Best Buy Co., Inc. (NYSE:BBY) has improved significantly since its last CEO’s departure more than a year ago, and the stock price has more than doubled since then. The New CEO, Hubert Joly, continues to turn around and transform Best Buy with solid executions.
Renew Blue is the blueprint which Best Buy Co., Inc. (NYSE:BBY) follows to transform itself, helping the company to refocus. Consequently, Best Buy has successfully been reducing cost and boosting its investment in e-commerce.
Renew Blue is aiming to solve two major problems, declining comps and declining operating margins and to transform Best Buy into the preferred authority and destination for technology products and services. Renew Blue is based on five pillars, mainly to enhance the customer experience, attract and inspire employees, work with vendors, increase return on investment capital and maintain Best Buy’s leadership role.
With the progress of Renew Blue, Best Buy Co., Inc. (NYSE:BBY) has also signed an agreement with Microsoft Corporation (NASDAQ:MSFT) to open in-house stores for Microsoft, following Apple Inc. (NASDAQ:AAPL)’s and Samsung‘s examples.
Windows store-within-stores, on average, will be ten times large than the Apple stores in Best Buy Co., Inc. (NYSE:BBY), and five times larger than the Samsung ones. Microsoft Corporation (NASDAQ:MSFT) will be opening its stores within 500 Best Buy location in the United States and 100 more in Best Buy and Future Shop stores in Canada. Microsoft will be displaying its products, ranging from Windows tablets and Windows phones to Xbox consoles and PC products. At the same time, Best Buy is also running an online version of Windows stores. Both companies have invested heavily into this venture, which will benefit Microsoft Corporation (NASDAQ:MSFT)’s exposure while helping Best Buy to utilize its space more effectively.
With the success of Renew Blue, Best Buy Co., Inc. (NYSE:BBY) has recorded two consecutive quarters of nearly flat comps in its US business. The online sales also grew 16% in the last quarter, while the company continues to gain market share. Best Buy’s net promoter score, NPS, which measures customer satisfaction, has also improved significantly since last November.
As for the cost reduction, the company has managed to cut $325 million in the overall cost by increasing its focus and efficiencies, as well as delivering the organization. Best Buy is also entering a definitive agreement to sell its European joint venture, thus to simplify the company and boost profitability.
Best Buy Co., Inc. (NYSE:BBY) continues to face strong competition online while its competitors, such as Amazon.com, Inc. (NASDAQ:AMZN), continues to evolve and adapt. Amazon.com, Inc. (NASDAQ:AMZN), which offers one of the largest selections online, continues to expand on all fronts, including the opening of 3D printing stores and the partnership with Viacom, Inc. (NASDAQ:VIA) to offer thousands of shows from Nickelodeon and Comedy Central on its Amazon Prime Instant Video platform. Amazon continues to aiming for the growth of sales volume and subscribers.