Ava AbbottBest Buy is a multinational consumer electronics retailer with 1779 stores spread across the US, Canada, and Mexico. The company is based in Richfield, Minnesota, and was founded in 1966 by Richard M. Schulze and James Wheeler.
Over the years, Best Buy has expanded to become the largest consumer electronics retailer in North America. In 2020, Best Buy converted four of its stores into fulfillment hubs as part of CEO Corie Barry’s plan to implement robust ship-from-store capabilities in 450 stores.
The plan also includes new programs like Shipt Driven that was launched in September 2020 to boost Best Buy’s pickup and delivery capabilities. [1]
Best Buy’s innovative fulfillment strategy boosted its domestic online sales by 242% to nearly $5 billion, growing to 53% of the domestic sales mix from 16% in 2019.
In fiscal Q2 ended August 2020, its total quarterly revenue grew 4% y-o-y to $9.9 billion and its operating expenses for the quarter declined by about $200 million year-over-year.
Best Buy is perfectly positioned to benefit from Apple’s launch of 5G iPhones in 2021 and the release of next-generation gaming consoles by Microsoft and Sony.
The company is ready to grab more market share from top competitors like Amazon and Walmart in 2021 and beyond. [2]
Here is the full list and in-depth analysis of Best Buy’s competitors and alternatives:
1. Walmart
Year founded: 1962
Headquarter: Bentonville, Arkansas
Walmart is the largest retailer chain in the world and was ranked 19th biggest public company in Forbes’ Global 2000 list. Its 2020 annual revenue was $524.4 billion, employs over 2 million people, and operates more than 11,500 stores in 27 countries.
Both Walmart and Best Buy offer a wide range of consumer electronics and home appliances. Best Buy is specialized in consumer electronics than Walmart. But Walmart’s strong market presence gives it an edge.
Walmart is Best Buy’s top competitor in 2021. [3]
2. Amazon
Year founded: 1994
Headquarter: Seattle, Washington
Amazon is a global eCommerce powerhouse. It offers a wide variety of consumer electronics that match Best Buy’s inventory. Amazon’s annualized revenue growth from 2015 to 2019 is 27%, which is way higher than Best Buy’s growth rate of 2.5% in the same period.
The main advantage for Amazon is its eCommerce and fast-moving delivery network. In 2020, Best Buy’s robust ship-from-store capabilities enticed 41% of online shoppers to use new fulfillment services like curbside and increased its digital sales by 242%.
Best Buy’s innovative fulfillment strategy has increased its competitive advantage. But, Amazon still has a huge lead. [4]
3. Target
Year founded: 1902
Headquarter: Minneapolis, Minnesota
Target is the third largest discount retailer in the world based on revenue and had $78 billion in revenues in 2020. The retailer offers apparel, consumer electronics, and other products through its 1,868 stores across North America.
In the third quarter of 2020, Target’s revenue increase by 21% year-over-year driven by strong digital sales. Target’s digital sales surged by 155%, which is still lower than Best Buy’s 242% increase. Its digital-driven services increased by 200%, compared to 41% for Best Buy.
Target grabbed $6 billion worth of market share from competitors in 2020. It is a worthy top three competitor for Best Buy. [5]
4. Alibaba
Year founded: 1999
Headquarter: Zhejiang, China
Alibaba is a Chinese e-commerce giant and operates globally via Alibaba.com. The international business-to-business arm of Alibaba has seen tremendous expansion into over 200 countries.
In July 2019, Alibaba.com opened to American suppliers and now competes directly with Best Buy. In FY2020 ended March 31, Alibaba.com’s international commerce wholesale business delivered $1.4 billion in revenues, a 17% increase year-over-year.
The US is Alibaba.com’s fastest-growing market with more than 10 million businesses using the platform to buy and sell goods. Alibaba offers a variety of consumer electronics that match Best Buy’s inventory and threatens its market share.
In June 2020, Alibaba unveiled freight-shipping services for SMBs and virtual trade shows for manufacturers and wholesalers based in the US. These offerings will increase Alibaba.com’s competitive edge over Best Buy even further in 2021. [6]
5. Costco
Year founded: 1983
Headquarter: Issaquah, WA
Costco is a members-only wholesale retailer and offers a variety of products through its 803 warehouses and eCommerce platforms. In 2020, Costco’s annual revenue was $163.22 billion, up 9.3% from $149.35 billion in 2019.
Its membership cardholders also increased to 107.1 million in 2020 from 86.7 million in 2016. Nearly 90% of Costco’s members renew their memberships each year. Like Best Buy, Costco also has a robust omnichannel strategy that integrates warehouses and eCommerce. [7].
6. Staples
Year founded: 1986
Headquarter: Framingham, Massachusetts, U.S.
Staples is a renowned office retail company that offers stationery and office equipment like coffee makers, computers, and printers. The company operates 1,079 stores and 40 fulfillment centers and warehouses in the US.
Staples also offers some of its products through B2B-oriented delivery operations. In 2020, its annual revenue dropped by nearly 30% to $9 billion due to a drastic decline in demand for office supplies. Staples was taken private four years ago by Sycamore in a $7 Billion deal.
In January 2021, Staples made an offer to buy Office Depot for $2.1 billion. If the deal goes through, it will boost Staples’ competitive advantage over Best Buy. [8]
7. Office Depot
Year founded: 1986
Headquarter: Boca Raton, Florida
Office Depot is a leading provider of office supplies and technology solutions. Its wide selection of home-office tech includes printers, PCs, external hard drives, keyboards, and many more.
Office Depot’s integrated omnichannel platform consists of 1,400 stores, eCommerce, and dedicated sales professionals and technicians. In 2013, Office Depot acquired OfficeMax and increased its annual revenue to approximately $11 billion.
In Jan 2021, Staples offered to buy Office Depot for $2.1bn. Merging America’s two largest brick-and-mortar stationery retailers will create a stronger rival for Best Buy. [9]
8. eBay
Year founded: 1995
Headquarter: California
While eBay is well known as an auction site for second-hand clothes and collectibles, it also offers everything from lightly-used gadgets and tools to brand new electronics like Smart TVs. Many eBay sellers just use the platform to sell their products just like Amazon.
Consumers who can’t pay absurd price tags for gadgets like a new iPhone 11 can get refurbished iPhones at a fraction of the price on eBay. The ever-growing number of eBay visitors has forced big brands to open their own eBay stores, including Best Buy. If you can’t beat them, join them. [10]
9. Home Depot
Year founded: 1978
Headquarter: Atlanta, Georgia
Home Depot is a specialist in home improvement and operates about 2,269 stores mostly in North America. The retailer’s valuation is around $28.798 billion and has been growing steadily in the past few years.
Like Best Buy, Home Depot also converted some of its stores into fulfillment hubs in 2020 to fulfill the surge in online orders. It launched the One Home Depot strategy in 2020, which is more effective and integrated than Best Buy’s fulfillment plan.
But, most customers only visit Home Depot to purchase construction materials and get their electronics and appliances from Best Buy. [11]
10. Apple Store
Year founded: 1977
Headquarter: Cupertino, California
Apple is a tech company is renowned globally for manufacturing consumer electronics like the iPhone, Mac computers, iPads, wearables, and smart home devices. The company established the Apple Store to sell all its tech products and offer repairs and other services directly to the consumer.
Apple Store is a retail space that contributes about half of Apple’s revenues. In 2019, Apple was ranked the fourth largest consumer electronics retailer behind Walmart, Amazon, and Best Buy.
But it depends heavily on in-store visits, which exposed the company to the effects of the crisis. There are 271 Apple stores in the US, and more than 90 remained in the first half of 2020. [12]
11. Newegg
Year founded: 2002
Headquarter: California, U.S.
Newegg is a specialty electronics store. It is making an aggressive pitch to replace Amazon as the one-stop-shop for tech gear for employees working from home. Newegg is a storefront for many sellers and offers a broader variety of consumer electronics just like Amazon.
The online retailer is gaining customers quickly and growing its market share at the expense of traditional retailers like Best Buy. [13]
Kohl’s, Rocky Hill, CT
12. Kohl’s Corp
Year founded: 1962
Headquarter: Menomonee Falls, Wisconsin
Kohl’s is the largest department store retail chain in the US, with 1,158 stores. It offers consumer electronics, home appliances, and other products. The company is renowned for offering great deals and discounts during its Cyber Monday and Black Friday.
On November 26, 2020, Kohl’s launched a round of “Super Deals” with big savings on smart speakers, headphones, and more. Holiday shoppers also flock to Kohl’s to access its hyper markdowns, which include top-rated tech items like Google Nest Mini smart speaker. These promotional events boost Kohl’s advantage over Best Buy. [14]
13. Sam’s Club
Year founded: 1983
Headquarter: Arkansas, US
Sam’s Club is a membership-only retailer owned by Walmart and their inventory is quite similar. Even though Sam’s Club is renowned for discounted foodstuffs, the retailer also offers TVs and other home appliances in all its stores.
Sam’s Club offers a 90-day return policy on electronics, while Best Buy’s policy only offers 15 days. But Sam’s Club’s tech support line does not match Best Buy’s Geek Squad support services. Walmart-backing also gives Sam’s Club an advantage over Best Buy. [15]
14. BJ’s Wholesale Club
Year founded: 1984
Headquarter: Westborough, Massachusetts
BJ’s Wholesale Club is a members-only discount retailer just like Sam’s Club. It operates over 200 self-service warehouses in the US and charges a $55 membership fee per year. Its membership program added over 500,000 new members between January and September 2020.
BJ’s offers about 7,200 products, which include consumer electronics and home appliances. The retailer’s main competitive advantage over Best Buy is its 90-day return policy. BJ’s also offers a lifetime tech support line. [16]
15. Lowe’s
Year founded: 1946
Headquarter: Mooresville, N.C.
Lowe’s is a FORTUNE 50 home improvement company that approximately 18 million customers a week in the US and Canada. It employs approximately 300,000 associates and has more than 2,200 home improvement and hardware stores.
In 2020, Lowe’s recognized LG Electronics with the Sustainability Award for providing a wide selection of environmentally friendly appliances. The company only offers ENERGY STAR certified products, which can poach eco-conscious customers from Best Buy. [17]
16. B&H Photo
Year founded: 1973
Headquarter: Manhattan, New York City
Simply known as B&H, this 48-year-old icon has only one store but is the largest source of the video, photography, and audio equipment in the US. The private company also offers computers, drones, home entertainment systems, and other consumer electronics via its website and the B&H Photo SuperStore in New York. B&H’s competitive edge over Best Buy is its excellent customer service and fast shipping. [18]
17. Fry’s Electronics
Year founded: 1985
Headquarter: San Jose, California
Fry’s Electronics is a consumer electronics retailer that operates mainly in America’s southwest. It offers a wider selection of TVs on display than Best Buy. But the company was hit hard in 2020 and closed several stores. Fry’s Electronics now has only 30 stores in the US, with 14 of them are in California. [19]
18. Micro Center
Year founded: 1979
Headquarter: Hilliard, Ohio
Micro Center is an American electronics retailer that operates 25 stores across 16 US states. The company witnessed a surge in demand for laptops, desktops, and another office tech as millions of Americans converted their homes into makeshift classrooms and home offices.
Because of the demand, Micro Center limited the number of computer monitors to five per customer. Revenue from its affordable smartphones and tablets also surged in 2020. [20]
19. Gamestop
Year founded: 1984
Headquarter: Grapevine, Texas
Gamestop is a videogame retail chain that operates in the US, Canada, Europe, Australia, and New Zealand. A portion of Best Buy’s revenue comes from gaming consoles, which makes GameStop one of its competitors. GameStop has struggled to adapt to changes in consumer habits and was set to close 450 shops in 2021.
In January 2021, gamers and geeks on Reddit joined forces and invested heavily to save Gamestop from collapse at the expense of big hedge funds. When it comes to videogames, Gamestop still has a loyal customer base and is not going anywhere anytime soon. [21]
20. Kmart
Year founded: 1899
Headquarter: Hoffman Estates, Illinois
Kmart is a discount retail store that operates in the US. The retailer has struggled to stay afloat in the past few years and closed over 2,000 stores. But Kmart still operates about 34 stores across major cities in the US.
The retailer offers consumer electronics at an affordable price, which can entice some customers from Best Buy. [22]
References & more information
- Walton, C. (2020, Dec 15). How Best Buy Used Its Retail Smarts To Stand Out In 2020. Forbes
- Ali, F. (2020, Aug 27). Best Buy’s web sales grow 242% in Q2 to a record of nearly $5 billion. Digital Commerce 360
- Debter, L. (2020, May 13). The World’s Largest Retailers 2020: Walmart, Amazon Increase Their Lead Ahead Of The Pack. Forbes
- Great Speculations (2020, Sep 14). Can Best Buy Survive The Amazon Threat? Forbes
- Bertoni, S. (2020, Nov 18). Target Sales Just Shocked Wall Street—Here’s How CEO Brian Cornell Did It. Forbes
- Aspan, M. (2020, June 2). Alibaba adds new services to court more U.S. small businesses. Fortune
- Stankiewicz, K. (2020, Dec 14). Costco CEO says the company is doubling down on brick-and-mortar, even as it invests in e-commerce. CNBC
- Valinsky, J. (2021, Jan 11). Staples offers to buy Office Depot for $2.1 billion. CNN Business
- Fontanella-Khan, J. (2021, Jan 11). Staples bids for Office Depot four years after earlier attempt blocked. Financial Times
- Gordon, W. (2020, July 23). Shopping on eBay has evolved. Here’s what to know. NBC News
- Dignan, L. (2020, Aug 21). Walmart, Target, Home Depot, and Lowe’s: How their digital strategies paid off. ZD Net
- PYNMTS (2020, July 14). Apple Stores Unlikely To Reopen Before 2021. PYMNTS
- Hachman, M. (2020, April 3). The best alternatives to Amazon for buying tech right now. PCWorld
- Murphy, R. (2020, Nov 30). Cyber Monday 2020: The best Kohl’s deals right now on kitchen gear, electronics, and more. USA Today
- Morrison, G. (2020, Jan. 28). Walmart vs. Best Buy vs. Target vs. Costco: What’s the best store for buying a TV? CNET
- Editorial Team (2020, Sep 21). BJ’S Wholesale Club Beats Amazon and Costco. SoFi
- Lowe’s Inc. (2020, Oct 12). Lowe’s Announces 2020 Vendor Partners of the Year. PR News
- B&H Photo (2020, July 01). B&H Photo Announces Reopening of NYC SuperStore. BUSINESS WIRE
- Severson, W. (2020, Nov 12). Fry’s Electronics shuts down yet another longtime location, in Campbell. Hood Line
- Silverman, D. (2020, March 21). At Micro Center, coronavirus precautions keep customers waiting in line. Houston Chronicles
- Malik, K. (2020, Jan 31). An uprising against Wall Street? Hardly. The Guardian
- Lisicky, M. (2020, Sep 5). Kmart, Battered By Constant Closures, Beats The Odds And Heads Into Another Holiday Season. Forbes
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