Best Buy, Amazon team up to sell smart Fire TVs

Dive Brief:

Amazon and Best Buy are teaming up to sell Amazon’s new Fire TV Edition smart TVs to customers in the United States beginning this summer and in Canada later this year, the companies said on Wednesday in a press release.
The smart televisions, manufactured by Insignia and Toshiba, are loaded with Amazon’s Alexa voice assistant, and an Alexa-powered "voice remote" to launch apps, search for TV shows, play music, switch inputs and control smart home devices, among other tasks. The TV can also be paired with any Echo device.
Best Buy will sell more than 10 of the 4K and HD Fire TV Edition models, with more coming later in the year. They're for sale exclusively in Best Buy stores, on BestBuy.com, and for the first time, from Best Buy as a third-party seller on Amazon.com.

Dive Insight:

At first glance, this may appear to be a deal with the devil. As Amazon rose in the electronics segment, Best Buy seemed doomed to cede share. Amazon’s sales of electronics have grown over the years to the point where it siphoned off 90% of the category’s growth in 2016, Deutsche Bank analysts warned in a report last year. Amazon’s electronics sales grew 4% year over year in 2017 to an estimated $8.5 billion, pushed in part by its surging voice shopping, according to marketplace analytics firm One Click Retail.

While consumer goods and apparel companies can better control their brands by selling through Amazon themselves as Best Buy has now decided to do (rather than leaving things up to third parties on the Amazon marketplace), research shows they risk Amazon evaluating their best sellers to create its own private label items.

Such concerns didn't stop Best Buy from tapping Amazon’s Alexa over the holidays, and it was rewarded. By Black Friday and Cyber Monday, Best Buy had "stolen the show" as the most prepared retailer using voice shopping, according to a report from managed analytics firm Ugam.

"What I found fascinating — and smart —was that they were showcasing private label products. And they never lost on price," Ugam co-founder Mihir Kittur told Retail Dive in an interview. "In fact, Amazon was more expensive on 13% to 14% of those similar items."

Moody's Investors Service Lead Retail Analyst Charlie O'Shea also sees the latest joint effort as a win-win, according to comments emailed to Retail Dive. "In this iteration, Best Buy gets new devices that will drive foot traffic into its stores, and Amazon gets a brick-and-mortar showroom for more of its proprietary products," he said.