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Best Buy Bets Big On Ultra HD TV

MINNEAPOLIS – By resetting the bar on TV price points, Ultra HD in all its LED and OLED glory is seen by the industry as something of a CE savior.

Reigning retail champ Best Buy may not have been the first to enter the 4K waters, but with its nationwide footprint, spacious showrooms and dedicated departments and sales force, it certainly wins our vote as biggest retail booster of the technology.

It was back in April that the Best Buy, in concert with vendor collaborators Samsung and Sony, announced the rollout of branded 4K Experience shops to over 800 of the chain’s 1,000 stores (500 for Samsung, 350 for Sony).

The shops are staffed by vendor-trained personnel and feature enhanced fixtures and interactive demonstrations to showcase the manufacturers’ UHD TVs and audio products.

The announcement came one year after the launch of Samsung mobile boutiques at Best Buy stores chain-wide. Samsung Electronics America president Tim Baxter said of the joint effort, “We understand the importance of the product experience in stores and will continue to work with our retail partners to showcase next-generation technologies through effective merchandising solutions.”

Sony Electronics president and COO Mike Fasulo said his company expects the return-on-investment in the form of increased Sony business at Best Buy to be “significant,” as will the influence on Sony purchases in other venues.

Best Buy president/CEO Hubert Joly has been aggressively pursuing a branded-shop strategy – including the forthcoming rollout of Intel 3D-printing zones – in an effort to boost sales-floor productivity and replace fading categories like physical media.

The Samsung and Sony sections, along with 4K endcaps by LG, also serve to showcase the video display technology with an unrivaled scale and focus.

“I don’t know anyone out there that is better positioned than Best Buy with our new Samsung and Sony home theater stores-within-the-store,” said Best Buy chief financial officer Sharon McCollam during a second- quarter earnings call. “I don’t know how you can be better positioned to go after this new opportunity. … We would put it up against anything in the industry right now, and we’re very proud of that.”

The effort also represented the first major overhaul of Best Buy’s home theater department in nearly a decade. Features of the remodel include an open layout, listening stations for soundbars and speakers, and a new “grab-and-go” display for TVs 40 inches and smaller. Large-screen TVs by LG, Panasonic, Sharp, Toshiba and Vizio continue to be displayed along a traditional TV wall by brand.

In a blog, industry analyst Stephen Baker lauded the revamp as a welcome shot-in-the-arm for a stagnant TV market. While long overdue, and more evolutionary than revolutionary, the NPD Group VP said at the time of the announcement that “This is probably exactly what Best Buy, and others that might copy them, should do — stabilize the core [TV business] and highlight the growth potential, and then reinvent the category’s merchandising as the products reinvent themselves.”

But Best Buy didn’t stop there: The retailer, along with LG, Samsung and Sony, conducted a comprehensive 13-week consumer awareness campaign to help drive Ultra HD TV adoption. The effort, developed with input from the Consumer Electronics Association (CEA), included TV ads, digital marketing, buyers’ guides, and educational videos.

The chain is also embarking on a nationwide 4K “pub crawl” in which it installs a trio of Ultra HD TVs at popular watering holes to acquaint patrons and local press with the technology. The 55-inch sets, from LG, Samsung and Sony, stream native 4K content through UltraFlix and are accompanied by a Best Buy Blue Shirt, games and gift cards to create an event-like atmosphere.

But the centerpiece of the marketing program is a running series of in-store demonstrations held each Saturday through Nov. 1 at 50 Best Buy stores in 11 major markets nationwide. The interactive tutorials are conducted by field market teams from LG, Samsung and Sony along with specially trained Blueshirt associates.

TV merchant director Luke Motschenbacher told TWICE a key focus of the demos is the ability of the Ultra HD sets to up-scale 1080p content to near 4K quality. “We’re educating customers to the fact that they can buy with confidence now,” he said, and have a future-proof product in place when native content becomes more plentiful.