Best Buy has been America’s top choice for consumer electronics for decades. From television sets to cameras to microwaves, the store has supplied the average household with more tech items than you can count. With so many products covering a range of categories, it only makes sense that the retailer would incorporate healthcare into their new five-year strategy.
And that’s exactly what Best Buy plans to do. According to Best Buy’s new growth strategy for the next few years, the tech store plans on incorporating health monitoring services geared toward seniors. In the next five years, the company hopes to offer sensors, neck pendants, and other senior health devices to help more than five million seniors lead independent lives.
“This is an environment driven by constant innovation and people who need help with technology,” explained CFO Corie Barry after unveiling the five-year growth plan.
Senior healthcare initiatives are becoming increasingly necessary as the population surges. An unprecedented number of people are living into their senior years. Combined with better health practices and healthier living, it isn’t surprising to see people live well into their 80s. This isn’t surprising given that demand for meat-free alternatives rose a shocking 987% in 2017 alone. Dairy-free alternatives and vegan options are also growing into a booming industry, one that will keep countless people healthy for a long time. However, many are uncomfortable with the thought of leaving their homes for specialized care.
Unfortunately, the healthcare industry is struggling to play catch-up as a result. In fact, it’s estimated that two in every three seniors are struggling with a chronic condition but many don’t want to enter senior care facilities if they don’t have to. Instead of fearing for their safety when they live at home, these health monitoring systems can alert authorities when an accident occurs. That way, they can gain help in an emergency without sacrificing the comfort of living at home.
This might seem like a leap for your local electronics dealer, but Best Buy has been interested in healthcare for a while. Since 2018, the retailer has included “health” in their earnings calls 44 times. In the same amount of time, Best Buy has also acquired three healthcare services, spending about 6% of its market cap on these deals.
This is a big shift from the company. After all, Best Buy is known for avoiding acquisitions in an effort to grow its business. But since Best Buy has acquired GreatCall, Critical Signal Technologies (CST), and BioSensics, this apparent hesitance is off the table.
So, what do these new acquisitions do?
GreatCall is known as the provider behind Jitterbug. While you might not have heard that name for a while, the senior phone service once had commercials running non-stop back in the mid-naughts. GreatCall will offer Best Buy mobile phones and emergency concierge services now that it has been bought for $800 million, the largest deal Best Buy has struck to date.
CST is a health services company that focuses primarily on senior clientele. It’s best known for its patient monitoring systems, the likes of which Best Buy will assuredly use in the coming years.
Best Buy reportedly acquired BioSensics because of its innovative team and predictive healthcare abilities. According to Best Buy CFO Corie Barry, Biosensics will be vital in developing wearable sensor technology that can detect falls and other accidents in the home. Since insurers are willing to pay top dollar for technologies like these, this could be a pregnant opportunity for the tech giant. In fact, Morgan Stanley estimates that Best Buy has the potential to reach a revenue of up to $46 billion in the healthcare industry alone.
“In the past, we may have simply looked at the core retail technology products aimed at seniors and quantify that as the addressable market,” Barry explains, referring to cell phones tablets. “If we expanded that definition to include the services more geared around health and safety, think urgent response, fault detection, concierge help, these are services seniors need and want to stay in their homes, that addressable market more than doubles.”
On top of that, Best Buy has also hired medical professionals to oversee its new medical health business. AP notes that physician Daniel Grossman will serve as Best Buy’s chief medical officer to help develop strategies regarding the new technology. Grossman will also report to Best Buy’s head of health, Asheesh Saksena.
Digital Commerce 360 notes that there will be an estimated 54 million senior citizens by the time we reach 2023, many of whom want to stay at home for as long as possible. With large companies investing in helpful technologies like these, that dream might become a reality.
So far, Best Buy supplies health monitoring pendants to about one million people. As the Minnesota-based technology store continues to grow, however, the goal of reaching more than five million people is just over the horizon.
