Best Buy signs new store-within-a-store deals with Samsung, Sony

Best Buy will remodel the TV sections in most of its stores nationwide to add dedicated areas for Samsung and Sony.

May 2, 2014 at 3:37PM
With its recent partnerships with Samsung and Microsoft, Best Buy has been one of the most aggressive proponent of the store within a store concept. Best Buy employee Phillip Stewart chatted with customer Karen Karpenko in the Samsung store in Best Buy in Richfield, Minn. on Wednesday, July 10, 2013. ] (RENEE JONES SCHNEIDER * reneejones@startribune.com)
Best Buy employee Phillip Stewart chatted with customer Karen Karpenko in the Samsung cellphone store within Best Buy’s Richfield store. New Samsung TV mini-stores are now also planned. (The Minnesota Star Tribune)

Best Buy Co. Inc. said Thursday that it plans a massive expansion of its "store-within-a-store" concept, with Sony opening stores in 350 Best Buy locations and Samsung adding 500 new stores to its presence within Best Buy.

The Richfield-based retailer has been aggressively trying to remake the way it sells products, carving out space for individual brands in its big boxes in efforts to once again become a go-to destination for consumer electronics. By June, Sony, Samsung, Microsoft, Pacific Kitchen and Magnolia will each occupy its own domain within Best Buy.

"I think Best Buy is brilliant in following this strategy, and coexisting on the same distribution platform with other strong brands," said Robin Lewis, CEO of the Robin Report, a newsletter that tracks retail companies. "That big box becomes kind of an enclosed mini-mall."

Samsung already sells phones, tablets, and other small tech gear at its Samsung Experience shops within all 1,000 Best Buy locations across the country. The 500 new dedicated Samsung areas will be separate and showcase the South Korean electronics giant's ­latest televisions, including its line of curved ultra-high-definition TVs. The company is the world's top maker of both TVs and cellphones by units.

Sony's 350 new locations within Best Buy, which it is calling the "Sony Experience at Best Buy," also will highlight home entertainment products, as well as audio equipment and PlayStations. The Japanese electronics company is the world's fourth-largest seller of TVs after Samsung, LG Electronics and TCL.

The emphasis on big-screen televisions is a calculated move, according to Stephen Baker, an analyst for the NPD Group.

"With its new model, Best Buy is looking to redefine the mainstream in-store home theater experience, making it logical and convenient to buy all your home theater products," Baker wrote. "By focusing on the fastest-growing and highest-visibility segment of the TV market, Best Buy, and its core vendor partners, Sony and Samsung, are looking to re-establish the TV section, and the home theater area in general, as a go-to place in the store to draw consumers in."

The new stores will start opening within Best Buy locations this month and should all be launched by June. A Best Buy in Rochester is one of the first that has been remodeled.

"There will be some stores that have Samsung only, there will be some stores that have Sony only, there will be some stores that have both," said Best Buy spokesman Jeff Shelman, who declined to discuss the financial terms of its deals with Samsung and Sony.

Research suggests that stores-within-a-store do more than just occupy space. A study by marketing professors at the University of Pennsylvania and Carnegie Mellon ­University found that the concept can boost sales of high-value products that require a degree of service that can't easily be found elsewhere in the store.

"Europe's been doing this a long time — it's called concession retailing," Lewis said. "This is one aspect of the future of retailing, where strong brands will collaborate with each other."

Despite a disappointing ­holiday season, Best Buy has stabilized sales and increased its fourth-quarter online revenue by 25 percent. The firm will report its fiscal first-quarter results on May 22.

The company's stock price was up 9 cents to $26.02 Thursday.

Adam Belz • 612-673-4405 Twitter: @adambelz


Best Buy - Rochester, MN - store within store
The Best Buy store in Rochester has been remodeled to showcase its strategy of stores within stores. (The Minnesota Star Tribune)
With its recent partnerships with Samsung and Microsoft, Best Buy has been one of the most aggressive proponent of the store within a store concept. The Windows store in Best Buy in Richfield, Minn. on Wednesday, July 10, 2013. ] (RENEE JONES SCHNEIDER * reneejones@startribune.com)
With its recent partnerships with Samsung and Microsoft, Best Buy has been one of the most aggressive proponent of the store within a store concept. The Windows store in Best Buy in Richfield, Minn. on Wednesday, July 10, 2013. ] (RENEE JONES SCHNEIDER * reneejones@startribune.com) (The Minnesota Star Tribune)
This undated photo provided by Microsoft, shows windows store at Best Buy. Best Buy announced Thursday, June 13, 2013, it is partnering with Microsoft to feature a store-within-a-store for its Windows products, the latest major consumer electronics retailer to acknowledge advantages of the brick-and-mortar format (AP Photo/Microsoft Corp) ORG XMIT: MIN2013061315154444
Microsoft is another partner with store-within-a-store space at Best Buy’s big-box locations. (The Minnesota Star Tribune)
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about the writer

Adam Belz

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Adam Belz was the agriculture reporter for the Star Tribune.

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