It wasn’t too long ago – last year – that many were calling Best Buy Co., Inc. (NYSE:BBY) the next Circuit City. But after restructuring much of its business, seeing significant e-commerce growth, and its new mini-store concept has pushed shares higher by 200% this year. At one point, investors thought Best Buy Co., Inc. (NYSE:BBY)’s 40,000 square foot stores were a liability, but now they appear to be great assets.
Why such a great asset?
Last year, roughly 600 million people walked into one of Best Buy Co., Inc. (NYSE:BBY)’s 1900 stores, and another one billion visited the company’s online site. In a market where advertising revenue has created billions for the likes of Facebook and Google Inc (NASDAQ:GOOG), Best Buy Co., Inc. (NYSE:BBY) is now using its large space and volume as a way to attract consumers and corporations.
Apple Inc. (NASDAQ:AAPL) was the first to use a small space within Best Buy Co., Inc. (NYSE:BBY) stores to showcase Macs and its iPads. Samsung followed suit, as Best Buy Co., Inc. (NYSE:BBY) announced mini-stores in 1,400 Best Buy locations, with an average 460 square feet per store to showcase Samsung products.
Samsung is attempting to improve their market share in the U.S. The company currently controls 40% of the global smartphone market, but just 21% in the U.S. as of April 2013, compared to Apple Inc. (NASDAQ:AAPL)’s 38% share.
An estimated 70% of the U.S. population lives within a 10 mile radius of a Best Buy store, which gives reason to believe the Best Buy experience could bolster Samsung’s market share, which is not good for Apple Inc. (NASDAQ:AAPL).
Still, 460 square feet is relatively small compared to the overall size of Best Buy stores. With that said, Microsoft Corporation (NASDAQ:MSFT) made the biggest Best Buy splash back in June. Microsoft Corporation (NASDAQ:MSFT) struck a deal to open mini-stores in 500 U.S. stores and another 100 Future Shop locations in Canada. These mini-stores range from 1,500-2,500 square feet, by far the largest piece of real estate of the three tech giants.
The biggest deal yet
Throughout the mini-store makeover, we have seen that deals have grown larger for Best Buy, as tech companies have shown a continued interest in acquiring space in the retail giant’s stores. However, the latest rumors involving Google Inc (NASDAQ:GOOG) make the Apple Inc. (NASDAQ:AAPL), Samsung, and Microsoft Corporation (NASDAQ:MSFT) deals look puny.
According to Robert Scoble, a well-known author, blogger, and technology evangelist, who often breaks technology news, Google Inc (NASDAQ:GOOG) is planning to rent 6,000 square feet at every Best Buy to promote Google Glass. Clearly, this would be the largest deal yet, renting 13%-30% of store space.