Best Buy Finally Does Something Right — with Samsung

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By Douglas A. McIntyre Published
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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.

Geek.com 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.

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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