BELLEVUE, Wash. – Amazon has built its brand as a digital marketplace, but it is becoming increasingly clear that it also needs a great physical presence to sell the devices that customers continue into Integrate Amazon ecosystem.
A deal announced Wednesday that Best Buy will exclusively sell Amazon's Fire Edition Smart TV suggests that it can no longer reach the scale without access to more bricks and mortar.
In a rare sit-down meeting with a small group of reporters on Tuesday, Amazon CEO Jeff Bezos announced the announcement along with Best Buy CEO Hubert Joly.
This summer, Best Buy will sell more than ten Series 4K TV and HD Fire TV Edition TV models from Insignia, its own Best Buy brand, and Toshiba. The TVs will include Amazon Fire TV so users can search for and watch TV shows, or from a catalog of streaming TV episodes and movies from Netflix, Prime Video, HBO, PlayStation Vue, Hulu, and other streaming websites can choose.
The televisions also include a voice-operated remote control with Alexa's voice-controlled assistant, and are set up to pair with any echo device. Users can send commands to their TV via their echo.
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Bezos and Joly posted their announcement in a small space for the demonstration of television sound systems on the back of a Best Buy Bellevue, Wash., USA] Amazon CEO said he was thrilled with the possibilities, as a Fire TV-enabled TV set offers consumers the convenience and simplicity they want in the increasingly important Smart TV segment.
"The data shows that it grows about 70%, and over the year it is also a natural place for us to work together because the customers are very interested in it," Bezos said.
Fire TV Edition Smart TVs will be available exclusively at Best Buy Stores and BestBuy.com. In a first, they are also sold on Amazon, with Best Buy acting as a third party on the website.
Best Buy and Amazon have a long history dating back to the Kindle Reader. Today, around 700 Best Buy stores have an Alexa display board where shoppers can see how Alexa works, especially with smart home products, according to Joly.
"What's new in this partnership is the depth of physical integration between the software and the hardware, between the two companies working together – especially the two companies are retailers, but they are also product companies."
Televisions are increasingly away from boxes and add-ons that access content such as cable TV or Amazon Prime Video. Instead, this functionality is built into the operating system and hardware of the TV.
To compete in this changing market, Amazon needs to bring its Fire TV operating system to customers' living rooms, said Stephen Baker, vice president of consumer electronics at the NPD Group.
Once the hardware in the house, Amazon can use this to reach consumers with Alexa, his smart home deals and everything else to come.
The deal shows that Amazon understands that it will be both a hardware company and an online company
"And to be a hardware society that you have to play nicely. Nobody can be successful in the magnitude, Amazon wants to sell its own stuff, you have to go to other partners, which shows you realize how important that is, "said Baker.
A store is more important for new or complex technologies that need an explanation for consumers to really get them to buy.
"Amazon gets all of this credit and says it's innovative and disruptive, but the fact is that it was a one-channel operator until it took over Whole Foods, and true scaling is no longer achieved in a single channel." said Carol Spieckerman, retail analyst at Spieckerman Retail.
This is especially important for Fire TV because it's an Amazon product that has not always found its way.
"When you go to Amazon.com and look at reviews from Fire TV, there are often over 1,000 questions asked about connectivity and compatibility, and Best Buy employees can help smooth out those friction points and turnovers to generate, "said Spieckerman.
Amazon's sheathing of bricks and mortar is not new. The e-retailer is increasingly expanding its presence in the physical world. It opened 15 Amazon bookstores and last year bought Whole Foods, which gave it 479 grocery stores. In addition, it has teamed with Kohls to sell Amazon smart home products in its stores, which now also accept Amazon returns.
There were also different versions of the TVs available on Best Buy. Amazon has already sold an item Fire TV-enabled TV, although this deal is now over. And an Amazon.com search is selling a page of televisions compatible with Alexa.
Rather, the deal is "an incremental move, a stitch in the tapestry that will be necessary if Amazon is to realize its ambition is also a good coup for Best Buy, reinventing itself as a branded retailer becomes a flagship location for many of the brands it carries.
And it does not hurt in a climate where Amazon gets a lot of heat to hurt the retailer, to show that it's not just a juggernaut crushing everything in its path.
"They do not always have size and scale anywhere. Anyone who's smart like Best Buy can use that, "said Baker.
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