Best Buy is concerned it isn't using the Internet effectively enough as a sales tool.
Speaking yesterday during an earnings call, Best Buy CEO Brian Dunn said his company is "taking actions now" to improve its "performance" online, according to a transcript posted by SeekingAlpha.com.
Relying more heavily on the Web to bolster business might be a good idea for the big-box retailer. The company, which revealed a slight year-over-year decline in revenue and profits during the three-month period that ended February 26. One of the more disconcerting revelations was that Best Buy's comparable store sales were down 4.6 percent compared with the same period in the prior year.
Best Buy generated a profit $1.28 billion in fiscal 2011--down from the $1.32 billion it tallied the prior year.
Best Buy used the earnings call to discuss how its online focus could change its fortune. Best Buy President Mike Vitelli said that over the past several months, the company has been rapidly expanding its online portfolio of products. And it will continue to do so.
"For example, historically we would carry 100 televisions--I'm using that as an illustration--100 televisions within the store," Vitelli said during the call. "Now we'll have over 400 televisions online, of which 300 will be online only. And that allows us to be very aggressive in the online-only pricing, because we have a similar operating model there to compete effectively in that channel."
Competing on prices with online competitors, such as Amazon.com, has been a struggle for Best Buy. Many of the products that Best Buy sells in-store can be purchased on the Web for much less. By building out its online marketplace, Dunn said his company can "be sharper on our online pricing and create the accurate price image of the sort of value Best Buy presents each and every day to our customers."
But Best Buy's online strategy goes beyond lower prices.
The company said that its in-store pickup service has been popular among customers, and it could be a key competitive advantage as it increases its online inventory. After the launch of "ship-to-store and friends and family guest pickup," the number of products sold online that were picked up in store jumped from 35 percent to 40 percent. In addition, the company said that 80 percent of all "large-screen TVs that were purchased online at Best Buy were picked up in the store."
The company will be targeting customers with its message.
"We intend to actively reach out to new customers...to take advantage of how easy it is to shop for, compare and buy with confidence at Best Buy in-store and online," Dunn said.