The consumer-electronics retailer is hoping to capitalize on the launch of Windows 8. It's trying to lure customers with exclusive computers and staffers trained to explain and demonstrate the new operating system from Microsoft Corp.
Windows 8 has a new look that's intended to create a seamless experience for users, whether they're on PCs, tablets or smartphones. Featuring a colorful array of tiles that fill the screen instead of the familiar start menu and icons, it's designed especially for touch-sensitive screens. Windows 8 will come pre-installed on almost all new PCs.
Best Buy Co. spent three years coming up with a plan for the launch. That includes two years of developing 45 exclusive Windows 8 computers and laptops designed with manufacturers such as Hewlett-Packard Co. to AsusTek Computer Inc. Nearly half of those computers feature touch screens. (Best Buy will also carry a wide range of non-exclusive Windows products, including tablets and smartphones.)
Microsoft's radical remake of Windows arrives at a time when Best Buy is struggling to avoid the fate of Circuit City, which liquidated in 2009. The company hopes the new Windows will spur sales as it faces tough competition from online retailers and discounters. Consumers' tastes are shifting to tablets and smartphones and, at the same time, they increasingly use Best Buy stores to browse for electronics before they buy the items online at lower prices, a practice known as showrooming.
Best Buy, which is based in Minneapolis, hasn't reported an increase in net income for two years.
Exclusive products are one way traditional brick-and-mortar stores are battling showrooming.
Another is customer service. To that end, Best Buy spent 50,000 hours training its staff members to show customers the ins and outs of Windows 8, as it's very different from its predecessors. Windows 8 is the biggest Windows revamp since Windows 95.
In addition, its Geek Squad technical service staff created 12 two-minute tutorials available online, each explaining a different feature of Windows 8.
"The demo experience becomes very, very important because of newness of touch feature," said Jason Bonfig, vice president for computing at Best Buy.
Morningstar analyst R.J. Hottovy's expectations are muted in terms of how much Best Buy will benefit from the launch. He believes Windows 8 "might give a temporary lift to sales, but longer term it doesn't solve any of the real issues facing the company," he said.
Barclays analyst Alan Rifkin crunched numbers on past Windows launches and found they did not provide a significant boost to retailers.
"While our research reveals that personal computer demand has been uniformly weak in the two to three quarters preceding a Windows release, historical Windows releases have not been identified as significant drivers of improved performance once the launch has taken place," he wrote in a note on Thursday.
Best Buy sounded more positive. The retailer started taking advance orders for Windows 8 devices and demo-ing the product on Sunday, and so far the response has been positive, Bonfig said.
"We've been very happy with interest and traffic in stores," he said.
