Best Buy Is Expanding Into Healthcare Technology, Faces Slowing Electronics Sales
For many years, Best Buy has been known as a big-box retailer of consumer technology such as computers, televisions, and printers. Over the years, Best Buy has evolved as consumer needs have changed. Who owns Best Buy today, and how is it growing into the healthcare technology space?
The consumer electronics retailer actually started in the 1960s with a focus on music and was called Sound of Music. During the 1980s, it was rebranded as Best Buy and became more like the company it is today. Now, as Best Buy continues its electronics business, it's also branching out into a number of healthcare technology segments.
Who started Best Buy?
The company began in 1966, when founders Richard Schulze and James Wheeler opened Sound of Music in St. Paul, Minn. The company made about $1 million in revenue in its first year, and in 1969, Schulze bought out his partner.
By 1983, when the company had seven locations and $10 million in annual sales, Sound of Music became Best Buy Company, Inc.
Soon after rebranding, Best Buy opened its first superstore, and a few years later, it debuted on the New York Stock Exchange. Schulze was Best Buy's chief executive officer from 1983 until 2002. Then he served as chairman until 2012.
Who is the CEO of Best Buy today?
Corie Barry is Best Buy's current CEO. She held a number of key positions at the company before becoming its chief executive in 2019. Barry's net worth is in the multiple tens of millions of dollars. (She was estimated to be worth $38 million in 2021, and Wallmine estimated her worth at $47.8 million in 2022.)
How is Best Buy branching into healthcare technology?
This week, CNBC reported that Best Buy has made a three-year agreement with Atrium Health to facilitate a hospital-at-home program. Atrium Health is a part of Advocate Health, a large healthcare nonprofit in the U.S. The partnership with Atrium will make use of Best Buy's Geek Squad.
Here's how the new healthcare segment for Best Buy will work. Geek Squad members will set up technology in people's homes that can monitor their heart rate, blood oxygen level, and other vital signs. They'll also provide training to customers at home on how to use and manage the devices. All of the data will be shared with Current Health's doctors and nurses via a telemedicine hub.
Best Buy has also acquired several other healthcare companies over the past five years:
- GreatCall makes simple cell phones and devices and provides emergency response services for the elderly.
- Critical Signal Technologies is another senior-focused company.
- Current Health is a U.K.-based telehealth firm.
What do Best Buy's health initiatives mean for company revenue?
As CNBC noted, the new partnership with Atrium "represents the latest push to turn health care into a more meaningful revenue driver." As the sales of consumer electronics that Best Buy is known for decline, the company hopes that the healthcare businesses will prop up its revenue.
Why have electronics sales declined? This trend may be partially due to inflation on everyday expenses like groceries and housing (which has reduced consumer spending on electronics). The trend could partially be due to consumers upgrading their electronics early in the COVID-19 pandemic.
During a recent earnings call, Barry said that in this fiscal year, Best Buy anticipates its health division sales to grow at a faster pace than other parts of its business. However, Deborah di Sanzo, the Best Buy Health president, stated that the revenue from at-home care is still a small percentage of the company's total revenue.
"We want to create pathways that enable care at home in a more seamless manner," noted di Sanzo. "We want to tie technology and empathy together and really help change how health care is delivered to people in their homes.”