Amazon and Best Buy Partner to Sell New Line of 4K and HD TVs
Best Buy announced today that it is partnering with Amazon to bring ten new “4K and HD Fire TV Edition models televisions from Toshiba and Insignia,” to market this summer. Hubert Joly, Best Buy chairman and CEO, commented:
Our partnership with Amazon is exciting because we believe Fire TV Edition delivers an incredible user experience and further strengthens the growing connection between home theater, home automation and voice control.
The release also states that Best Buy chose to work with Amazon because of Fire TV’s “innovative user experience combined with the intelligence of Alexa.” In 2017, every wireless speaker manufacturer suddenly became aware of the fact that consumer expectations were quickly changing. Wireless speaker models that didn’t have an embedded voice assistant would be at a disadvantage. A similar epiphany seems to be gripping television makers this year.
CES 2018 was flooded with dozens of voice-interactive smart TVs. Given that cable and satellite providers also offer voice control, it is unclear how users are differentiating between voice control offered by their television service and the TV itself, but the trend is unmistakable. And, retailers like Best Buy want to have the products with the highest demand. Consumers will presumably be able to purchase the new TVs directly from Amazon, but television shopping remains an experience buy for many shoppers. They want to see the product they are spending hundreds or thousands of dollars to acquire. This makes it all the more important for Amazon to have physical retail distribution for the new Fire TVs and Best Buy may become a beneficiary of being one of the few retailers that will carry Amazon products.
Amazon and Best Buy Buck Retail Competition Trend
There is a commonly held belief that all retailers view Amazon as a existential threat. Best Buy and Amazon are fierce competitors for electronics retailing. Yet, Amazon Echo products are sold in Best Buy stores throughout the U.S. and on the company’s website. Best Buy also created an Alexa skill that allows shoppers to make purchases and receive product recommendations. Amazon now has enlisted Best Buy to sell its new Fire TVs which are a strategic product line designed to further embed Alexa and Amazon Prime Video into consumers’ daily rituals.
At @BestBuy catching up with CEO Hubert Joly and announcing our collaboration on the next generation of smart TVs. Couldn’t ask for a better partner, and the product is killer. Full Alexa integration: “Alexa, watch ABC” or “Alexa, watch Westworld.” #FireTVEdition pic.twitter.com/Dsq8VBOSA7
— Jeff Bezos (@JeffBezos) April 18, 2018
Best Buy isn’t the only retailer that is flirting with Amazon. Kohl’s began adding Amazon store-within-a-store sections to some of its locations in the fall of 2017. Those mini-Amazon stores gave the company a physical retail presence in 10 Kohl’s locations with the intent to expand to 72 more. Retailers like Walmart and Target are aligning themselves with Google and avoiding any hint of collaboration with Amazon. That seems to be the more common retailer approach to Amazon today. The experiments by Best Buy and Kohl’s are notable in part because they are rare. The fact that Best Buy explains its rationale in the press release is a sign that many retail industry observers will see the collaboration as a risk.
“The partnership with Amazon is an example of Best Buy’s unique role in working with the world’s foremost technology companies, helping to commercialize their innovations and bring them to life for the consumer.”
The conflict exists because both companies are in the retail business. However, the opportunity for collaboration has come about because Amazon is increasingly making products that it sells. Because the company wants to sell products like smart TVs and smart speakers and physical retail sales are ten times larger than online shopping, Amazon will increasingly look for these types of partnerships.