June 14, 2013 in Business

Microsoft teaming with Best Buy

‘Store-in-store’ will offer range of Windows-based electronics
Mae Anderson Associated Press
Associated Press photo

Best Buy announced Thursday it is partnering with Microsoft to feature a store-within-a-store for its Windows products, the latest major consumer electronics retailer to acknowledge advantages of the brick-and-mortar format.
(Full-size photo)

NEW YORK – Microsoft has unveiled plans for “store-within-a-store” sections in Best Buy stores, becoming the latest major consumer electronics maker to acknowledge advantages of the brick-and-mortar format.

The sections will begin opening this month and offer Windows-based PCs, tablets, Xbox and accessories, as well as trained staff to explain Windows 8 to customers.

All of the Microsoft mini-stores are expected to be set up in about 600 Best Buy locations in the U.S. and Canada by early September, around the same time analysts expect a free update to Windows 8 to be released.

The update, called Windows 8.1, is meant to reduce some of the confusion caused by a dramatic overhaul of the operating system that debuted amid much fanfare last October, only to get off to a tepid sales start.

The alliance with Microsoft comes as Minneapolis-based Best Buy continues to battle the “showrooming” effect, the term for shoppers who browse in stores then buy items cheaper online. This has led to fears that the big-box store format is growing obsolete.

But major electronics retailers are finding advantage in having a destination where trained sales staff can explain products to shoppers. Best Buy Co. Inc. has similar stores-within-stores for Apple, Samsung and Magnolia products.

None of the previous mini-stores have been as ambitious as the Microsoft format, said Jason Bonfig, Best Buy’s vice president of merchant computing. The Microsoft stores will span an average of 1,900 square feet, nearly five times larger than Best Buy’s most recent alliance with Samsung, Bonfig said in a Thursday interview.

Microsoft is counting on its stores within Best Buy stores to provide more opportunities to provide hands-on demonstrations with Windows-powered devices.

Microsoft operates more than 70 of its own retail stores in the U.S., Canada and Puerto Rico.

Best Buy shares rose 68 cents, or 2.5 percent, to close at $27.56 Thursday. Microsoft shares slipped 28 cents to $34.72.

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