Best Buy Co., Inc. (BBY): Will This Company’s Horrible Customer Service Sink Samsung?

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Is it just me, or is going into a Best Buy Co., Inc. (NYSE:BBY) a little like getting poked in the eye? “In addition to price, we believe our ability to deliver a high quality customer experience offers us a key competitive advantage,” claims its most recent annual report (emphasis mine). Really? Does that include ignoring customers and heaping thinly veiled disdain on those you do interact with?

Best Buy Co., Inc. (NYSE:BBY)

Perhaps I’m being too harsh here.

I admittedly don’t frequent electronics stores in general, or Best Buy Co., Inc. (NYSE:BBY) in particular. Like a growing number of consumers, I buy my electronics either online or at Costco Wholesale Corporation (NASDAQ:COST). Beyond price, I really do find visits to Best Buy Co., Inc. (NYSE:BBY) increasingly dreadful. While it may claim to “deliver a high quality customer experience,” I prefer a complete absence of customer service (a la, Inc. (NASDAQ:AMZN)) over what’s offered at Best Buy Co., Inc. (NYSE:BBY).

It’s for this reason that I find Samsung’s decision to cozy up to this otherwise-waning retailer so peculiar. In case you missed it, at the end of last week, the companies announced a new strategic partnership, under which Samsung will open stores-within-stores inside all Best Buy Co., Inc. (NYSE:BBY) locations by the middle of this year.

“Samsung sees the boutiques as an opportunity to educate shoppers about its products and sell some of its less-well-known gadgets,” one of the company’s marketing executives told The Wall Street Journal. And on Best Buy Co., Inc. (NYSE:BBY)’s side, “the new departments are part of Chief Executive Hubert Joly’s effort to focus the stores on fast-selling products and strengthen relationships with key vendors.”

This is clearly marrying up for Best Buy. Since the advent of online retail, the bricks-and-mortar retailer has struggled to drive traffic into its stores and convert what traffic is there into higher sales. As a result, for the 12 months ended Feb. 2, its same-store sales were down 2.9% according to Standard & Poor’s Capital IQ. It has nothing to lose, in other words, by entering into the agreement with Samsung — and thus the reason its shares led the S&P 500 last week.

The same, however, can’t be said for Samsung itself. To revisit the matrimonial analogy, this is a clear case of marrying down for the South Korean electronics maker — and I mean way down.

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