Nigel Hollis, Millward Brown
Samsung will open its own retail outlets inside hundreds of Best Buy stores in the USA. The Samsung Experience boutiques will be about 460 square feet in Best Buy’s main stores and will be staffed by Samsung’s own employees and have their own check out. The move has obvious benefits for both companies.
When it comes to creating a retail experience, Apple may have been the first mover but with the tie up with Best Buy, Samsung looks set to extend its reach far beyond glitzy stores in big cities. Apple Insider reports that as of September 2012, there were 250 active Apple Stores in the USA.
Forbes reports that Samsung will open double that number of boutiques on April 8th and, if successful, I guess there is potential to expand to all 1100 Best Buy stores. As the Forbes article notes, 70 percent of the American population lives within 10 miles of a Best Buy store, so that ought to generate significant extra sales potential for Samsung. This said, Nigram Arora, author of the Forbes article, goes on to suggest that the tie up won’t impact Apple.
I have to disagree. While they may lack some of the sex appeal of Apple products, Samsung offers good products at a good price. Take that combination and improve its findability, and you have a recipe for success. The tie up with Best Buy not only improves availability of the brand, but its visibility in the Best Buy outlets. Add to that the actual experience of touching the phones and discussing its merits with the sales person and I think Samsung will put a dent in Apple’s sales.
What’s in this for Best Buy? That brand’s biggest challenge is not consumer perceptions, as suggested by Arora, but increased show rooming and a declining CD and DVD sales. As reported by Sally Herships on Marketplace, this means Best Buy has room to spare and will be all too happy to take a share of the sales made from the Samsung Experience boutiques.
In closing, I would just note that it appears that Samsung is not the only phone brand to recognize the power of physical retail outlets. This article on BrandChannel notes that HTC is going to create pop-up stores in U.S. malls in order to engage people with its products.
So what do you think of the move to create more widely available and engaging retail locations? And will Samsung’s move dent Apple or not? Please share your thoughts.
If you have any opinion, please contact Nigel.