A Best-case scenario

The Wall Street Journal this week reported [1] on electronics giant Best Buy's expansion of its mobile phone sales and services, an initiative to increase the number of handsets and carrier services available at its 841 locations across the United States. According to the Journal, Best Buy owns a 20 percent market share in consumer electronics and a 25 percent market share in IT products, but claims only 2 percent of the mobile phone market, selling roughly three million handsets a year. The retailer's response: Team with European retailer and mobile virtual network operator Carphone Warehouse to launch Best Buy Mobile, a series of stand-alone stores offering some 90 different mobile phone models as well as plans from carriers including AT&T, Verizon Wireless, Sprint, T-Mobile, Virgin Mobile USA and Boost Mobile. The strategy also prompted Best Buy to institute new and improved training policies, educating its staffers on the nuances and complexities of the mobile user experience.

Assuming Best Buy Mobile pans out, the next logical step would be a branded MVNO of its own, an intriguing possibility to say the least. The idea of a retailer-owned MVNO is nothing new, of course--in addition to Carphone Warehouse, Wal-Mart Germany launched Mango Mobile in early 2006, and rumors of a Wal-Mart MVNO targeting the U.S. market have circulated for years. But as a brand virtually synonymous with personal electronics and media content, Best Buy seems far better positioned to offer a total one-stop shopping mobile experience, especially if its Best Buy Mobile training efforts yield a knowledgeable on-site support staff. Factor in the branded music download service launched in October as well as a rumored movie download service (confirmed by loose-lipped Lionsgate Films CEO Jon Feltheimer in a conference call last month), and Best Buy is seemingly poised to capitalize on virtually every segment of the mobile value chain.  

What's most fascinating about a potential Best Buy MVNO is that it would test the power of brand recognition, not the brand affinity so long championed by MVNO advocates. Everybody knows Best Buy and what they do--each location is virtually identical to the next, with only minor differences in inventory and layout. You go there if you want a standard-issue PC, digital camera or DVD title. Shopping Best Buy for wireless phones and services, not to mention ringtones, video downloads and mobile games, doesn't require any real leap of faith in the mind of the average consumer. But it's tough to imagine anyone feeling genuine affinity for Best Buy for the same reasons--it's a homogeneous shopping experience controlled by a featureless corporate entity … like, you know, AT&T or Verizon. Mobile ESPN was sold on the basis of sports fans' personal connection to the ESPN brand and its on-air personalities, and look how that turned out. Nobody needs to love their mobile operator, or even like them very much. The Best Buy model--bland, reliable and ubiquitous--seems like the way to go; in other words, maybe facelessness is the new face of the MVNO.  - Jason [2]