The latest pact between the frenemies involves the sale of Fire TV-enhanced televisions.
After Amazon’s surprise acquisition of Whole Foods, the retail world has been speculating about who might be next: Nordstrom? Costco? Kohl’s? Maybe Best Buy?
You might be able to scratch that last one off the list.
As the latest Amazon-Best Buy press announcement shows, Best Buy is willing to get closer and closer with Amazon — no acquisition needed.
Amazon and Best Buy announced on Wednesday that the electronics retailer would be the exclusive brick-and-mortar sales channel for a new line of TVs equipped with Amazon’s Fire TV streaming video capabilities as well as the Alexa voice assistant technology. Amazon CEO Jeff Bezos and Best Buy CEO Hubert Joly appeared at a Best Buy store in Bellevue, Wash., to announce the partnership.
The pact gives Amazon broad distribution for its technologies in a physical setting where the majority of shopping still takes place. It also provides the online retailer with what is essentially an outsourced group of sales associates to provide shoppers with tutorials for new technologies like Alexa that still call for some education.
For Best Buy, the retailer gives its shoppers access to exclusive products that could serve as a new way to lure them inside its stores, even as Amazon introduces new services that compete with Best Buy.
Despite that competition, the companies have previously partnered in 2017 to place specialized Amazon Echo and Alexa showcases — dedicated areas to highlight the devices and educate customers — inside 700 Best Buy stores. This showcase model is one of the top reasons Best Buy has experienced such a turnaround in recent years, in addition to new initiatives such as price-matching and some luck from the shutdowns of competitor stores.
“I’ve watched Best Buy for a long time, and the last five years, since Hubert [Joly] came to Best Buy, have been remarkable,” Amazon CEO Jeff Bezos said to a group of assembled reporters at the press event, according to Best Buy. “I mean, the turnaround that got done there, from just a business case study point of view, is going be written about and talked about for a long time.”
What do we have here? The rare Bezos photo op/smooch of a quote combo alongside a competitor!
Would the Best Buy turnaround story have a better ending with an Amazon acquisition?
Of course, the rationale for an actual acquisition would have to be about way more than selling Alexa devices in Best Buy stores. Amazon would have to see real, long-term value in brick-and-mortar electronics retail.
Plus, even if both sides had interest in M&A, regulators might have something to say about it: Together, Amazon and Best Buy would own between 40 percent and 50 percent of the consumer electronics market in the U.S.
In the meantime, this frenemy relationship continues to get closer.
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