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Samsung takes the floor at Best Buy
Apple has its own stores. Microsoft has its own stores. Now Samsung says it's getting into the game. Sort of. Next month the electronics company will open special shops in hundreds of Best Buy stores. Many of the locations will have their own trained and dedicated staffs and separate check-out lines.
Best Buy can use the company. The big box retailer has a serious space issue.
“Well, they’ve got too much of it,” says Mara Devitt, a retail consultant with McMillan Doolittle. Part of Devitt's job is helping clients find retail space in cities like New York. She says the hunt for the right storefront is one expenditure of time and money Samsung can skip. She says CDs and DVDs use to crowd Best Buy’s shelves, but now that they've moved on line, it's a different story. “It leaves a lot of room in those stores for more compelling products.”
Samsung's shops could help Best Buy fight back against showrooming, when consumers check out products at the store but then buy them online. “The last thing Samsung and Best Buy want to you to do is shop in Best Buy and then buy someplace else," says Richard Doherty, of market research firm Envisioneering.
Doherty says Samsung’s plan will help both companies. Samsung can reach more customers for its new Galaxy smart phone and other electronics while Best Buy will get a piece of the action and a percentage of the cell phone contracts sold in its stores. Analysts say the partnership should also help Best Buy continue its turnaround.
But can’t Samsung just put its goods on Best Buy’s shelves like other brands?
Will Ander, who works with Mara Devitt at McMillan Doolittle, says it could, but it would be a gamble.
“You can put a product in a store and hope the customer gets it,” he says. “If you’re there physically at the retail touch point you have the ability to influence that customer to market that customer, to educate that customer.”
And to sell to that customer. Ander says there’s something to be said for old fashioned bricks and mortar -- and human sales people.
In the European debt crisis, size matters
The bailout of Cyprus continues to send ripples throughout Europe. Other small member countries have been left feeling vulnerable and wondering whether they have as much influence and power within the union as they thought.
Take Luxembourg -- the tiny country, wedged between Belgium, France, and Germany. Nobody is forecasting that Luxembourg is about to follow Cyprus into insolvency, but the Cypriot debacle has focused attention on the size of Luxembourg’s banking sector.
"It is massive," says Raoul Ruparel of the Open Europe think tank. He says the banking sector is "22 times the size of the Luxembourg economy, much bigger proportionately than the financial sectors in Cyprus, Iceland or Ireland."
Luxembourg is believed to be harboring billions of euros from Germany. Ruparel says this is causing renewed irritation in Berlin; politicians and officials are asking whether a tax haven on this scale should be allowed to operate within the eurozone.
Plus, the Cypriot debacle has sent a chill wind through the small alpine state of Slovenia. Slovenian banks are in trouble. And government borrowing costs have rocketed in Slovenia. European officials say this country could be next in line for a bailout.
"We’re not as badly off as Italy, or Spain," says Saso Stanovnik, chief economist of the investment firm Alta Invest, "We are being punished for being small.”
The eurozone’s smallest country -- Malta -- feels even more beleaguered. This is another Mediterranean island laden with banks. But Maltese newspaper executive Anthony Manduca claims the comparison with Cyprus has been taken too far.
"We are both small islands. We both have an important financial services sector," Manduca says. "But that’s where it ends. And I think it’s not fair to link the two together at all."
But all these mini-states are linked by the same fear. They are all -- to varying degrees -- afraid that investors will pull their money out and that the rest of the eurozone will then bully them into higher taxes and spending cuts in return for help. That's because the European Central Bank has made it clear it can now use its unlimited resources to stop the eurozone collapsing.
That has made it -- theoretically -- possible for a small country to be ejected from the eurozone without the whole single currency unraveling. That makes some of the member states dispensible. The small countries in the eurozone are now feeling much smaller.




