Best Buy Doubles Down on Mobile

Best Buy, already the largest electronics retailer in the United States, is opening 1500-square foot mobile stores in shopping malls in an attempt to grab a larger share of the mobile phone market. The chain has already opened 77 such stores and plans to open as many as 1,000.

The move creates an interesting challenge for the brand, which will now compete more directly with Walmart and Radio Shack (recently relabeled "The Shack"). Walmart has about a third and Radio Shack about a quarter of the U.S. mobile market.

But there's an added benefit to the new mobile store strategy: new customers. Brian Dunn, Best Buy's chief executive, tells the Financial Times that the typical customer of the mobile stores is "a mom with a couple of kids." Since the larger Best Buy stores appeal more to the male demographic, "these are incremental connections we are making," says Dunn.

Best Buy also plans to take advantage of smartphones to get smarter with customers, employing them to message consumers as they enter its stores.

Best Buy is known for its aggressive sales strategy, which undoubtedly helped put such retailers as Circuit City and CompUSA out of business. In fact, Best Buy has been one of the primary beneficiaries of Circuit City's demise a year ago. A new report from market research firm The NPD Group indicates that Best Buy and Walmart "captured two-thirds of Circuit City's dollar share from March 2009 through December 2009."

By getting tireless about wireless, Best Buy is hoping to weather the downturn. It's also diversifying its inventory. In addition to selling computers, televisions, stereo systems, digital cameras—and, in select stores, electric bikes and scooters—soon, according to The Wall Street Journal, the retailer could add electric cars to its inventory.