The formerly male-centric Best Buy Co. (BBY) is poised to show off its softer side in a new push for female customers, as America�s largest electronics retailer increasingly sees competition nipping at its heels. Readily admitting that it�s not too good with the ladies — only 16%of its sales are to women and just 31% of its employees are women — the superstore is shifting its message of 50-inch flat-screen fever and techno-gadgets galore to a more gender-neutral customer outreach.
Best Buy�s main rivals in the electronics department — Wal-Mart Stores (WMT), Target Co. (TGT), Radio Shack (RSH) and Amazon.com (AMZN) — have no problem in luring female customers (the two retail stores already refer to their customer as �she�). Circuit City, some of its strongest competition, disappeared in 2009, which should have sent sales skyrocketing as consumer electronics become a bit more limited. It didn�t happen. Quarterly revenue was up 6.9% to $10.79 billion but its earnings lagged at 36 cents per share, far below what analysts expected. So far this quarter, Best Buy has reaped a somewhat flat $155 million profit, just up some $2 million more than last year.
With retail stocks beyond just Best Buy seeing a seemingly unending consumer desire for mobile devices and smart phones, it�s becoming perfectly clear that women are the untapped market. Already, Best Buy is on the offensive with Best Buy Mobile, the fastest-growing chain of gadget stores popping up in target demographic-laden malls nationwide. The move allows the store�s retailers to reach out to women and teen girls who normally wouldn�t stray from the mall into the big-box stores.
The Richfield, Minn.-based company is also in the middle of initiating Women�s Leadership Forums (WOLF) around the country, asking for feedback from thousands of female customers (and employees, too). These past efforts helped in part to design newer Best Buy floor-room layouts, which gave some stores a more home-style feel. Though questions were raised early on about its effectiveness, WOLF group recommendations gave rise to teen salesgirls at their Mobile stores — hyping the phones, accessories and even video games to their peers.
Within the next few weeks, the big-box store will be offering additional floor space to video games for the purpose of used-game sales. The purpose? As kids tire of pricey games after time, video game swapping remains an economical niche area for moms to dip into.
All of this movement from the stores shows just how much love they�re giving the ladies. After all, its future may just depend on them.
While it may have been the economy, it was likely its female-friendly competition.
Though Wal-Mart is seeing roughly the same +7% stock increase as Best Buy in the last year compared to the +22% gain for the Dow Jones Industrial Average, Target is up +33% and Amazon.com�s at +47%.
The Wall Street Journal quoted Best Buy�s Chief Executive Brian Dunn as saying he expects the company to reach its annual earnings target of $3.45 to $3.60 per share, in what could be a 10% to 14% increase compared to 2010. Revenue should be more than $52 billion, a 5% increase from the previous year.
All sure signs of success as Best Buy looks to the ladies. According to the company, its female market share in 2009 reached its highest ever as female employee turnover slowed by 5%.
Those are pretty numbers, but the store will need more than just a fancy moves if it wants to attract the gender that usually holds the pocketbook.
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