40 Percent of Best Buy Online Purchases Picked Up in Stores

For many retailers, cross-channel functionalities such as buy online/pick up in store are a win-win: customers like the service, and retailers get another opportunity to build relationships and even make additional sales. Best Buy, recognized as a leader in cross-channel retailing, has achieved a 40% buy online/pick up in store rate, according to CEO Brian Dunn.

Dunn, speaking during a conference call discussing financial results of Q2 2011, which ended August 28, 2010, said "We know that 60% of our U.S. store sales are influenced by our customers' experience on bestbuy.com and 40% of the products we sell online are picked up in-store and our multi-channel approach will serve us well into the holiday season."

Best Buy was honored with one of the RIS News 2010 Fusion Awards for excellence in cross-channel retailing.

The retailer is also using its customer loyalty program to lower promotional costs by providing richer benefits to better, more engaged customers. "We had been looking at the effectiveness of our various promotions that we run throughout the year, in utilizing the background information that we have on customers primarily from our Rewards Zone program," said Jim Muehlbauer, executive vice president of finance and CFO. "We made some changes to our loyalty program last year to provide richer benefits to our better customers in the portfolio and reduce expense associated with folks who weren't that engaged with Best Buy," he added.

"It most predominantly shows up in our higher ticket categories like appliances and home theater, where customers are getting a lot of Reward Zone points for those purchases in their portfolio. So it's turning the dials," said Muehlbauer.

In addition, the retailer is betting heavily on sales of mobile consumer technology, having opened its 100th stand-alone Best Buy Mobile store and selling smartphones online for this first time beginning later this year. Dunn discussed the retailer's Connected World strategy, saying "Best Buy Mobile is the tip of that spear, the single biggest driver of profit growth for us this year and the key to raising our margin guidance for the year."