Best Buy and Amazon expand their coopetition
Best Buy may not be an Amazon.com killer, but in recent years the consumer electronics chain has earned praise for its ability to hold its own against the e-tailing behemoth when many others have failed. That’s what makes noteworthy the announcement that the two companies are banding together in an exclusive deal that will have Best Buy selling Amazon’s Fire TV Edition smart TVs in its stores and becoming a merchant on Amazon’s site.
Amazon’s TVs will roll out in Best Buy stores this summer. The items will also be available on BestBuy.com and Amazon where they will be sold exclusively by Best Buy as a third-party merchant on Amazon’s marketplace.
Amazon CEO and founder Jeff Bezos said the deal between the two companies is possible because of the trust they have built over years working together. Best Buy has sold Amazon products in its stores and online going back to the early Kindle e-readers.
According to a Wall Street Journal report, the deal will provide Best Buy with access to Amazon’s customers for the first time while “broadening Amazon’s potential audience for products that feature its Alexa voice assistant.”
“Our goal is to enrich the lives of our customers by offering them the very best products and services, whether they come to us online, visit our stores, or invite us into their home,” said Hubert Joly, chairman and CEO of Best Buy, in a statement.
Best Buy comes off a fourth quarter in which the retailer saw same-store sales increase nine percent. Its online business grew 18 percent during the period and now accounts for 20 percent of its total U.S. sales.
- Amazon and Best Buy Announce Exclusive Multi-Year Partnership to Offer New Fire TV Edition Smart TVs – Amazon/Best Buy
- Retail Rivals Amazon and Best Buy Team Up to Sell Smart TVs – The Wall Street Journal
- Best Buy (BBY) Q4 2018 Results – Earnings Call Transcript – Seeking Alpha
DISCUSSION QUESTIONS: What will the Best Buy/Amazon deal mean for the two companies as well as retailing rivals? Do you expect to see more cooperation between erstwhile competitors within the retailing business?