Best Buy adding Vizio to stable of TV brands
NEW YORK (Reuters) - Best Buy Co Inc (BBY.N) has struck a deal to sell Vizio televisions, bringing one of the most popular and aggressively priced U.S. TV brands to the world's largest consumer electronics retailer's aisles later this month.
The strategic partnership with the Irvine, California-based manufacturer comes at a time when U.S. retailers are looking to satisfy a growing consumer appetite for larger screen TVs at competitive prices.
"One of the reasons why we felt it was a good time to bring in the product now is Vizio has made some strategic investments in bringing ... very compelling, competitive and advanced large-screen TVs to market," Mike Mohan, head of Best Buy's home business group, told Reuters.
"They were able to deliver 60-inch and 70-inch TV products in the last few weeks that we believe will be compelling," he said.
Vizio already sells its wares at several of Best Buy's rivals, including warehouse clubs Costco Wholesale (COST.O), Sam's Club and BJ's Wholesale, discounters Wal-Mart Stores Inc (WMT.N), Target Corp (TGT.N) and online chain Amazon.com Inc (AMZN.O).
"What Best Buy brings to bear, versus the club channel and the mass merchandise channel, is a significant proficiency in selling large TVs," Mohan said on Wednesday afternoon.
In the second quarter of 2007, Vizio skyrocketed to the top by becoming the most shipped brand of flat panel HDTVs in North America, according to the manufacturer's website.
For the first 10 months of 2012, Samsung (005930.KS) had 18 percent of the U.S. TV market, with Vizio in second place with 14 percent, said Stephen Baker, an analyst with market research firm NPD.
Vizio has "become a strong tier 2 player and no longer an entry brand," said Tamaryn Pratt, principal of Quixel Research. "Consumers are comfortable with the brand and trust it for value."
The partnership with Best Buy also addresses Vizio's need for "an outlet to sell more big screen," Pratt said.
Vizio, founded in October 2002, has very lean staffing, outsources a lot of its manufacturing to a partner in Taiwan and has strong relationships with original design manufacturers and contract manufacturers in Asia, Baker said.
"They have definitely found ways to take some of the costs out of the logistics/supply chain equation, and passed on the savings to customers," Mohan said.
Best Buy already carries TVs from suppliers that make up a who's who of the tech world, including Samsung (005930.KS), Sony (6758.T) and Toshiba (6502.T). The retailer also sells TVs under its own brands of Dynex and Insignia.
Another factor that Best Buy found appealing was Vizio's "strong interest in participating in categories beyond TV," Mohan said.
In September, Vizio's high-definition televisions won the highest ranking in customer satisfaction from J.D. Power and Associates.
(Reporting by Dhanya Skariachan; Editing by Gary Hill and Gunna Dickson)