Earnings   //   May 27, 2021

How Best Buy is rethinking the role of its store employees

As Best Buy is mapping out its post-pandemic future, its store employees are becoming responsible for more than just selling product.

During the electronics retailer’s first quarter earnings on Thursday, CEO Corie Barry spoke about how the company is rethinking the role of its store employees. Like many other retailers, Best Buy saw huge growth in fulfillment services like curbside pickup during the pandemic, so it’s testing out how it can reformat its stores in order to fulfill more online orders. And, it’s testing out using some of its store employees to delivery same-day orders to customers homes. Lastly, Best Buy is also thinking about how to train more of its employees to specialize in certain services, such as advising on home theater setups.

“We are currently looking at how we can best deploy our team and our physical assets to meet these customer expectations and needs,” Barry said, specifically referring to the fact that more customers now want to buy products both online as well as digitally, and want to get products quickly regardless of what channel they order them through.

“As we emerge from the pandemic we are seeing that the lines between online and offline shopping have become even more blurred,” Sarah Marzano, director analyst at Gartner said in an email.

Best Buy reported significant sales growth during the pandemic, fueled by more people buying electronics for their home, particularly during the early days of the pandemic when people were in need of home office equipment. So far, Best Buy’s sales growth hasn’t slowed down significantly — during its first quarter earnings on Thursday, Best Buy reported that sales were up 36% year-over-year, fueled by another round of stimulus checks early in the year, totaling $11.64 billion.

Best Buy did not break out how much online sales grew during the first quarter, only that “sales online and at stores open at least 14 months grew by 37.2%.” Company executives have previously said that they estimate online sales will make up about 40% of total domestic sales in 2021.

Now, the company is looking for ways to keep the momentum going and keep customers coming back to Best Buy as they now have more places to spend their money.

Given the huge increase in online sales last year, one of the main ways that Best Buy is rethinking the role of its store employees is by using more of them to deliver packages to customers’ homes. Barry said that Best Buy started testing this out last holiday season, sending employees out to deliver packages wearing Best Buy’s marquee blue polos, and delivering packages in branded Best Buy vans. Barry did not say on the earnings call how many employees are delivering packages, but said that they primarily fill orders that request next-day shipping.

The bet is that by using Best Buy employees, it will ultimately result in a better delivery experience. “Typically, the customer feedback we hear is, I wasn’t expecting a Blue Shirt necessarily to come walking up with a package and deliver it safely to my home,” Barry said.

Additionally, Best Buy employees are also increasingly being called to fulfill more orders in stores thanks to the increase in popularity of services like curbside pickup, which Best Buy rolled out for the first time during the pandemic. Barry said that Best Buy is testing out a variety of store formats as it figures out how much floor space to allocate to selling products, versus how much to dedicate to fulfilling online orders. She did not, however, share specifically how much space is being dedicated to fulfilling online orders at these test stores.

All of these moves come as Best Buy also laid off about 5,000 employees in February, as it shifted more part-time roles to full-time roles. Barry said that Best Buy’s headcount was down 17% at the beginning of 2021 compared to the beginning of 2020. But, that the percent of total employees that are now full time is now 60%, compared to 54% pre-pandemic.

During the earnings presentation, Barry also said Best Buy was also looking at “upskilling and reskilling” store employees to help more with specialized customer services, such as virtual consultations, as well as some of the in-home tech advisory services that Best Buy offers. Barry said that Best Buy now has 3,000 employees that it now classifies as “consultants and designers” — that includes its in-home tech advisors, as well as employees on how to set up home theater equipment.

Marzano said that the desire to use more store employees to assist with customer services — and especially with virtual consultations — grew during the pandemic.

“[These retailers] recognized the opportunity in offering the kind of high touch, expertise service  that is more frequently associated with in-person shopping to augment the online shopping experience,” Marzano said. “This type of offering started as an innovative necessity driven by store closures but is likely to persist for retailers who have seen success.”