The strategies of Hubert Joly, the current chief executive officer of Best Buy Co., Inc. (NYSE:BBY) in reviving the business of the electronics retailer has been noticeably effective, particularly during the Black Friday sale, according to an analyst.
Best Buy new pricing strategy attracting consumers
Over the past few years, Best Buy Co., Inc. (NYSE:BBY) struggled competing with its peers in the retail industry. However, the new pricing strategy of the electronics retailer is attracting consumers as observed by Brian Sozzi, chief equities strategist at Belus Capital Advisors.
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Sozzi noted the success of the new-and-improved strategy of Best Buy Co., Inc. (NYSE:BBY) in a note to investors. According to him, “I am noticing greater attention to customer service and all departments well-trafficked. People were buying things…not showrooming.” He also commented that Best Buy stood out among the retailers he visited on the night of Thanksgiving.
A separate report from analysts at Goldman Sachs Equity Research indicated that they observed the improvement in pricing competitiveness at Best Buy Co., Inc. (NYSE:BBY).
The new TV pricing of Best Buy
Goldman Sachs analyst, Matthew J. Fassler and his fellow analysts noted that the new TV pricing of Best Buy Co., Inc. (NYSE:BBY) has the smallest gap to the prices offered by Amazon.com, Inc. (NASDAQ:AMZN) over the past four years. The analysts said, “BBY has successfully removed price as a barrier within the TV category.”
According to the analysts, the new TV pricing of Best Buy Co., Inc. (NYSE:BBY) is only 1% higher than Amazon.com, Inc. (NASDAQ:AMZN) compared with the 3% last October 29 and 4% average price difference since 2011.
Compared with the TV pricing of Wal-Mart Stores, Inc. (NYSE:WMT), the analysts said Best Buy Co., Inc. (NYSE:BBY)’s price is 2% lower. It is the lowest pricing offered by the electronics retailer since 2011.
Fassler and his colleagues said, “Discounter stores have taken note on BBY’s improved positioning and are offering a competitive response.” According to them, the average discounts of Best Buy Co., Inc. (NYSE:BBY) for its Black Friday weekend promotions are 33%.
The analysts believed that the electronics retailer is now in better position to compete for market share against its peers in the industry.