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Best Buy Tests Limited SKUs on Store Floor to Make Space for Fulfillment

Retail Dive | November 30, 2020

Best Buy is testing new store formats at four locations in Minneapolis for stores as fulfillment hubs. These new formats will limit SKU assortments to the most popular items in shoppable areas, which will be nearly half the size. Allowing the rest of the space to be dedicated to pickup and ship from store, CEO Corie Barry.

Barry laid out a "hypothesis of stores as more primary fulfillment hubs". She acknowledged the tests are in early stages and on a small scale. "We're learning," she said.

The retailer will add 90 ship-from-store hubs during the holiday season, supplementing the 250 ship-from-store locations Best Buy launched in September. Barry said she expects the 340 locations to ship more than 70% of ship-from-store orders in Q4.

"Normally, we would not remodel any stores this close to the holiday season, but we feel it’s imperative to move quickly to gain the learnings about how the store format may complement our omnichannel strategy," Barry said.

Demand for Best Buy products during the pandemic has soared. Online sales grew 174% year over year in Q3, and Barry described "clearly elevated demand for products that help customers work, learn, cook, entertain and connect in their homes."

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