Best Buy to open shops inside of Macy’s stores

During Best Buy’s second quarter earnings call, CEO Hubert Joly pointed to vendor relationships, specifically store-within-a-store concepts, as one of the key advantages that has helped the retailer increase same-store sales in the U.S. for four straight quarters. Now, it seems, the chain is such a believer in the store-within-a-store strategy that it sought out and reached a deal to open its own branded shops inside of 10 Macy’s locations in time for the Christmas selling season.

The shops, each about 300 square feet, will be staffed by Best Buy personnel and feature Samsung smartphones, tablets and smart watches as well as a variety of audio devices and accessories from a variety of brand manufacturers.

"We are delighted that consumer electronics will be returning to selected Macy’s stores through this test, which will allow us to learn how we can best serve our customers’ needs in this very sophisticated category," said Jeff Gennette, president of Macy’s, Inc., in a statement. "Our customers have expressed interest in electronics for self-purchase and gift-giving, and this collaboration with Best Buy reinforces Macy’s as a shopping destination throughout the year for the products that are most in demand."

Best Buy showroom – Photo: Best Buy

The two retailers plan to test the store-within-a-store concept through the holiday season and into 2016 before deciding on "next steps," according to Mr. Gennette.

The addition of Best Buy shops provides a tentative step back into consumer electronics for the department store chain. Macy’s, which presently has a J&R Music World shop in the basement of its Herald Square flagship in Manhattan, has also placed consumer electronics kiosks in select stores in recent years.

In partnering with Best Buy, Macy’s has chosen a partner that has rebounded under the leadership of Mr. Joly after years of trying to find a path back to profitability and top line growth.

This is not the first time Best Buy has partnered with another major retail chain. Back in 2012, Best Buy placed Geek Squad members at Target stores in Denver and Minneapolis before calling off the test after six months to focus its resources on its core business.

• Macy’s and Best Buy Partner to Test Consumer Electronics Departments in Macy’s Stores – Macy’s, Inc./Business Wire
• Best Buy Testing CE Shops in Macy’s – TWICE (tiered sub.)
• Best Buy to open mini-shops inside of 10 Macy’s stores – Star Tribune (tiered sub.)
• Best Buy in on a roll – RetailWire
• What now with Geeks out at Target? – RetailWire