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Amazon Teams Up with Best Buy to Boost Physical Presence

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Amazon (AMZN - Free Report) recently clinched a partnership deal with the electronic retailer, Best Buy (BBY - Free Report) to expand its product offering by introducing voice automated smart TVs.

The idea behind the partnership is to integrate Amazon’s Fire TV with the smart TVs manufactured by Toshiba and Best Buy’s Insignia.

Fire TV offers streaming and subscription services for the web series and movies from Netflix, Prime Video, HBO, PlayStation Vue, Hulu and many more. Additionally, it is equipped with the voice assistant, Alexa, which enables customers to search TV shows, play music, switch inputs and control smart home devices through voice command.

Fire TV is compatible with Amazon’s smart speaker, Echo. Hence, we believe the customer base of the company will increase with the latest move of combining smart TVs with Fire TV. This will in turn, drive the top-line growth.

Notably, the shares of Amazon have returned 69.4% over a year, outperforming the industry’s rally of 38.4%.



 

Availability

Best Buy has decided to launch more than 10 4K and HD Fire TV Edition smart TVs during this summer. TVs will be available offline at Best Buy stores and online on the websites of both retailers.

Customers in the United States will able to buy new TVs starting this summer whereas in Canada, it will be available from the second half of the year.

Rising Competition

Amazon has strengthened its competitive position in the smart TV market against Roku (ROKU - Free Report) , a developer of various streaming players that enable customers to watch online streaming videos and movies on their TVs.

Shares of Roku plunged massively by 11.8% on Wednesday after the deal got announced. Additionally, Best Buy will no longer use Roku's operating system in Insignia TVs.

Notably, Best Buy has been posing stiff competition to Amazon for quite some time. The latest partnership lends Amazon an edge keeping the competition intact.

Strengthening Physical Presence

Amazon’s efforts on boosting its physical presence in the retail space is providing it with a competitive edge against the local stores who are already reeling under competitive pressure related to price and delivery from the company due to its online presence.

The latest move will provide a brick and mortar showroom to Amazon, which will help in providing a better hands-on experience to customers for its latest smart TV. This is likely to bring in more customers and will help in gaining momentum in the market.

Recently, the company strengthened its physical presence by opening its third bookstore in the Bay Area. Amazon began opening book stores in late 2015, the first one being in Seattle. The company has now 15 offline stores, while three are in work-in-progress status.

With the Whole Foods acquisition, the company started establishing its presence in the grocery market.

Zacks Rank & Another Stock to Consider

Currently, Amazon sports a Zacks Rank #1 (Strong Buy).

Investors interested in the same space can consider another top-ranked stock like Stamps.com (STMP - Free Report) . The stock flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Stamps.com is currently pegged at 15%.

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