Newspaper article Evansville Courier & Press (2007-Current)

Best Buy Revamps Retail Model ; Eyes 'Store within Store'

Newspaper article Evansville Courier & Press (2007-Current)

Best Buy Revamps Retail Model ; Eyes 'Store within Store'

Article excerpt

The sign outside the store says Best Buy, but the inside of the building looks more like a mall than a single store. The usual Blue Shirts and Geek Squad agents scurry across the sales floor, but Samsung, Microsoft, Pacific Kitchen and Magnolia occupy their own domains within Best Buy. They have large product displays, dedicated checkout areas, and employees wearing shirts that are distinctively not blue.

Best Buy stores are becoming more complex these days as CEO Hubert Joly has aggressively pursued a "store-within-astore" concept more common among department stores and Asian retailers.

"Best Buy is really hustling to find its strategic way forward," said Robin Lewis, CEO of the Robin Report, a newsletter that tracks the retail industry.

The benefits are clear: Higher sales of popular brands plus the rent Samsung and others pay to Best Buy equals higher revenue for the consumer electronics retailer. It's a formula Best Buy appears willing to replicate with other manufacturers.

But in reality, the concept is untested. Does ceding space to Samsung and Microsoft drive additional traffic and sales throughout the entire store? Will a Samsung employee really give up a potential sale if a shopper can't decide between a Galaxy smartphone or an iPhone 5?

Best Buy, after all, has portrayed itself as the retailer whose highly trained Blue Shirts offer customers knowledgeable and unbiased advice on products that best suit their needs. On a larger level, Best Buy runs the risk of eclipsing the brand that matters the most: Best Buy.

"It's a fine line," said Brian Kelly, a Chicago-based retail consultant and a former top executive at Sears and Eddie Bauer. "They've got to make sure Best Buy is the brand of choice for customers. Going overboard with store-withina-store could diminish the power of the (Best Buy) brand."

One of Joly's top priorities as he restructures Best Buy is to boost sales by redesigning store space. Specifically, he wants stores to stock higher-growth products that could boost sales per square foot, the ultimate measure of a retailer's health.

That's where storewithin-a-store concepts come in handy. …

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