One of the big beneficiaries of the pandemic has been electronics retail stock Best Buy (BBY -1.41%), which became a go-to for home office needs. The company has seen revenue more than double in the last three years, and net income has jumped as well, climbing 70% in the first six months of fiscal 2022.
Growing spending from both enterprise customers and consumers has helped drive results. But long-term, it's not clear if this was a one-time benefit or a sustainable change in how people shop, so Best Buy wants to find more ways to draw customers to the store. It may have found that in electric mobility products.
Best Buy's new product lines
Best Buy recently announced that it is now selling Unagi, Bird, Segway-Ninebot, SUPER73, and SWFT electric mobility products. These range companies make scooters, e-bikes, and scooters, all with electric drivetrains.
These products will be sold online, but will also be available in 10 Best Buy stores across the country. If it goes well, we could see brick-and-mortar sales options grow. I think of this like a showroom product for Best Buy, because there aren't currently many places to test electric mobility products today.
This isn't the first time Best Buy has tried its hand at electric transportation sales. It sold Brammo electric bikes nearly a decade ago, but that didn't last long, and Best Buy never became a go-to location for electric motorcycles. But a lot has changed since then, and it may be time for manufacturers to lean on Best Buy's retail locations to grow their businesses.
E-bikes and scooters needed a showroom experience
E-commerce and brick and mortar retail are often in direct conflict with each other, but in the case of Best Buy, I think this could be the best of both worlds. Electric bikes, scooters, and mopeds are just expensive enough that customers will likely want to try before they buy, and building a retail presence would be extremely expensive.
For consumers, it's also very difficult to gauge the difference in riding experiences for different products. Bikes, for example, fit differently, so buying online could lead to less-than-optimal purchase decisions. Best Buy didn't lay out how it will allow customers to test these products, but if it can get a demo experience right it could be the go-to location for shopping for electric mobility.
The market opportunity is huge
According to Allied Market Research, the global e-bike market was valued at $40.3 billion in 2019, and was expected to grow to $118.7 billion by 2030. Grand View Research estimates that electric scooters were a $19.4 billion business in 2020 and would grow 7.6% between 2021 and 2018.
No matter how you slice it, electric mobility products could be a big addition for Best Buy. The company had $23.5 billion in sales in the first six months of the fiscal year, and given the huge opportunity in e-bikes, electric scooters, and other electric products this could be another growth business to add to the portfolio. At the very least, adding electric mobility is worth a shot given the potential benefit of being a preferred showroom for these products.