Partnerships / Acquisitions

Best Buy And Amazon’s Surprise Smart TV Team-Up

Best Buy

Retail makes for strange bedfellows at times and in this week’s odd annals is the pair-up of putative rivals Best Buy and Amazon. The two firms will be collaborating on the sale of smart TVs.

Amazon CEO Jeff Bezos was joined by Best Buy CEO Hubert Joly for the announcement of the partnership yesterday (April 17) in a Bellevue Washington Best Buy location. The companies will collaborate on the sale of 11 models starting this summer. The first two brands featured will be Toshiba and Best Buy’s in-house Insignia brand. Best Buy will also feature Amazon-powered TVs in its stores and on its website.

“What we’re doing is so deeply integrated,” Mr. Bezos said, acknowledging that [Amazon] and Best Buy are often considered rivals. “It’s only possible because we trust each other.”

The partnership is not entirely new  Best Buy has been diligently selling Kindle eReaders and Echo devices in-store for some time. But the latest pair-up, according to The Wall Street Journal reports, has the potential to strongly benefit both firms as smart TV sales continue to grow nationwide.

“What’s new in this partnership is the depths of the physical integration between the software and the hardware,” Mr. Joly said. “The two companies are retailers but they’re also product companies.”

Some parts of the partnership are a bit of a question mark. For example, it isn’t known if Best Buy will be paid a standard commission for an Amazon merchant, or if a separate deal has been reached. Prices for TV sets also have not been disclosed of yet they are to be branded as Fire TV Edition. In addition, the partnership will mean that Insignia will no longer produce “Roku” TVs, though Best Buy will continue to sell Roku-powered TVs from other brands.

Best Buy has undergone something of a resurrection in recent years pushed by enhanced efforts in eCommerce, price-matching and clever uses of store locations to match digital-inventory needs.

“In the electronics and appliance space, our combined market share is about 25 percent. They’re gaining, we’re gaining, too,” Mr. Joly said in an interview last month. “It’s not a zero-sum game.”

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