Best Buy Launches Small-Format 'Digital First' Stores

Best Buy opened this week its first small format, “digital first” outlet, a 5K SF store that offers mobile self-checkout and allows customers to scan product QR codes for front-desk pickup or around-the-clock pickup from lockers, the electronics retail chain announced this week.

Best Buy’s first small-format 5K SF store is opening in Monroe, NC, featuring what the company is calling a “curated” product selection as well as livestreaming employee service for product advice, which lets shoppers contact experts online via voice calls, video links or chat.

The company’s announcement says the store is stocked with “best-in-category” products including TVs, home theaters, computers, phones and wearables. Major appliances aren’t sold in the small-format outlet, but customers can order them online and pick them up at the Monroe outlet.

Shoppers also can scan products on display in the outlet—the small-format stores are oriented for product demos—and employees will bring the items from the stockroom to the front register for pickup. For smaller products, the Monroe outlet has placed pick-up lockers outside the store where customers can pick up a scanned order 24/7.

The small-format pilot store also offers a collection of what Best Buy calls “grab-and-go” items—charging cables, cell phone cases, gift cards, etc.—that are available for mobile self-checkout. Customers who scan the barcodes using the Best Buy app can complete the purchase, grab their stuff and leave.

The small-format stores also feature Best Buy’s in-store Geek Squad expert advice and repair services.

As it adjusts to customer preferences for e-commerce purchases, Best Buy has experimented with several concepts to adjust its big-box stores—which generally have a footprint of up to 40K SF—and introduce new outlets that sell open-box products at discounts and are equipped to handle more repairs that the older store format.

The company has experimented with stores of sizes ranging from 14K SF to 35K SF. In existing big-box stores, Best Buy has reduced the footprint of its sales floor and limited some SKUs to make room for in-store fulfillment of online orders.

“Our belief that [is] there’s no such thing as a single, perfect store—instead, it’s all about a mix of different types of experiences working together within a specific community,” Best Buy said, in a statement.

During the past year, Best Buy has deployed new store concepts in the Charlotte market, reducing its overall square footage in the market by 5% and increasing customer coverage in the market by up to 85% by adding 260 access points for customer pickups and employee deliveries, according to a transcript of Best Buy’s Q1 earnings call.

The small-format outlet that debuted in Monroe is the company’s second effort to introduce mobile store outlet. Several years ago, Best Buy launched a series of outlets with store footprints of less than s2K SF in shopping malls but closed them down in 2018.