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TWICE Analysis: CE Retail Evolving Amid Marketplace Pressures

NEW YORK — Necessity has always been the mother of invention, and no less so within the CE retail channel, where margin compression and online competition are driving some very interesting experiments in store concept and design.

The latest laboratory is Samsung’s new Experience Shops, which will roll out to all Best Buy flagship and Mobile stores by June. Analysts have lauded the move as a counterweight to Apple that will help cement Samsung’s lead in Android and supercharge languishing floor space at Best Buy.

The effort is the newest iteration in a long line of vendor stores-within-a-store, which includes dedicated Apple, Chromebook and Kindle sections at Best Buy and, going back to 1999, RCA Digital Entertainment Centers at RadioShack.

Elsewhere across the CE retailscape buying groups including BrandSource and Mega offer members turnkey mattress and appliance shops, while branded stores-within-a-store are a mainstay at such independent dealers as Abt Electronics and Nebraska Furniture Mart.

Fomenting the shop movement more than most is Sony Electronics, whose various in-store installations blanket the country, from Toys“R”Us’ flagship store on the East Coast to Video & Audio Center’s showrooms out West.

At the same time, Sony, along with Apple, Bose, Bang & Olufsen, wireless carriers and more recently Microsoft, has been a major proponent of vendorowned company stores, having operated more than 50 locations at the chain’s peak.

This month the evolution continues as Sony updates additional flagship stores to a recent, Applelike redesign, Google Store rumors resurfaced, and both Sony and Microsoft revealed plans to pepper the country with temporary pop-up shops that will quickly and efficiently extend their retail presence.

At the same time, while RadioShack continues to search out a turnaround strategy, one of its independent franchisees in Minnesota has turned to a staid, yet outside-the-box category to help supplement CE sales.

The upshot on RadioShack, Google, Microsoft and Sony follow. But the quest by both retailers and vendors for new formats and assortments underscores the warning from Sears chairman/CEO Edward Lampert, who in a recent cautionary note to constituents advised, “Companies that are not innovating … are becoming less and less relevant to their customers.”