NPD Group on Best Buy’s Market Position and Future Outlook

April 30, 2012

Best Buy has been in the news quite a bit recently with their CEO Brian Dunn stepping down after an investigation into his personal conduct along with questions about the long-term viability of the company. The problems in the consumer technology industry are structural hitting all retailers, suppliers, and brands equally. Retailers were the first to see declining growth with Best Buy being the primary example since they are the biggest and most successful retailer in the industry. Its not that the company didn’t see these changes coming but how dramatically and swiftly they happened over the past year caught them off guard. Despite the problems in the consumer technology industry, Best Buy has done a good job coping with the changes to its business and preserving its legacy strengths.

In 2011, Best Buy’s share of consumer technology revenue stood at 19 percent of hardware sales, according to NPD’s Consumer Tracking Service, exactly what it was in 2010 and what made it the leader in sales by a substantial margin. Best Buy also was the number one brick-and-mortar retailer online and gained almost one point in revenue share, now 22.4 percent, among retailers on the Web. In computers Best Buy’s market share is 10 points higher than any other outlet that sells Windows notebooks and generates 2X more revenue from those sales than any other retailer. They are the largest retailer of Apple notebooks, selling one in every four notebooks in theUS, a number that is 6X larger than any other Apple reseller.

In the fast-growing TV segment of 50” and above, Best Buy’s market share was 31 percent and more than 3X higher than any other retailer. They also sold more tablets than any other retail store or Web site in 2011. In addition, Best Buy saw its unit share of the cell phone sales grow by 25 percent in 2011 and its share of smartphone sales increase by 50 percent. They were the single largest non-carrier outlet for smartphone sales. In all of the most important product categories, ones which represent more than 50 percent of U.S.consumer technology revenue, Best Buy by any objective measure is either gaining share rapidly or maintaining its industry leading position. While there are challenges ahead, Best Buy remains the dominant retailer and in the best position to succeed in the coming years. To read the full article please visit http://www.npdgroupblog.com/2012/04/best-buy-reconstructed/.

The NPD Group, founded in 1967, is the leading global provider of consumer and retail market research information for a wide range of industries. We provide critical consumer behavior and point-of-sale (POS) information and industry expertise across more industries than any other market research company. Through our consumer panel, retail sales tracking services, special reports, and custom research, we help our clients understand and profit from consumer and retail trends. Our data tells them who is buying, what, where, and why in local, national, and international markets. For more insights from The NPD Group, please call 1.866.444.1411 or email at contactnpd@npd.com.

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