Best Buy Finally Does Something Right — with Samsung

Print Email

Best Buy Co. Inc. (NYSE: BBY) has found a smart way to use space at its deeply troubled retail outlets, which have been emptied of consumers, in large part, because these consumers can get electronics online. The company has arranged to lease floor space to Samsung so that the South Korean company can promote and sell its products, which will soon include its new Galaxy 4S smartphone. Analysts expect this new Galaxy to be a huge hit that will drive traffic to everywhere it is sold.

Best Buy finally has done something right. was the first to report the news that it:

… has been told that the first wave of high traffic Best Buy locations will soon be receiving instruction to remove two aisles next to their mobile department and prepare to install a new Samsung store. This new section will be dressed in large Samsung signage and offer custom demo stations for many of Samsung’s products. Locations with the new section will be issuing special training sessions for employees in the mobile department, focusing heavily on how to show off Samsung-specific features.

The concept is not a new one for troubled retailers. J.C. Penney Co. Inc. (NYSE: JCP) has added new mini-stores to its locations. J.C. Penney will set aside space for Michael Graves collections and places for Jonathan Adler, Bodum and Martha Stewart, if a suit brought by Macy’s Inc. (NYSE: M) about whether Stewart can sell products in J.C. Penney can be settled. Operations like J.C. Penney and Best Buy have not been successful on their own. Perhaps if they let companies with their own brands take up floor space, those companies can use popular products to bring in customers who otherwise stay away.

The Best Buy deal with Samsung is particularly attractive to Best Buy. Samsung has increased marketing of its products so that its expenditures for this even have topped Apple Inc.’s (NASDAQ: AAPL). Samsung is one of the world’s largest corporations, and it can afford ad spending at levels almost no other company can. The value and attractiveness of its brand and products are bound to give Best Buy traffic a lift. And some customers will leave Best Buy stores with more than a Samsung product, as they walk through aisle after aisle to hold, and perhaps buy, a Galaxy S4.

Best Buy just added a small, but important piece to its turnaround plans.

RSS Facebook Twitter