Best Buy Co., Inc. (NYSE:BBY) is planning to open up mini Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) stores inside its locations, and shares are jumping on the news.
The stock rose almost 10 percent after the announcement as investors responded to the retail chain’s new attempt to combat what’s become known as “showrooming.”
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The first new boutiques will open on April 8, and there will be Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) boutiques in different Best Buy Co., Inc. (NYSE:BBY) stores around the U.S. The boutiques will be known as Samsung Experience Shops.
Bloomberg was one of the first to report the news Wednesday night. The publication reported that the shops would open in 500 Best Buy locations and take up approximately 460 square feet inside the stores. It also said there would be smaller Samsung shops in about 1,000 other stores by June.
Shares of Best Buy Co., Inc. (NYSE:BBY) started jumping when the markets opened today. This morning Forbes reports that there will be Samsung shops inside 1,400 of Best Buy’s big box stores and also the retail chain’s small mobile locations. Best Buy is expected to open the first 900 Samsung shops as early as next month.
The shops will enable the retail chain to become better able to battle the main problem that has plagued its sales and concerned investors. The practice known as “showrooming” involves visiting Best Buy to simply look at and try out a product and then going home and ordering it online. Best Buy estimated that about 40 percent of consumers who come to its stores do so without planning to buy anything there.
By having Samsung boutiques inside of Best Buy’s stores, the company will be able to have salespeople who know everything there is to know about Samsung and talk people into buying on the spot instead of ordering it online later.
The same principle is being practiced at other retailers and appears to be helping their sales.
Apple Inc. (NASDAQ:AAPL) did something similar in its stores four years ago under retail chief Ron Johnson. Then he went to J.C. Penney Company, Inc. (NYSE:JCP) and did it again, and so far, it looks as if it’s working.
Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) will also benefit from the boutique stores by having salespeople who can specifically push its products rather than a mix of products from a variety of competitors, like Apple Inc. (NASDAQ:AAPL).
Other major electronics retailers could also open similar shops at Best Buy stores in the future.