Consumer electronics retailer Best Buy (BBY) has set its sights on the mobile phone market, and so far, it seems to have had some luck with moms, according to a Financial Times report.
At a time when most retailers are skimping on major capital investments, Best Buy plans to open as many as 1,000 small in-mall stores which will exclusively sell mobile phones. For the year, the company's goal is to open 75 to 100 mobile phone stores.
The small-store model was devised because the company recognized it needed to improve the cell phone buying experience: People find shopping for cell phones less appealing than "going to the dentist," as Best Buy CEO Brian Dunn tells the Financial Times. Ultimately, the hope is that Best Buy can grow its mobile phone market share in the U.S. from 4% to 15%. The company says it has already doubled its market share from 2% since it launched its mobile initiative in 2008.
Right now the typical customer at these stores (there are already 77 of them) is a woman or a "mom with a couple kids," according to Dunn. Attracting that demographic is no small feat given that women control 73% of household spending -- about $4.3 trillion. But the one area where women have less influence than their partners or husbands on purchases is consumer electronics. Women surveyed by AdAge for a white paper on "Real Moms" said their husbands or partners had more control over those purchases.
This plan is only one of Best Buy's many recent attempts aggressively pursue the high-margin mobile market. Since the retailer first forged a $2.1 billion venture with British electronics retailer Carphone Warehouse in 2008, it has inked many agreements to sell some of the most sought-after cell phones, including the Palm Pre and the Motorola Droid. It also scored a deal to become the first independent retailer to sell Apple iPhones.
So far, the strategy seems to be working. For the fourth quarter, the company said same-store sales were helped by mobile phone sales (as well as laptops and flat-screen TVs) while CD and DVD sales declined.
What will Best Buy's next move be in its attempt to conquer the mobile world? The company has been rumored to be eying a possible acquisition of RadioShack. A Best Buy spokesperson wasn't immediately available to comment.
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