Best Buy rolling out phone-only stores

Best Buy is rolling out freestanding stores that exclusively deal with cellular phones. They carry multiple models from a number of carriers in their big-box format, and this concept can “travel” easily to smaller locations. Here’s my take from this week’s Retail Wire:

Of course, the biggest problem with the cellular phone shopping experience in the U.S. is that consumers are at the mercy of their carriers. Unlike almost every other product category, you are shopping for a carrier and a contract first, with the actual product ending up as something of an afterthought. Apple began to turn this business model upside down by driving sales of a great product first, and making the rest of the transaction secondary (if not cheap). But most carrier-driven stores (AT&T, Verizon and so on) seem to be more interested in selling contracts than selling phones, because that’s where the money is.

At least the Best Buy model provides an alternative, where the consumer can focus on the phone’s features and benefits first, provided that he/she isn’t already locked into a pre-existing contract. And Best Buy simplifies the pricing strategy by taking mail-in rebates out of the equation. Opening free-standing stores is a huge opportunity for Best Buy to take this fast-growing segment of its business outside of the “big box” framework and to a much more cost-effective, convenient location strategy.


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