Best Buy’s stock has plunged 43% since October. It’s not exactly the turnaround shareholders hoped for.
But, StellaService data shows the retailer has made significant improvements in at least one very important business performance metric – speed of delivery.
Many industry watchers are asking, “How is Best Buy going to compete with Amazon.com?” Obviously, speed of delivery is an area retailers are battling to best each other. It seems Best Buy has found an advantage.
As Amazon continues to build warehouses nationwide with the goal of delivering packages faster, Best Buy has been leveraging infrastructure that has already been in place. The big opportunity for Best Buy is in “mini-warehouses,” shipping from stores to get orders in the hands of customers faster.
When Best Buy announced plans in June to implement a ship-from-store strategy, the retailer’s average Total Days to Delivery was around 5 days, spiking to nearly 7 days in mid-August, according to StellaService data.
In September StellaService data shows some impressive efficiencies beginning to surface. Best Buy’s Total Days to Delivery dips to 4 days, 18 hours, compared to 4 days for Amazon.com.
By October, Best Buy orders were being delivered to StellaService Analysts faster than Amazon.com orders. In fact, Best Buy was faster all throughout the fourth quarter (averaging 3 days for delivery), which includes the busy holiday season.
StellaService ordered from BestBuy.com, placing multiple orders in four regions of the U.S. The majority of orders from the fourth quarter of 2013 were shipped from a nearby Best Buy store.
“It’s not just that they’ve implemented ship-from-store – they’re doing it better than everyone else,” said Kevon Hills, director of research at StellaService. “Other big-box retailers have rolled out ship-from-store, but Best Buy seems to have created a blueprint that is having a tremendous impact on its business.”
With about a thousand stores in U.S., Best Buy’s ship-from-store initiative proved effective in all regions of the U.S. tested by StellaService. And, that large physical footprint – once viewed as a crippling cost for the retailer – may be an advantage over an online-only retailer with far fewer distribution centers.
Hills also noted that Best Buy is fulfilling orders same-day, which helps speed of delivery.
“One of the challenges of ship-from-store is training in-store teams to pull, pack and ship,” Hills said. “Best Buy has figured out a way to get orders out for delivery same-day, a sign they’ve built a very smart process and their employees have bought in to this initiative.”
Previously on Bright: