Best Buy Co. Inc. reported better-than-expected sales for its fiscal first quarter 2019 ended May 4.
Its U.S. online sales grew 14.5% to $1.31 billion over the comparable period last year when it generated $1.02 billion, thanks to higher average order values and increased traffic to BestBuy.com, the retailer reports. Best Buy’s online revenue comprised 15.4% of its overall U.S. revenue, which grew 0.8% to $8.48 billion year over year.
Buy online pick up in store continues to climb for Best Buy, No. 13 in the Internet Retailer 2019 Top 1000. “Even with all the improved shipping options and enhancements available to our customers, they are increasingly choosing to pick up their products in one of our nearly 1,000 stores,” said CEO Hubert Joly in an earnings call transcribed by Seeking Alpha. “And so in-store pickup of online orders is now about 40% of our online revenue and growing.”
The retailer improved its shipping options thanks to logistics system integrator Bastian Solutions, coupled with AutoStore—a bin storage system in which bins are stacked vertically in a grid and robots retrieve the bins by traveling on the top layer of the system—to overhaul its distribution centers. The process took about 12 months to implement, but the retailer declined to provide specifics on costs or when it started using the new system.
At each of Best Buy’s three metro ecommerce centers, the retailer now has 30,000 bins and 73 robots. Best Buy delivers about 30-40% of a store’s inventory from its metro ecommerce fulfillment centers and segregates store delivery by aisle, such as by smaller electronics, televisions or entertainment products. At Best Buy’s regional distribution centers—located in San Francisco, Atlanta and Findlay, Ohio—Bastian and AutoStore outfitted the centers with 150,000 bins and 195 robots.
“Through a combination of initiatives including expanded partnerships, the deployment of metro ecommerce centers across key cities and automation, we continue to improve our speed of delivery to customers and expand next-day and same-day delivery options,” Joly said.
In other ecommerce earnings news, Foot Locker Inc. (No. 61) reported its fiscal first quarter 2019 sales ended May 4 increased 2.5% to $2.08 million, compared with sales of $2.03 million for the prior-year period. The shoe retailer did not break out ecommerce figures.
“To build on this momentum and create even deeper connections with our customers, we continue investing in our digital capabilities, store fleet, and infrastructure, which we believe will deliver returns on both the top-line and bottom-line, creating shareholder value in the short and long term,” said chief financial officer Lauren Peters.
