Look out, Amazon Smart Home Services. Best Buy (NYSE: BBY) is planning to hire hundreds of salespeople to visit customers and make home technology recommendations for free.
The new Home Advisor program “allows us to unlock latent demand,” says Hubert Joly, CEO, Best Buy. “What we’re finding is people in the home tend to spend more because we address a bigger need for them compared to what they spend in the store.”
Best Buy has tested the service in several cities and plans to roll it out across the United States this fall. The company is probably also trying to drum up business for its Geek Squad, which provides tech repairs and in-home installations for a fee.
“Our in-home advisors are professional sales consultants with broad product knowledge,” adds Joly. “They provide free consultations and serve as a single point of contact covering all technology needs across all vendors. In other words, they can help you design including place a great entertainment system, help you pick out your appliance for a kitchen model or help you steam music and content across your home without annoying buffering issues.”
This past July, Best Buy's stock dipped when Amazon launched its Smart Home Services, which offers free in-home consultations on everything from networking to voice control to smart lights and thermostats. Looks like the two will compete for this space.
Best Buy Reports Better Than Expected Q2 Results
Best Buy reported its biggest comparable sales increase in nearly seven years on Aug. 29, the last day of its second quarter, suggesting that the company’s efforts to reinvent its stores to showcase specific brands is paying off.
The company said its comparable sales rose 5.4 percent in its second fiscal quarter, which eclipsed the 2.2 percent expected by Wall Street. The company attributes the increase to demand for wearable devices, appliances and smart home systems.
Meanwhile, online sales rose 31 percent to $1.1 billion.
“Online sales were more than $1 billion for the second consecutive time in a non-holiday quarter and were 13.2 percent of domestic revenue, up from 10.6 percent last year,” says Joly. “We are on pace to generate well over $5 billion in domestic online sales this fiscal year.”
Best Buy also reported GAAP diluted earnings per share from continuing operations of $0.67, an increase of 20 percent from $0.56 in last year's Q2. Non-GAAP diluted earnings per share from continuing operations were $0.69, an increase of 21 percent from $0.57.
“We are pleased today to report strong top and bottom line growth for the second quarter of fiscal 2018,” says Joly. “Our higher-than-expected comparable sales of 5.4 percent were driven by stronger consumer demand for technology products and by the strong execution of our strategy. Against a backdrop of continued healthy consumer confidence, we believe broad-based product innovation is resonating with consumers and driving higher spend.”
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