Best Buy (BBY) is taking its best shot at stealing some online market share from Amazon.com (AMZN) with a completely new service meant to challenge the world's largest e-commerce company. Best Buy Marketplace will substantially increase the number of products available at the Best Buy website.
In a statement, the company noted:
"Best Buy Marketplace is a key development to our multi-channel platform," stated Brian J. Dunn, chief executive officer of Best Buy. "As we continue to grow our online business, Best Buy Marketplace is an element that enables consumers to shop how they want and encourages additional reasons to visit and purchase at BestBuy.com."
Like Amazon.com, the new store will allow third parties, vetted by Best Buy, to sell their products alongside the retailer's.
Wall Street has lost its patience with Best Buy's plans to overhaul itself. In the last reported quarter, which ended May 28, the firm posted a sales increase of only 1% to $10.9 billion. EPS fell by 3% to 35¢. Online revenue rose only 10% in the U.S., not nearly enough to keep up with Amazon, which is still growing at over 50% per quarter.
Best Buy has problems similar to those of Barnes & Noble (BKS). It must maintain its huge bricks-and-mortar operation while simultaneously trying to flank Amazon online. But it doesn't have anywhere close to the variety of products Amazon does, nor anything close to its audience. Amazon.com was the sixth most visited website in the U.S. in July, according to comScore, with 97.1 million unique U.S. based visitors. Retailers Walmart (WMT) and Target (TGT) were among the 50 most visited sites. Best Buy didn't make the list.
Best Buy's shares plunged last December when the company issued a lukewarm forecast, and they haven't recovered since. After reaching a 52-week high of $45.33 nearly a year ago, they now trade below $25.