By Amy Gilroy
Updated! It appears Best Buy has its eye on selling car radios and electronics not just to retail consumers but through car dealerships; and it will team up with Seattle, WA-based Car Toys to do so.
The big box retailer will join forces with Car Toys to test market Best Buy’s entry into expeditor sales (selling car radios, etc. at car dealerships) according to three high level industry sources. Best Buy will test market the program in Boise, ID and Minneapolis, MN with at least one of the markets to launch possibly this month, said two of the sources. It’s possible that the Geek Squad will eventually perform the installs.
Car Toys said it had no comment on the story and Best Buy also said it “does not have a comment for your story at this time.”
For its part, Car Toys, a 52-store car audio/mobile phone store with locations in four states, does a significant business in expeditor sales, say industry members. It employs over 1,200 people, claims sales of $130 million annually, and is a member of the PRO Group buying group. Car Toys recently said it was positioning the company for change by hiring Jim Warren as its head merchandiser. Warren was recently VP Mobile Audio at Audiovox (a company with a significant expeditor presence) for a few months before rejoining Car Toys.
Lest anyone underestimate the prowess of Car Toys’ legendary CEO Dan Brettler…don’t. He started yet another company called Wireless Advocates, which operates the mobile phone kiosks within Costco stores.
From here there’s lots of speculation. Why would Best Buy need Car Toys if it wanted to enter the national expeditor market? Perhaps Best Buy wants Car Toys to run an expediter car sales department within Best Buy. The CE chain has created many store-within-a-store departments including the Geek Squad, Magnolia Home Theater and Pacific Sales, although in these cases, Best Buy purchased an outside company and co-opted it into a Best Buy department. We’ll have to wait for a formal announcement from Best Buy to find out.
Then there’s the impact Best Buy would have on the thousands of car stereo shops around the country that have forged their own expeditor deals with local car dealers. Many 12-volt shops strike arrangements with a few nearby car dealers so that a GM dealer, for example, might offer its customers the option of adding a rear seat TV or navigation system to their new car (usually at a lower cost than the factory option). Then the 12-volt shop provides the equipment and installs it. To the car stereo shop, this is an important side business, especially in trying times such as these. A national Best Buy expeditor network could pose yet another challenge to already challenge-weary specialists.