Mobile is Best Buy's new calling

MINNEAPOLIS -- Best Buy said that it plans to open hundreds of wireless device stores, as well as expand online and in China in an effort to be more competitive as consumers up their online shopping. The chain is also scaling back the size of its signature namesake format.

In an analyst conference Thursday, the retailer unveiled plans to shrink square footage at big-box stores by 10% over the next three to five years, a move that Best Buy said will eventually save $70 million to $80 million annually.

The company said it expects to have 600 to 800 Best Buy Mobile freestanding stores in the United States within five years, with some 200 expected to be operating by July. The mobile stores, whose average footprint is less than 2,000 sq. ft., have proven more profitable than traditional Best Buy stores because of the popularity of smartphones and sales of add-ons like phone plans and accessories.

Best Buy said it also plans to expand its online-only selection and aims to double its $2 billion in online revenue in three to five years.

However, "Physical retailing still matters," Brian Dunn, CEO, said. "It is an important part of our strategy, because service matters."