Best Buy is an American multinational electronics store located in Minnesota, United States. It was founded in 1966. It began as Sound of Music, an audio specialist store.
Best Buy is a worldwide consumer electronics retailer with 1779 locations in the United States, Canada, and Mexico. Richard M. Schulze founded Best Buy in Richfield, Minnesota, in 1966 with James Wheeler.
Best Buy has grown to become the leading consumer electronics shop in North America throughout the years.
CEO Corie Barry aims to establish comprehensive shipping capabilities in all 450 Best Buy locations by converting four stores into fulfillment centers.
Moreover, the strategy includes new initiatives, such as Shipt Driven, which begins in September 2020 and enables Best Buy to deliver products and services to customers.
|Company Name||Best Buy Co.|
|Founded Year||August 22, 1966|
|Founder||Richard M. Schulze|
|Headquarter||Richfield, MN, USA|
Best Buy’s internal fulfillment strategies accelerated domestic online sales by 242% to over $5 billion, bringing domestic online sales up to 53%, from 16% in 2019.
In fiscal Q2 ending August 2020, its overall quarterly revenue increased 4% year over year to $9.9 billion, while operating expenditures decreased by around $200 million.
Best Buy is well-positioned to gain from Apple’s 2021 introduction of 5G iPhones and Microsoft and Sony’s next-generation gaming consoles.
It was renamed several times throughout the years to emphasize consumer electronics. As the largest consumer electronics store in the United States, it has 1779 stores across the country.
The company is also the market leader in e-commerce. The website attracts about 31 million visitors per month, making it the sixth-largest e-commerce website in the United States. The company is also present in Mexico and Canada.
Thanks to the Best Buy web platform, Amazon and Walmart hope to lose significant market share by 2021 and beyond.
Best Buy is the market leader in the US e-commerce sector, but it faces stiff competition in both the offline and online retail sectors.
It plans to take market share away from big competitors such as Amazon and Walmart by 2021 and the following years.
This article will look at some of the top Best Buy Competitors & Alternatives who have been giving tough competition to the firm.
Top Best Buy Competitors & Alternatives
Walmart is a worldwide retail corporation located in Arkansas, United States. It was founded in 1962. It operates a chain of hypermarkets, cheap department shops, and supermarkets.
The company’s primary objective is to keep its prices low to assist its consumers.
Walmart is the world’s largest retailing chain and was rated 19th in Forbes’ Global 2000 ranking of the world’s largest public companies.
It generated $524.4 billion in yearly sales in 2020, employs over 2 million people, and runs more than 11,500 shops in 27 countries.
Walmart has about 11,718 shops and clubs in 28 countries. Additionally, it has an online store where they offer its items.
Walmart’s internal logistic system is well-maintained via the use of cutting-edge creative methods and technology. Walmart has an outstanding system in place for tracking product performance in each store and nation.
Walmart makes a concerted effort to deliver a distinctive shopping experience to its customers, both online and in-store.
Walmart and Best Buy both provide a diverse selection of consumer electronics and home appliances.
Best Buy, on the other hand, is more focused on consumer electronics than Walmart. However, Walmart’s market dominance offers it an advantage.
Walmart offers a gift card system to entice customers to make purchases. The gift card may be used to make purchases that may be redeemed at participating locations.
The client may check the status of their Walmart gift card on the internet.
Walmart has expanded to a greater level and reached millions of customers over the years, making it one of the top Best Buy competitors.
Walmart is among the top Best Buy competitors in 2021.
Amazon is the world’s largest eCommerce site, having begun in the United States in 1994. Jeff Bezos established the company, which has its headquarters in Seattle.
Today, with a market valuation of $ 756 billion, it is the most valuable brand. It employs 650,000 people and has 191 locations across 33 countries.
Amazon is an eCommerce behemoth on a global scale. It carries a comparable selection of consumer electronics to Best Buy.
Between 2015 and 2019, Amazon’s annualized sales growth rate was 27 percent, far greater than Best Buy’s 2.5 percent growth rate for the same period.
Amazon commercializes and delivers a wide variety of items, including consumer electronics, via its online marketplace. It is ranked third in this sector, after Best Buy and Walmart.
Additionally, it provides cloud services and smart home technologies. It earned $ 87.4 billion in yearly sales in 2019, with retail accounting for the lion’s share.
Amazon’s primary advantage is its eCommerce platform and lightning-fast delivery network.
With Best Buy’s powerful ship-from-store capabilities, more than half of online buyers will choose innovative fulfillment options such as curbside by 2020, resulting in a 242 percent increase in digital sales.
Best Buy’s unique fulfillment method has bolstered the company’s competitiveness. However, Amazon maintains a sizable advantage.
Target ranks third in revenue among discount retailers, bringing in more than $78 billion in 2020. It has 1,868 retail locations throughout North America that sell fashion, consumer electronics, and other products.
Target Corporation, often referred to as a direct competitor of Best Buy is the second-largest department store retailer in the United States. The company was founded in 1902 and is headquartered in Minnesota.
It is a retail business that sells food and pet supplies and household items, accessories, apparel, and home furnishings.
Target’s revenue will climb by 21% year over year in the third quarter of 2020, fueled by strong digital sales. Target’s digital sales increased by 155 percent, trailing Best Buy’s 242 percent gain.
Its digital-enabled services climbed by 200 percent, compared to Best Buy’s 41 percent.
The company operates exclusively in the United States and also operates an online store.
This company’s primary strength is its substantial presence in the US retail industry. Target benefits from economies of scale because of its massive purchasing power, enabling low prices.
Target Corporation’s products are reasonably priced but trendy. Target Corporation has altered its pricing strategy in response to market shifts and created numerous promotions such as ‘Expect More Pay Less’ and ‘Low Price Promise.’
In 2020, Target acquired $6 billion in market share from competitors. It is a deserving top-three rival for Best Buy.
This adds value at a reasonable price and has a huge consumer base. Target Corporation has launched REDcard Rewards to increase customer loyalty and maintain the security of the company.
Wholesale retailer Costco operates 803 warehouses and sells various products through its eCommerce platform.
Costco’s annual sales are expected to reach $163.22 billion in 2020, up 9.3 percent from $149.35 billion in 2019.
The company’s headquarters are in Washington, D.C. It is a leading retailer of organic foods, choice, prime beef, wine, and rotisserie chicken globally. It is a network of warehouses that are available only to members.
A further increase of 107.8 million membership cardholders is expected in 2020, compared to 86.7 million in 2016. Costco’s memberships are renewed by nearly 90% of its members every year.
Costco, like Best Buy, has a strong omnichannel strategy that incorporates warehousing and e-commerce.
The company’s primary strength is its competitive pricing strategy, which has resulted in increased client loyalty.
Costco maximizes production while minimizing its production expenses.
The system they use to distribute products complements the pricing strategy they use.
Costco employs a four-pronged strategy to build a sustainable and ecologically responsible corporation.
The four-pronged approach emphasizes improving the warehouse’s energy management system, lowering its carbon footprint, implementing packaging design initiatives, and developing a waste stream management system.
Costco operates in several countries and offers an enticing value proposition to its devoted customers, making it a leading Best Buy competitor.
Alibaba is a Chinese e-commerce behemoth that operates on a global scale through Alibaba.com.
Alibaba’s worldwide business-to-business arm has expanded rapidly into over 200 countries.
Alibaba, another online Best Buy competitor, was founded in 1999 and is headquartered in Zhejiang, China.
It is a well-known brand that operates as a middleman for business to consumer, consumer to consumer, and business to business e-commerce transactions. Alibaba’s internet platform facilitates wholesale transactions.
Alibaba.com expanded to American vendors in July 2019 and is now directly competing with Best Buy.
Alibaba.com’s international commerce wholesale business generated $1.4 billion in sales in the fiscal year 2020 ended March 31, a 17% rise year over year.
It is a well-known brand in China and is currently attempting to grow into other nations as well. It owns and operates a diverse range of worldwide enterprises in a variety of sectors.
The United States is Alibaba.com’s fastest-growing market, with over 10 million firms transacting on the site.
Alibaba offers a similar selection of consumer electronics to Best Buy, posing a challenge to the retailer’s market share.
Alibaba operates in roughly 200 countries and is often regarded as the world’s largest retailer. It is a one-stop-shop for various product categories, including apparel, electronics, machinery, and home and garden.
Alibaba’s online store is available 24 hours a day, 7 days a week, from any location and at any time.
Alibaba will launch freight shipping services for SMBs and virtual trade exhibitions for manufacturers and distributors based in the United States in June 2020.
These additions will further bolster Alibaba.com’s competitive lead against Best Buy in 2022.
6. Office Depot
Office Depot is a market leader in the office supply and technology solutions industries. Its extensive assortment of home-office technology includes printers, personal computers, external hard drives, and keyboards, among others.
Office Depot is a specialized retailer in the United States of America founded in 1986 and headquartered in Florida.
The company operates around 1,400 retail locations, an online store, and a business-to-business sales operation.
The integrated omnichannel platform of Office Depot consists of 1,400 shops, an e-commerce site, and a team of dedicated salespeople and technicians.
Office Depot acquired OfficeMax in 2013, bringing the company’s yearly revenue to around $11 billion.
This company’s primary strength is that it provides a one-stop-shop for all office-related products.
The corporation generates around $11 billion in yearly revenue and employs approximately 38,000 people across its numerous operations in the United States.
Office Depot is committed to developing novel and innovative solutions to assist its clients in managing their businesses.
Staples made a $2.1 billion offer to acquire Office Depot in January 2021. It will be possible to create an even stronger competitor for Best Buy by combining two of America’s largest brick-and-mortar stationery stores.
The organization has an outstanding supply chain management system in place and a robust distribution network. It has a strong brand image, which contributes to its status as a top Best Buy rival.
Kmart is an American retailer founded in 1899 and headquartered in Michigan, United States. Kmart’s items are competitively priced.
KMart carries a wide variety of things, including garments, shoes, linen, jewelry, cosmetics, toys, cuisine, and small electronics.
Kmart is a cheap retailer based in the United States. The firm has battled to stay viable in recent years, shuttering nearly 2,000 locations.
However, Kmart continues to run approximately 34 stores in major US cities.
The majority of their locations are in densely populated urban areas. Additionally, the organization offers a fantastic Layaway program for customers who like to pay in installments.
The business sells consumer electronics at a discount, which may lure some Best Buy customers.
The primary reason for KMart’The business enjoys a healthy consumer base.
KMart has always supported charitable organizations dedicated to improving the lives of those in need within the communities where it operates.
Staples is a well-known office supply retailer specializing in office supplies and equipment such as coffee makers, PCs, and printers. The company operates 1,079 stores and 40 fulfillment centers and warehouses in the United States.
Staples Inc is an international lifestyle and retail company headquartered in Massachusetts, United States. It was formed in 1986. Staples is a discount retailer of office supplies, furniture, and gadgets.
Additionally, Staples distributes certain of its products through business-to-business distribution operations. Sycamore acquired Staples for $7 billion four years ago.
The company’s yearly revenue is expected to decrease roughly 30% by 2020 to $9 billion due to a sharp decrease in demand for office equipment.
It operates over 1500 locations throughout North America. Its business is mostly focused on businesses in the United States and Canada.
The company’s primary products include promotional items, office machinery, technology, furniture, and business services sold through online and brick-and-mortar locations.
The corporation expands its product line, which simplifies shopping and saving.
Staples made a $2.1 billion offer to acquire Office Depot in January 2021. If the purchase is completed, it will strengthen Staples’ competitive edge over Best Buy.
The organization offers numerous opportunities to save, ranging from special discounts to rewards programs and more.
They offer daily bargains, coupon redemption, a loyalty program, and a business discount program, among other things.
It offers numerous ways for clients to buy at their convenience, including the in-store, online, mobile app, order online and picks up in-store, and easy reorders.
Sears is another competitor of Best Buy. The company is based in Illinois, United States, and was founded in 1886.
It is a unified store that focuses on bridging the physical and digital shopping experiences to serve customers in any place.
The corporation operates in the United States through its subsidiaries, including Sears, KMart, Roebuck, and Co.
It offers a diverse range of products, including fashion, home furnishings, vehicle components, and services. With over 14 million service calls per year, it is the largest provider of home services.
Sears has received numerous honors from a variety of reputable organizations. It has its line of flagship brands, which makes it a formidable competitor to Best Buy.
eBay is a well-known e-commerce corporation founded in 1995 and located in California, United States. eBay is a multibillion-dollar company with operations in around 30 countries.
eBay is best known for its auctions of gently used clothing and collectibles, but it also sells everything from gently used devices and equipment to brand new items such as Smart TVs.
The majority of eBay merchants, like Amazon sellers, use the site to sell their products.
eBay offers refurbished iPhones at a fraction of the new iPhone 11s for consumers who can’t afford the absurdly high prices.
A growing number of eBay visitors has led major corporations, such as Best Buy, to launch their own eBay stores. You can join them if you’re unable to defeat them.
eBay.com is the company’s online auction and shopping website, where customers may purchase and sell various things.
The website features an intuitive user interface with a concentration on C2C and B2C e-commerce.
Additionally, it provides a unified service such as online ticket tracking and online money transfer.
The organization is well-known on a global scale, which results in a sizable consumer base. The company sells a variety of things, including electronics, clothes, household appliances, and furniture.
11. Apple Store
Apple is a multinational technology corporation best known for its consumer gadgets such as the iPhone, Mac computers, iPods, wearables, and smart home products.
Apple created the Apple Store to sell all its technology goods and provide repair and other services directly to consumers.
Apple is a technology firm founded in the United States of America in 1977.
It began with the Apple 1 hand-made computer development by Steve Jobs, Steve Wozniak, and Ronald Wayne, which became famous for popularizing the graphical user interface.
The company creates and produces consumer electronics, such as the iPhone, the Mac line of computers, the iPad tablet, and various wearable and smart home products. Its market capitalization was $1 trillion in 2018.
Apple Store is a retail location that accounts for almost half of Apple’s income. Apple was the fourth largest consumer electronics retailer in 2019, after Walmart, Amazon, and Best Buy.
However, it is largely reliant on in-store visits, which exposed the firm to the crisis’s consequences.
In the United States, there are 271 Apple shops, and more than 90 remained in the first half of 2020.
Apple created the Apple Store, a retail location where it sells its whole inventory of technology items and provides other services such as repair. It contains an e-commerce platform and does not sell hardware from other parties.
The firm employed 137,000 people and had a revenue of $ 260.1 billion in 2019. The iPhone sales account for almost half of Apple’s income.
It is the fourth largest consumer electronics retailer in the United States, after only Best Buy, Walmart, and Amazon.
12. Home Depot
Home Depot is a home improvement retailer with about 2,269 locations, primarily in North America.
Home Depot’s valuation has been steadily increasing in recent years, reaching approximately $28.798 billion.
As with Best Buy, Home Depot will transform a portion of its shops into fulfillment centers in 2020 to handle the anticipated increase in online orders.
Home Depot will introduce the One Home Depot model in 2020, which will be more effective and integrated than Best Buy’s fulfillment model.
However, most clients visit Home Depot to acquire building supplies and shop at Best Buy for gadgets and appliances.
How Does Best Buy Generate Revenue?
Best Buy is a retail outlet that earns revenue from various streams discussed below:
1. Merchandise Sales
Best Buy’s primary revenue sources include retail sales of digital and mobile devices and consumer electronics such as fitness equipment, portable audio, smart home technology, and drones.
The merchandise category generates 93% of revenue. It is the largest retailer of consumer electronics in the United States.
The second pillar of Best Buy’s business is technical support services. It includes consulting, design, delivery, installation, membership, extended warranties (extended warranties), repair, setup, and technical support. When combined, they represent 5% of total revenue.
Final Words on Best Buy Competitors
Retail businesses do their best to satisfy the increasing needs of shoppers in public spaces. Best Buy makes a concerted effort to fulfill the needs of its customers by delivering high-quality items.