Monday, June 17, 2013

Is Microsoft Preferring Best Buy Over B&N?

In a move to expand its distribution of product and software, Microsoft is working closely with Best Buy to sell the value of its brand.  "The store-within-store format inside Best Buy will help Microsoft get its brand seen by electronics shoppers without having to make a big investment and sign a 10-year lease for a proper storefront."  And Best Buy becomes the aggregator of products for consumers to test and buy.  Best Buy is already offering space for Samsung and Apple to sell its products.  Now all Best Buy has to do is compete on price points, especially with online sellers of these same products.

Of course Best Buy makes great sense, although Microsoft is utilizing a follower strategy, being later to the market in this retail strategy.  Microsoft had an early opportunity to use its partnership with Barnes and Noble to do the exact same thing.  And with a number of B&N stores on college campuses, a chance to talk directly to a strong customer base.  A missed opportunity indeed.  But that partnership, built more closely around Nook, has gone nowhere.  Instead, B&N seems to be lowering prices on Nook and some have speculated that they will soon exit the tablet and e-reader space.  So is Microsoft backing out of B&N, too?

The Microsoft retail strategy to partner with Best Buy seems a necessary step as they may have bitten off more than they could chew by trying to open their own stores.  It may not differentiate Microsoft from others, but it enables better comparison shopping.  And hopefully on product and value, Microsoft will achieve its strategic goals. 

1 comment:

  1. Best Buy has the infrastructure in place to handle technical sales and service. For them, it's mostly a change in floorplan and signage. For B&N there's a LOT more involved if they want to move into selling desktops, laptops, and a range of tablets.