Best Buy's Shiny, New Supply Chain Strategy for the Holiday Season

Tags: Distribution, E-commerce, Technology

Best Buy made its list and checked it twice, and it's ready to take on the holiday season with a new and improved supply chain.

Though summer is only just starting to wind down, Best Buy is wasting no time getting ready for the holiday season. The retailer has already revamped its supply chain and shipping strategy and taken steps to ensure a seamless peak period.

In lieu of hand-picking products for shipping, Best Buy has opted to invest in three technology-driven e-commerce facilities in Los Angeles, Chicago, and Piscataway, New Jersey. Within these e-commerce centers are dozens of robots sorting thousands of boxes worth of goods. 

The investment comes as part of Best Buy's attempt to revamp its supply chain strategy to compete with big-box retailers Walmart and Target and e-commerce giant Amazon. In 2014, the company took those first steps, shipping online orders from physical stores. The new e-commerce centers, meant to aid in this process, offer a unique advantage over the retailer's traditional distribution centers.

With closer proximity to customers and the ability to more easily deliver bulky appliances directly to shoppers (the profits of which account for 11% of Best Buy's domestic sales in its first quarter), the e-commerce facilities give the retailer a competitive advantage and step up in preparation for the holiday season. 

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