Best Buy is betting on senior citizens to be a major engine of growth as it looks to hit the $50 billion sales milestone in 2025.
The retailer, known for years primarily as a place to buy consumer electronics like televisions, cameras and computers, has trained its eyes on the massive $3.5 trillion health care market as its next big source of revenue.
More specifically, with the U.S. population of people 65 and older set to double in the coming decades, and on the premise that most people, even those with chronic conditions, will want to continue to live in their own homes, Best Buy CEO Corie Barry sees enormous potential for the Richfield, Minnesota-based company to diversify its business.
“We’re looking at a population that is aging incredibly rapidly. It’s massive,” Barry told reporters this week ahead of Best Buy’s investor day. “People expect to age in their own homes.” And that, she argued, played to Best Buy’s strength given how many homes the retailer visits to install technology, from home theaters to smart home products.
Barry, a key architect of Best Buy’s stunning turnaround in recent years under her predecessor Hubert Joly, told Wall Street analysts she wants people to think of the company as “the chief technology officer for your home” for everything from troubleshooting a faulty home WiFi system to sending alerts if, say, a senior hasn’t opened the refrigerator in some time, and therefore eating sufficiently.
Grabbing a sizable share of the healthcare technology industry is a cornerstone of her roadmap to get Best Buy from about $43 billion in sales now to $50 billion in 2025, a plan she unveiled on Wednesday at the New York Stock Exchange in her first presentation to Wall Street since taking the reins in June.
A recent Morgan Stanley report supports Barry’s bullishness on the sector: the firm estimates health care products and services could add billions, perhaps even tens of billions of dollars, to Best Buy’s revenues over time.
In the last year, to support the health side of those ambitions, Best Buy has spent $1 billion on acquisitions, the bulk of that on GreatCall, a seller of emergency-response systems for the elderly that serves 1 million people and last year garnered $300 million in revenue.
Barry said Best Buy hopes to be providing health monitoring services to 5 million seniors within five years. It also recently acquired Critical Signal Technologies, which provides personal emergency response systems.
Best Buy Health president Asheesh Saksena, who had previously headed the company’s strategic growth office and started in his role in January, said that the company now has resources to better serve healthcare customers, including healthcare specific in-house expertise and predictive algorithms.
Still, getting to $50 billion will also require Best Buy to expand its traditional retail business centered on consumer electronics, an industry Barry defended in her remarks as “more stable” than people think.
Moves to bolster that include services such as its Total Tech Support program, where a membership costs $200 a year for unlimited tech support. Best Buy executives said the program has 2 million members now, up from 1 million in January. The service includes 600 salespeople who make house calls. Customers of the service spent 7% more at Best Buy, the company said.
Barry, who was ranked No. 18 on Fortune’s new Most Powerful Women in business list, expressed confidence that Best Buy has or is developing the tools to build on the growth in recent years that revived a retailer many thought was doomed only seven years ago.
“The strategy is the right one,” she told reporters. “We feel like we’re directionally headed in the right space.”