November 8, 2005 2:02 PM PST

Best Buy looks to expand house-brand products

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Best Buy initiates a battle of the brands

October 4, 2004
REDWOOD CITY, Calif.--Best Buy wants to take what it's learning from customers in its stores to come up with a broader line of house-branded products.

The giant retailer is looking at ways of hooking up with start-ups and other companies to design and produce products under its own brand name, said Kal Patel, executive vice president of strategy and international at Best Buy, speaking at the Dow Jones Consumer Venture Conference taking place here.

With its own brands, the company could better compete on price against Wal-Mart and Dell, he said. At the same time, Best Buy could begin to sell products in relatively cutting-edge categories. Currently, the company sells some house-branded products under its Insignia brand, but mostly in established product categories, such as DVD players and TVs. Except for its Matrix PC line, Best Buy also does not deeply participate in the design of the products but relies on contract manufacturers/designers.

"For the next five years, we are going to see a lot of stuff coming out of the labs of Sony and Samsung, but we are also going to see a lot of innovation from a lot of other places too," he said. "There is a lot of room for collaboration with start-ups."

House brands can be difficult to pull off. Best Buy has had uneven success with its Matrix line of PCs, which it's not selling at the moment. Other retailers and some PC makers have stumbled in trying to establish LCD TV brands.

Nonetheless, Best Buy can bring a few key strengths to a start-up, Patel asserted. One, the company has shelf space all over the place. Two, starting a few months ago, Best Buy began a program to better collect feedback from customers, which gives the company information on customer preferences that may not show up, or show up in a timely manner, in sales results or via market research groups. Store representatives report that people look at but don't buy silver MP3 players? Give 'em black.

Best Buy has also begun to link up venture capital firms with "laboratory" stores in Southern California.

"We want to play a bigger part in the (product) design process," Patel said.

Start-ups that approach the retail giant, however, should adjust their pitch. Typically, start-ups promise glorious futures and huge market potential because that's what they have to tell VCs. Retailers want to hear about potential risks with manufacturing supply and inventory.

"The puffer fish sort of thing sort of turns (retail) buyers off," Patel said.

On a final note, Patel proclaimed that Best Buy is ready to cut prices along with its competitors. Analysts have said that price cutting could be particularly fierce this year.

"This Christmas we will compete on price," he said.

8 comments

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insignia quality
i own both an insignia and a sharp 32" lcd. since there are really no reviews for insignia out there i figured i'd get a little know on the street...

now, my test enviornment is with an LG upscaling dvd player on a 4 foot monster dvi cable.

in some cases the insignia appears to display a better picture, but sharp seems to have less motion ghosting. it is hard to say if the price jump is worth it, but i'll leave it like this... both tv's are wonderful.

both appear a little dark at points, but as you all know that is one of the major flaws with lcd tv's.

some tips to remember...
1. not all cables are the same. for the most part, the more you spend, the more you get. why spend a thousand or two thousand dollars on a tv and then use a cheep cable?

2. upscale. i started my test by compairing an older toshiba dvd player to my new lg upscaling dvd player, and the difference is instant. (note, remember step 1 also)

3. use the best connector your tv/dvd player has. why use rgb when you have component, or component when you have dvi, or dvi when you have hdmi. well, you get the point.

keeping these things in mind i think you will find either of these tv's great.
Posted by travisfells (6 comments )
Reply Link Flag
insignia quality
i own both an insignia and a sharp 32" lcd. since there are really no reviews for insignia out there i figured i'd get a little know on the street...

now, my test enviornment is with an LG upscaling dvd player on a 4 foot monster dvi cable.

in some cases the insignia appears to display a better picture, but sharp seems to have less motion ghosting. it is hard to say if the price jump is worth it, but i'll leave it like this... both tv's are wonderful.

both appear a little dark at points, but as you all know that is one of the major flaws with lcd tv's.

some tips to remember...
1. not all cables are the same. for the most part, the more you spend, the more you get. why spend a thousand or two thousand dollars on a tv and then use a cheep cable?

2. upscale. i started my test by compairing an older toshiba dvd player to my new lg upscaling dvd player, and the difference is instant. (note, remember step 1 also)

3. use the best connector your tv/dvd player has. why use rgb when you have component, or component when you have dvi, or dvi when you have hdmi. well, you get the point.

keeping these things in mind i think you will find either of these tv's great.
Posted by travisfells (6 comments )
Reply Link Flag
follow up
i forgot to mention that the sharp mentioned above has a dvi to hdmi cable attached to it, so it is possible that there is someimage degradation there, but i doubt anything major.

-travis
Posted by travisfells (6 comments )
Reply Link Flag
Insignia review just in
It's official, they suck. Sound goes out, picture is a joke.
Better avoiding BB altogether
Posted by liebenase (2 comments )
Link Flag
follow up
i forgot to mention that the sharp mentioned above has a dvi to hdmi cable attached to it, so it is possible that there is someimage degradation there, but i doubt anything major.

-travis
Posted by travisfells (6 comments )
Reply Link Flag
Insignia review just in
It's official, they suck. Sound goes out, picture is a joke.
Better avoiding BB altogether
Posted by liebenase (2 comments )
Link Flag
 

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