Dive Brief:
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Richfield, Minn.-based Best Buy Co. reported Thursday that the Q4 profit was $293 million, compared with a $409 million loss the year before.
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The country’s largest electronics retailer, which reeled from its holiday strategy of yielding to intense discount pressure to lure customers, aims to cut $1 billion in costs, even more than its earlier stated goal of $725 million.
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U.S. web sales rose 25% last quarter, offsetting losses at physical stores.
Dive Insight:
Best Buy is clambering fast and furiously to get out of the hole it dug for itself over the holidays. The company has been slashing costs mightily, but at some point that well will run dry. Better to focus on the strength of its online sales and the new approach to its physical stores. Best Buy is transforming itself into something of an electronics market, with a Samsung store-within-a-store here, a Microsoft store there. The approach, which will require superb customer service and good coordination across channels in addition to superior products, looks like a nod to the Apple store, a favored child of retail brick-and-mortar.
