Best Buy Mobile depts. On the move

With every major supplier jumping into smartphones, the category is on pace to produce big sales this year as customers transition from traditional cell phones. And Best Buy is moving into the market in a big way with the expansion of in-store mobile phone departments.

The company, which tested the section in 181 stores last year, rolled them out to more than 400 additional stores this spring and now has them in 599 stores. “We have plans to scale Best Buy Mobile to the majority of our U.S. chain in the next 18 months,” said Best Buy president Brian Dunn in a recent conference call. “Our initial results showed tremendous customer response.”

During its most recent quarter, Best Buy posted a 50% increase in mobile phone sales, something it attributed to the in-store departments. The stations offer a wide range of phones and service plans from top suppliers like Samsung, LG, Blackberry and Motorola.

The success of Best Buy Mobile and the smartphone business in general has other retailers jumping in, with a recent report suggesting one-time cell phone sales leader RadioShack will be next.

In a company alert published July 17, Deutsche Bank analyst Michael Baker said, “Our source indicates that RSH [RadioShack] is building three test stores to open by October and then will hope to have 10 by the year end, 150 in the next 12 months and 400 in three years, if successful.”

He continued, “RSH is targeting higher-end, non-mall real estate, so existing stores may not be suitable for conversion, despite a similar square footage.” Baker added that his source believes the stores will “replicate the look and feel of Apple Stores and that RSH has hired the same group that designed those locations.”