What’s Driving Best Buy Market Share?
Best Buy represents a triumph for brick-and-mortar retailers. Once assumed to be falling by the wayside like its peers HH Gregg and Circuit City, Best Buy has been able to stand out from the crowd and engage with consumers in a meaningful way. While the retailer may be best known for consumer electronics and computers, it has also built a reputation on its major appliance sales. In the past five years, the retailer’s mix has been a combination of those three categories vying for top billing, with computers slowly declining year-over-year and major appliances slowly increasing. To get a more complete look at Best Buy’s market share and how it is faring, we are examining their performance in a few key categories over the past few years in greater detail.
Best Buy Market Share | Major Appliances
According to TraQline’s Q4’19 dollar share stats, Best Buy ranks third among retailers. With a “tech-centric” lineup, the average prices of its top major appliance brands such as Samsung, LG, and Whirlpool is higher than that of its peers. Additionally, shoppers at Best Buy are willing to spend more on average for their major appliances as well. Across all retailers, the average price of Samsung appliances is $981, whereas shoppers at Best Buy spend an average of $1,035 for the brand. Those higher average prices paid are consistent for LG and Whirlpool as well. Best Buy shoppers pay an average of $1,053 for LG major appliances (compared to $1,003 across all retailers), and $747 for Whirlpool ($718 across all retailers).
For consumers, price is almost always the primary consideration for where they purchase. However, Best Buy’s customers base their purchasing decisions more on average due to Best Buy’s advertising efforts and the offer of in-store credit. However, Best Buy’s repair service and their salespeople are their key differentiators when comparing the retailer to Lowe’s and Home Depot. Shoppers also skew more towards Gen-X and Millennials at Best Buy, compared to the predominantly Baby Boomer crowd at Home Depot and Lowe’s. That said, all three retailers tend to attract consumers with an income of around $50,000-$74,999 annually.
As Best Buy continues to “Build the New Blue: Chapter Two” there is a great deal of opportunity and growth potential for them to work toward share gains within the major appliance category. This potential is boosted by their focus around omni-channel and supply-chain initiatives, as well as their service programs like Total Tech Support.
Best Buy Market Share | Consumer Electronics
While the Major Appliance category is an category in which Best Buy market share can continue to grow its dominance, it is recognized most often as a key player in Consumer Electronics. The top products for Best Buy within the category are TVs, Stereo headphones, digital cameras, speakers (portable mini, bookshelf, and soundbar), and Blu-ray/DVD players. Let’s take a deeper look into which of these key categories are driving Best Buy’s overall growth for the category.
Best Buy beats rival Walmart to stay on top in dollar share. Best Buy accomplishes this by selling higher featured models that come at a premium, much as they do in major appliances. For example, Samsung is the top brand sold at both Best Buy and Walmart. However, consumers pay an average of $709 at Best Buy, versus an average of $499 at Walmart.
These days, most people are perfectly content with the cameras on their phones. But for hobbyist photographers who aren’t quite ready to shell out thousands on professional-grade DSLRs and mirrorless cameras, retailers like Best Buy are there to help. Brands like Canon, Nikon, and Sony can market to people who may one day be tempted by their even more expensive models. 1 out of every 4 consumers buys their cameras at Best Buy and the only outlet currently giving Best Buy a run for its money in this category is Amazon, who wins 22 percent of the dollar share compared to Best Buy’s 26 percent.
We live in a golden age of audio, from podcasts to streaming services and beyond. Approximately 11 percent of Best Buy’s current product mix is made up of portable mini speakers, bookshelf speakers, and soundbars. Again, due to selling products in a higher price range, the retailer tends to dominate in terms of dollar share, where they win 31 percent of the market.
Despite the popularity of streaming media, people still want to be able to own and watch Blu-ray discs and DVDs. Best Buy and its rival Walmart are well situated to provide Blu-ray/DVD players for those consumers. Best Buy, with it’s 32 percent share of the total market (in dollar shares), again leads all retailers – both online and brick and mortar. Best Buy most frequently sells Sony, Samsung, and LG Blu-ray/DVD players, and these three brands respectively take first, second, and third place at the retailer.
The Best Buy Advantage
As Best Buy continues to compete with big-box Home Improvement retailers for consumers’ attention and money on major appliances, they also continue to hold their advantages in the Consumer Electronics race. While they have been known for a variety of key products (most notably electronics), what they seem to be best at is meeting the needs of the customer as they redefine the retail space. Best Buy has made adjustments to both their product mix and services offered in order to meet customers’ needs—a challenge in today’s shopping environment.
TraQline offers market research and data services that can help you get ahead in the major appliance industry. Top businesses across industries rely on the TraQline quarterly report on Market Share and Consumer Behavior. For a deeper dive into the major appliance industry, TraQline’s SKU Metrix provides synthesized data from leading major appliance brands and retailers. For our highest level of insight, you can also turn to TraQline’s HPOS™, which provides comprehensive, detailed, and easy-to-understand model-level insights by retailer in the major appliance industry. We invite you to contact our market research professionals to learn more today.