Retail giant Best Buy (NYSE: BBY) turned heads in August 2018 when it purchased GreatCall — a company that develops and sells smartphones, medical alert devices and other technology products designed to support older adults’ ability to age in place — for $800 million.
At the time, the major investment was billed as a way for Best Buy to augment its existing efforts in the health care space, while doubling down on its initiatives focused on the country’s aging population, including its “Assured Living” program.
That major investment is now starting to pay off for Best Buy.
“In health, we acquired a leading connected health services provider for aging consumers GreatCall and took a tangible step forward in our strategy to have seniors live longer in their homes with the help of technology,” Best Buy CEO Hubert Joly said Wednesday, recapping Q4 and full-year 2018 earnings on a call with investors and analysts. “Since we acquired the company in October, the integration has been seamless and the value creation opportunities we envision have begun to materialize.”
The Q4 earnings for Minneapolis-based Best Buy exceeded the expectations of Wall Street analysts, thanks to strong sales, particularly over the holidays.
The company has reported at least 3% sales growth every quarter for almost two years, CNN Business noted in a report published Wednesday.
GreatCall contributed to Best Buy’s financial success. For its domestic U.S. stores, revenue was down, largely due to location closures — but these declines were partially offset by 3% comparable sales gains and revenue from GreatCall, Joly noted.
Going forward, Best Buy intends to drive growth in its health business by expanding GreatCall’s devices and services.
“As children of aging parents, many of us would appreciate the potential power of our health monitoring service that enables seniors to live longer in their homes, while reducing related health care costs,” Joly said. “We’re currently in pilots with a number of managed care organizations. And over time, we believe this could become a material growth opportunity for us.”
In October, GreatCall announced it had signed a five-year deal with a Massachusetts health insurer to provide in-home, passive monitoring devices to its high-risk members.
In January, the company followed that announcement by revealing it had struck another partnership deal with insurer CNA, one of the largest U.S. commercial property and casualty insurance companies.
“We are constantly looking for ways to enrich lives through technology and help address the aging population who wish to age in place,” Bryan Fuhr, vice president of connected health for GreatCall, said following the announcement. “While the number of older adults continues to escalate, the growth of professional caregivers remains stagnant, putting a strain on these caregivers and the aging population as a whole.”
The GreatCall deal fits into Best Buy’s larger strategy.
The company wants to not only sell technology products but be a provider of consumer services and supports, including in a “consultative” role, Joly said Wednesday.
Such an approach could have an impact in the home-based care space if it means that a company with the size and scale of Best Buy is providing support for monitoring technology on the GreatCall platform.