Best Buy is opening up a Seattle-based technology development center focused on developing its mobile and e-commerce capabilities. Not surprising as L2’s Digital IQ Index: Big Box report finds brands in the category to be ingesting in tech-heavy omnichannel solutions. High shipping costs paired with consumers’ rising expectations for delivery speed at a low cost has eroded online-only retailers’ margins. (Last year, Amazon collected $3.1 billion in shipping fees but shelled out $6.6 billion in transportation services.) But investing in omnichannel isn’t cheap either. A look at Big Box margins in the past year shows they are still waiting for returns on their investments.
For some these investments have started to pay off, at least in reputation. Best Buy was able to beat Amazon in delivery time and cut shipping costs by shipping from the nearest store instead of a centralized warehouse.
Best Buy was Genius and ranked sixth in our omnichannel. Their mobile and desktop sites offer a variety of delivery options, while their mobile app allows consumers to check item availability by closest store or fastest in-stock. As exhibited by the graph below, they are considered an omnichannel role model with a balance of e-commerce and in-store drivers.
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