Best Buy is known as the largest U.S. specialty electronics retailer, but some day, it may be better identified with healthcare instead.
By Andria Cheng, Senior Contributor, Forbes.com
As Best Buy has said, health monitoring services for seniors and other digital health initiatives mark a key part of its growth strategy. The retailer over the next 10 to 20 years could generate anywhere between $11 billion and $46 billion in cumulative revenue from its commercial health business, according to Morgan Stanley analysts in a 64-page report released Monday. How significant is that? The high end of that range tops Best Buy’s roughly $43 billion in annual sales in 2018.
“This would be material,” the report said. “We don’t think the market fully grasps Best Buy’s commitment to health….The company has shifted its focus to tech-enabled senior care…. We believe Best Buy has a durable competitive advantage in senior care, its niche in the healthcare services market.”
Just how serious is Best Buy in healthcare? Company executives have referenced ‘health” 44 times on earnings calls since 2018, versus only two times before that, Morgan Stanley analysts calculated. In the past year, the electronics retailer also spent about $1 billion, or 6% of its market cap, buying three healthcare services, “surprisingly” for a company historically known for growing without acquisitions, according to the report.