


Elektrobikes Patio furniture. Beauty products

Best BuyThe company is adding products that may surprise those who think its website or stores are places to purchase smartphones, laptops, and televisions.

Friday was the first day that nearly 300 retailers and its website carried about 100 different skin-care products, which included a facial steamer, and at-home microdermabrasion tool.

Best Buy plans to expand into other categories, such as furniture and fitness. This will help propel its growth. the Covid pandemic. Early pandemic trends benefited the company, with people looking for computer monitors and kitchen appliances to cook at home, large TVs or theater systems for entertainment.

The retailer now faces more difficult challenges. The retailer warned in March that there were challenges ahead. expects a same-store sales decline of between 1% and 4%In the coming year, after a period with very high demand.

Already there are signs that electronics sales may be slowing as more consumers spend their money on vacations or social events. Appliance manufacturer WhirlpoolSales in North America dropped 8.3% in the last quarter of the current year compared to the previous year, the largest drop since the outbreak. MicrosoftThe maker of Xbox consoles for gaming, outlined a negative outlook in the next quarter, with predicted declines in this category.

The NPD Group, a market researcher, projected that revenue from consumer electronics in the U.S. will fall by 5% in 2022, 4% in 2023 and 1% in 2024 — but said total sales will remain higher than pre-pandemic levels. NPD Group stated that the declines are due to a record-breaking year for U.S. consumer electronics sales, which reached almost $127Billion, an increase of 9% over the higher sales in 2020.

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Some of the new items cater to consumers’ going out and getting social again — such as electric scooters, according to Best Buy’s chief merchandising officer, Jason Bonfig.

This retailer has expanded its range of merchandise in recent years. Best Buy introduced connected fitness products by NordicTrack and Hydrow to its customers in spring 2019. This was launched in summer 2019. outdoor grills from Weber and TraegerA line of mopeds, scooters and electric bikes was launched in June. Yardbird was a direct-to consumer outdoor furniture business that it acquired for an undisclosed price in November.

Best Buy bought several health-care firms, including GreatCall. They sell services and devices that assist seniors in living at home. The company is also testing new services, including a pilot program that offers repair services for electronic transport products.

Bonfig said in an interview with CNBC that the company has taken cues from customer and employee feedback — and clicks and searches on its website. Bonfig said that some customers would inquire about the outdoor furniture of employees when they were looking for audio or TV equipment.

He said, “Our past answer has been, ‘No. We actually don’t have an assortment.'”

Yardbird makes it possible. This month, Best Buy added displays at one of its namesake stores and a handful of locations under the Best Buy subsidiary, Pacific Sales Kitchen & Home in Southern California. Best Buy offers outdoor furniture, including wicker and settees.

Yardbird will be added to approximately 90 of its roughly 1,000 U.S.-based stores this year. Best Buy has over 250 fitness stores. Best Buy is planning to expand the range of products available in its 90 locations.

Best Buy doesn’t break down revenue by product category. However, emerging markets have proven to be a strong driver of sales. Bonfig told investors at a March investor day that the majority of Best Buy’s past decade-long sales growth has been from established products, such as television, computers, and appliance. However, only one third has come form newer categories like wearables or virtual reality headsets.

Bonfig refused to give CNBC exact growth figures, but said that the younger segments are showing good results. He also said that TheraFace Pro has been a huge success, one of its skin-care products. The device is available for around $400 and includes features such as cleansing or infrared therapy. According to him, the products are designed for consumers who care about health and well-being.

Michael Baker, a retail equity research analyst at D.A. Davidson said that adding merchandise groups is in line with company history. The moves allow Best Buy to remain on top, grow its total market, and increase consumers’ disposable income.

He has set $135 as his price target, which is 46% higher than where shares currently trade.

According to him, the greatest risk is that Best Buy might buy merchandise, only for it to linger on its shelves and end up being discounted.

Baker indicated that moderating sales could free up time for Best Buy and enable it to become more imaginative in the way it markets and promotes different types of merchandise.

His statement was that “there was so much focus on being in a position to satisfy demand for work at home, learn from the home, and play from home types of products.” They can see the future with those who are slowing down.