Best Buy is looking to cash in on Virtual Reality
Forrester report estimates that the demand for VR headsets will reach 52 million units by 2020. This new technology presents a huge opportunity for Best Buy as VR headset manufacturers launch their products in its stores. In May this year, Facebook’s virtual reality headset Oculus Rift was rolled out in 48 Best Buy stores across the U.S. where consumers could try the device and schedule demos. Best Buy is uniquely positioned to capture this opportunity where it has an advantage over e-commerce players such as Amazon. As consumers look to familiarize themselves with VR technology, first time buyers would prefer to try out the product and watch a demonstration before making a purchase. This could attract consumers to Best Buy’s offline stores positively impacting comp sales. While mobile phones and computing products dominate Best Buy’s revenues (nearly 50% in Q1 2016), high demand for VR devices can lead to a higher revenue from entertainment products (currently accounting for 6% of total revenues) and reduce the company’s dependence on smartphones to grow revenues in future.