Best Buy and Electronics Retailers Set up Small Shops

The idea of divvying up stores into smaller, quasi-independent sections has been around for decades. In recent memory, JCPenney famously failed to impress consumers with this strategy. So what would make Best Buy think it's different this time around?

First, Best Buy is focusing on gadgets, and these gadgets have clear brands that consumers already recognize. Apple already has focused stores with its geniuses ready to help, and Best Buy is expanding this retail concept. Microsoft is the latest partner to this idea, with Samsung, Apple, and Google already subscribing to this store-within-a-store concept.

Next, these clear brand demarcations are also seen within customers. A person who already has an XBOX, for example, will likely be predisposed to liking Microsoft products, so that person will head toward the Microsoft section. The salespeople in the section have been trained specifically to sell Microsoft products and have a narrower but more detailed knowledge of the products.

This hopefully can combat showrooming, which is where consumers browse through products in a physical location before deciding to buy that product more cheaply online. The salespeople will be able to gently leverage a sale rather than letting perusing customers leave empty handed.

In addition, this means that products can be displayed more effectively. Many items have small differences, and traditional displays sometimes mean that these differences are not apparent. Specialist areas can highlight the gradual progression of technology so that employees can upsell more effectively to a device with a little more memory or perhaps to one that has a faster processor. At the moment, many people look for the best deal at their price points instead, rather than spending a little more to upgrade.

Generally, this tactic has been met with approval from investors--many of whom will likely be customers at Best Buy. It seems apparent that those leading the company have a solid understanding about what works and what will drive away loyal customers.  

One of the key differences between the deal with Samsung and the deal with Microsoft is that the Microsoft areas will be staffed with Best Buy staff. People employed directly by Samsung staff the Samsung areas.

The fight back against online retailers continues with various initiatives to level the playing field. Best Buy already has a promise that its products will be the same price as leading Internet-based electronic retailers. The Market Fairness Act, if it makes its way through the byzantine layers of government, will also level the field a bit, as it will force major Internet-based electronic retailers to pay sales tax on their products.

All in all, it looks as though Best Buy will remain competitive, and the idea of a department store for electronics may catch on. Either way, investor confidence is high.

By clive darr from UK (best buy hayes) [CC-BY-SA-2.0], via Wikimedia Commons