Katie thomas lead Carney, Consumer lead at the Karni
Consumer Institute, Katie want to get your read on
best buy, best buy. You know, I'm
curious how do you think it's best position to weather
the storms when it comes to slowing down on the
consumer electronics and again slowing down. Especially when you
look at comparables of last year and the year before
last, when we were pivoting fully into this hybrid
or fully remote work model. Absolutely. Alicia Well
, I think that's what drives a lot of what
you're seeing is that they're laughing some pretty tough gains
from last year as we're all still stocking up on
that technology that we needed at home. We saw
in the most recent retail numbers that electronics were already
down best buy flag that when they modified their forecast
for the remainder of the year. So I would
say these numbers aren't that unexpected. We've been seeing
it really across these highly discretionary categories where consumers really
leaned in during the pandemic. So outside of electronics
, we've seen it in subscription services, whether it's
streaming or boxes, we've seen it in at home
fitness. It's really consumers thinking about where they spent
a lot of money during the pandemic and how they're
shifting that either just, you know, paying more
for food and gas or to do things that are
more experiential that they were doing during the pandemic.
When you look at categories for best buying opportunities?
I'm curious do you expect best buy to kind of
lean more into the internet of things or smart home
category as it continues to try and you know,
show growth moving forward. Absolutely. I think they'll
continue to diversify and really figure out what consumers are
looking for from that broader home electronics and entertainment segment
. So there's a lot of opportunity to consider what
that looks like for them. As you just mentioned
, I think we'll, we'll see them start to
do some of that is during the holiday season.
So we are in a bit of a lull where
you may need elect you simply are looking for electronics
. Whereas that's a category that starts to do really
well as you approach the holiday season. So come
even october this year. I think they'll start with
the core focusing in on some of those traditional big
ticket items such as tv speakers, items like that
and that will allow them to continue to experiment and
see what else is working in other categories. You
know, inflation more broadly in the broader retail earnings
picture has been obviously a key, you know,
buzzword and a lot of retailers signaling their customers are
feeling the pressure when it comes to inflation best buy
even, you know, doing that in its latest
earnings report, best buy is quarterly results. The
sharp change in the consumer habits at that point.
Do you think this is a market correction as we
kind of distance ourselves from pandemic related spending habits or
do you think this is strictly inflationary and as that
eases up potentially there is a kind of, you
know runway for for a name like best buy.
I would say this is a bit more of a
market correction. So again, you know, a
couple of months ago we were talking a lot about
how despite consumer sentiment numbers being low despite raising prices
, consumers weren't pulling back and spending yet. We've
seen that sort of hit its tipping point in the
last month or two and across income segments as well
. Again, initially in the beginning you saw lower
income folks pull back pretty quickly whereas higher income was
still spending where then even walmart in their most recent
earnings said, hey, we have higher income folks
that are coming into the store more as well trying
to get the best bang for their buck on the
everyday items. So I think it really is.
Um, you know, coming out of the pandemic
, consumers work spending as freely as they wanted to
despite inflation and now you're seeing that stabilize a bit
, I wouldn't say it's a major red flag as
we think about consumer segments and categories overall. Do
you think we see any long term consumer behaviors more
broadly in the electronic space? Well, I think
we'll continue to evaluate what works in terms of these
hybrid working environments and you know, for the most
part we've seen Children go back to school. So
that's one element of it. But I don't think
we'll be so pronounced. But I think a lot
of us thought more people would be back in the
office by now and you continue to get pushed back
from consumers and not wanting to go back full time
. So that's really if I were best buy,
that's what I'd be thinking about or what are some
of those areas where we can still continue to drive
sales and revenue by helping people make that sort of
hybrid environment work better with that in mind then you
know the reality that things have shifted so dramatically,
you know, since the pandemic and there's more of
this hybrid work environment that employers are becoming more and
more okay with and that employees certainly, you know
want more and more of what does this change in
behavior and habits say for the broader retail tech space
at large in terms of the long term future here
, there's still a lot of opportunity to figure out
how we can make these experiences better and more frictionless
. I think we were forced to adapt so quickly
but also showed the power of consumer behavior change.
So I don't know about you all but I had
never really been on video chats regularly prior to the
pandemic and we realized that it's actually a great modified
option and we figured out how to make it work
. I think we'll continue to see companies experiment that's
even where some of the new technologies such as the
metaverse could come into play, There's a lot of
great things they're experimenting with in terms of corporate training
or holding meetings that feel more of that augmented reality
hybrid option, so that some of the more long
term elements. But I think we'll see companies really
continue to investigate Katie really appreciate your time and your
insight, Katie thomas lead at the Karni Consumer Institute --> .