Best Buy Expands Same-Day Delivery in Bid to Ward Off Amazon
Bloomberg
Aug 31, 2017
Best Buy Co. is bringing its same-day delivery service to more than a dozen new cities as the biggest U.S. consumer-electronics retailer tries to keep pace with Amazon.com Inc.
Starting Sept. 6, the service will expand from 13 to 27 cities, including San Diego, Charlotte, Denver and Best Buy’s hometown region of Minneapolis/St. Paul, according to a company blog post. Best Buy will also cut the fee by more than half to $5.99 from $14.99, with deliveries handled by third-party providers.
Best Buy and other retailers such as Wal-Mart Stores Inc. and Target Corp. are racing to make online ordering more convenient to catch up with Amazon. It’s no easy task. Amazon garners more than half of all online sales traffic in 11 retail categories, according to a recent survey by Gordon Haskett Research Advisors, thanks to services like Prime Now that promise delivery in just a few hours in urban areas.
Best Buy has been making headway. Its online revenue rose 31 percent last quarter to $1.1 billion, the most it has ever generated in a non-holiday quarter.
“Our stores have always been an option, but we know that there are times when a customer wants their items delivered to them quickly,” said Allison Peterson, president of Best Buy’s online business. “By the holidays, many more customers will be able to choose same-day delivery and have it be an option on more items than ever before.”
The service should be available in almost 40 cities by the start of the holiday shopping season, the company said.
Customers who place their orders by 3 p.m. will receive the goods by 9 p.m. that night, Best Buy said, although the deadline will be an hour earlier on Sundays. The retailer started the same-day service in California’s Bay area in late 2015, and broadened it last year to cities including New York, Los Angeles and Atlanta.