Electronics retailer Best Buy has struggled of late and has outlined three new strategic priorities, which it believes will help it capture new growth opportunities in key categories and channels, fund growth efforts through structural opportunities and improve returns.

Electronics retailer Best Buy has struggled of late and has outlined three new strategic priorities, which it believes will help it capture new growth opportunities in key categories and channels, fund growth efforts through structural opportunities and improve returns.

Best Buy has decided to tap into the latest consumer fad and target the high growth tablet sector and position itself as a destination store for these devices. Best Buy plans to establish a ‘Tablet Central’ spot in 1,100 of its superstore locations to consolidate its range of tablets and e-readers.

Online growth is central to the retailer’s strategy with the aim of doubling its $2bn (£1.22bn) online sales revenue in the next three to five years. Best Buy has been an innovator in the online sector and was one of the first retailers to open up commercial access on Facebook - if anything the aim of achieving $4bn (£2.45bn) by 2016 is slightly conservative.

In terms of channel growth it considers there to be great potential in the US mobile phone market, a sector that prior to the retailer’s tie-up with the Carphone Warehouse was grossly under penetrated. In the next five years the retailer envisages having between 600 and 800 standalone mobile phone stores as it rolls out its Best Buy Mobile format.

Most interestingly Best Buy has said it anticipates reducing its US superstore sales area footprint by 10% over the next three to five years. For a retailer that has built its presence through large format electronics stores this is a significant reversal, albeit not a surprising one. More surprising has been the retailers perseverance with its superstore theory that has been less than successful in China, Turkey and the UK.

Roughly a quarter of floor space within a typical Best Buy is designated to the entertainment category, a sector that contributed just 7% of total sales to the retailer’s revenue in its most recent quarterly results and shrunk by a dramatic 9.9% on a like-for-like basis. Best Buy has tried to offset this declining sector by introducing innovative new product lines such as musical instruments and mobility devices. However, sometimes it is better just to cut your losses and the reduction in floor space will undoubtedly see a decline in the retailers dedication to the entertainment sector.

By setting its stall out to focus on the latest gadget, ecommerce and smaller stores Best Buy is hardly rewriting retail strategy, but after a turbulent start to 2011 focusing on its core business proposition is a logical step.

Greg Hodge, research director, Planet Retail

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