Best Buy increasing private-label product offerings?

Posted Apr 28th 2009 5:20PM by Brian White
Filed under: Marketing and Advertising, Best Buy (BBY)

Best Buy, Inc. (NYSE: BBY) wants to carry the best brand-name products in the consumer electronics arena. At the same time, it wants to pit those brands against its private-label products and try to hit both the brand-conscious as well as the price-conscious consumer.

The reason Best Buy thinks it can win in the private-label arena where many retailers have seen mixed to negative results is the use of customer feedback to drive feature levels and pricing. This could be an example of a national retailer actually designing for and listening to customers directly without the need for a third party (outside manufacturer) to get in the way.

It's already happening as well. In the retailer's latest fiscal year, sales of private-label consumer electronics spiked by 40% in Best Buy stores. Items like a Google-enable GPS systems and stripped-down digital picture frames are some examples. If Best Buy could develop in-house names (Insignia, Dynex, Rocketfish etc.) into actual preferable customer brands, that would be yet another arrow in its quiver against larger discounters like Wal-Mart Stores, Inc. (NYSE: WMT) and Target Corporation (NYSE: TGT), which both have a pretty poor private-label consumer electronics presence.

Tags: BBY, Best Buy, BestBuy