NEW YORK — Shares of Best Buy jumped Thursday after it announced plans to create store-within-store kiosks for Samsung products – a vote of confidence from a major consumer electronics retailer that the brick-and-mortar format is still an important way to sell products.
The Minneapolis-based company has battled the “showrooming” effect as more people browse in stores, then buy items cheaper online. This has
led to fears that the big-box store format is growing obsolete.
Best Buy has aggressively fought back under new CEO Hubert Joly, a turnaround expert. It has introduced an online price-matching policy, began giving employees extra training, cut costs and revamped stores.
The company will offer Samsung dedicated kiosks at 1,400 Best Buy and Best Buy Mobile stores. Shops will offer the full range of Samsung’s mobile products, including smartphones, tablets, laptops, cameras and accessories.
The move shows “a very high-profile consumer electronics vendor still finds Best Buy a relevant distribution outlet,” said Morningstar analyst R.J. Hottovy.
It’s also a way for Samsung to carve out dedicated retail space without investing in overhead necessary to open its own stores, like its chief rival, Apple Inc.
About 900 of the stores will be open by early May, with the rest open by early summer.
Janney Capital Markets analyst David Strasser said the deal is an example of Best Buy making merchandising progress. He said it might be a wake-up call that will convince other vendors, like Google, Microsoft and Sony, to invest more with Best Buy.