Best Buy announces major product change to lure back customers | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Best Buy (BBY) , a nostalgic electronics retailer that reached peak popularity in the ‘90s and early 2000s, is switching gears to help reverse a concerning pattern of customer behavior.

During the first quarter of this year, Best Buy’s U.S. comparable sales dropped by 0.7% year-over-year. Specifically, it saw sales decline in consumer electronics, appliances, and entertainment.

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The dip in sales comes after Best Buy raised prices in its stores due to President Donald Trump’s tariffs.

Many consumers across the country have been limiting their spending due to worries that tariffs will make everyday goods more expensive.

A recent survey from market research company Numerator found that 86% of consumers are concerned about tariffs wreaking havoc on their finances.

As a result, 81% of consumers are changing shopping habits in response to tariffs, including delaying nonessential or expensive purchases, buying fewer imported goods, searching for sales and coupons, and switching to shopping at lower-priced retailers and discount stores.

During an earnings call on May 29, Best Buy CEO Corie Barry confirmed customers are avoiding making big-ticket purchases amid recent economic concerns. However, she said that while customers are cautious about their spending, they are still willing to pay more for innovative products.

“We see a consumer who is seeking value and sales events, and they are willing to spend on higher price points when they need to or when they see compelling new technology…” said Barry.

“And there are some categories where, if you take something like televisions, we can definitely see consumers trying to make some of those value trade-offs. But at the same time, we see this continued strength in computing and tablets, where there’s both need and innovation, and they’re willing to go ahead and spend in those areas.”

Best Buy has switched up its product offerings.

Image source&colon; Kamil Krzaczynski/Getty Images

Best Buy announces unexpected move to boost sales

To attract more shoppers, Best Buy just made a significant change to its product assortment, tailoring it to growing consumer interest in innovation.

The retail chain has just launched a new digital marketplace, which doubles the number of products customers can shop for on its website and app, and adds new brands and categories.

Specifically, Best Buy expanded its product lineup of technology and small appliances from big brands such as Samsung, LG, Eufy, Martha Stewart, etc. It also tripled its furniture assortment and expanded its collection of indoor and outdoor seasonal decor for the holidays.

Best Buy also introduced musical instruments to its product lineup, which features guitars, drums, and more. Its toy collection also got a boost of new products.

In addition, Best Buy added movies in Blu-Ray, DVD, and 4K SteelBook formats to its digital marketplace.

“Our customers have always looked to us to bring excitement and inspiration in ways only technology can,” said Chief Marketplace and eCommerce Officer Frank Bedo in a press release. “With marketplace, we’re able to give them not only more of the latest technology, but a massive new collection of products outside of the tech space, so we can truly offer the full experience they need.”

Customers can even return products they purchased through a seller on the digital marketplace to their local Best Buy store.

Best Buy just became a major threat to Amazon

The move from Best Buy gives it more of a competitive edge over Amazon, one of its top rivals.

According to Numerator’s Consumer Electronics Tracker, Best Buy and Amazon dominate the consumer electronics market. Best Buy accounted for 30% of overall sales in select consumer electronics categories in the past year, while Amazon accounted for 29%.

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Amazon has grown to become a major threat to Best Buy as the online retail giant continues to attract more consumers through its Amazon Prime benefits.

For example, the company’s Amazon Prime Day sale this year generated $24.1 billion in online U.S. sales, a 30.3% year-over-year increase, according to data from Adobe.

This comes after Amazon Prime, which is $14.99 a month, attracted about 180.1 million U.S. subscribers last year, according to data from Statista. This number is about 44% higher than the number of U.S. subscribers it had in 2017.

Amazon Prime is projected to reach 185 million U.S. subscribers this year as the service continues to see increased consumer demand.