Are Best Buy and Samsung Making J.C. Penney's Mistake?

J.C. Penney's (NYSE: JCP  ) big turnaround pivoted on the idea of a store-within-a-store shopping experience. The radical shift had Wall Street enamored at first, but the novel concept is far from new. The design has been tried with mixed success across all varieties of bricks-and-mortar retailers. 

Best Buy (NYSE: BBY  ) is the most recent dying retailer to attempt such a move after announcing its partnership with Samsung to create retail shops within larger Best Buy stores. There are echoes here not just of J.C. Penney's attempted strategy, but also of Apple's own experience inside Target stores today and Circuit City stores of yesteryear. 

Whether Best Buy and Samsung can pull off an Apple retail success will depend on their execution, but what seems on the surface to be a mimicking of J.C. Penney's ill-fated strategy is actually rather different. Check out the following video for more details.

One thing is for sure: The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only the most forward-looking and capable companies will survive, and they'll handsomely reward investors who understand the landscape. You can read about the 3 Companies Ready to Rule Retail in The Motley Fool's special report. Uncovering these top picks is free today; just click here to read more.

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  • Report this Comment On April 15, 2013, at 1:02 PM, seamaj wrote:

    It didn't work for JCP 'cuz even though they changed up floor plans a bit, they did not follow through enough. I think it was a fail from the start.

    It will work for Best Buy 'cuz some people will enjoy the knowledge that comes from the Samsung associate. Knowing what the product does, and seeing demos is what keeps customers interested.

    Do you need that for clothing? I don't think so.

    Comparing JCP's strategy to BB's strategy is not a reasonable comparison.

  • Report this Comment On April 16, 2013, at 10:23 AM, onlytoreamyouout wrote:

    I currently work for Best Buy and have stock in my company, so I am constantly looking for whatever B.S. I can from people like you! Here's some facts:

    1. Samsung is one of the largest (if not THE largest) electronics companies in the world. They're highly recognized, extremely versatile, and produce very demanded products. By partnering with a success such as this, Best Buy is able to bring that customers interests in as foot traffic through our doors as a prime home location for most of our customers favorite brand. Think about this: would you call 'India' and deal with tech support over the phone if you had local support that you could simply drive to (not to mention they speak english!)

    2. Samsung is fronting the bulk (if not ALL) the monetary ties for this introduction of their stores because THEY see the value in having THEIR stores in Best Buy, so while the interest falls with Best Buy as it's OUR stores hosting these visitors, it is ultimately SAMSUNG (repeat...SAMSUNG) who is making the major jump. Best Buy has already had Apple stores in their stores for years, and we have vendor paid locations throughout ALL of our stores, so there's nothing new about us having another retailer taking space in our store. Plus, with them paying rent (yes, like roommate status), Best Buy's interests in dropping its overall footprint is being assisted as well.

    3. People are constantly looking at Best Buy as a "dying breed" or "another circuit city." Look at the facts: Best Buy has more cash reserves this year alone than in the years prior, and while there will always be customers who take advantage of the "showrooming" effect, Best Buy has been able to retain customers through it's extensive product knowledge and PARTNERSHIPS WITH ITS VENDORS (i.e. Samsung!?!?) Showrooming is affecting EVERY retailer, not just Best Buy, but my company is under attack simply because it specializes in a catagory that the average consumer doesn't NEED, but rather WANTS (with the exception of major products like computers and cell phones). I will go on record and clarify that SHOWROOMING IS DEAD!!! While it exists to this day and always will, the effect of showrooming has gone, which is proven when my company confirmed level holiday sales in it's public earnings announcements. Want more proof!? Come to MY store and deal with MY regular customers who come to see ME because I am able to provide them with the knowledge they need to take full advantage of the products they're purchasing (try to get that experience from Walmart!)

    All in all you're post is another example of personal opinion gone sour. If you want the facts, move away from the numbers and look at the behaviors. Look at what is accomplished on the front lines, and maybe....just might finally be able to write a review that actually makes sense.

  • Report this Comment On April 16, 2013, at 5:39 PM, mistacy wrote:

    onlytoreamyouout, how can your comment (i.e. opinion) can be taken seriously? You contradict yourself within 2 consecutive sentences: "I will go on record and clarify that SHOWROOMING IS DEAD!!! While it exists to this day and always will"

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