Samsung's Retail Strategy: Get Into Apple's Face

In an experiment to see how much of the Apple magic can be re-created by sheer money and workforce, Samsung is creating a network of 1,400 Samsung Experience Shops inside Best Buy stores, complete with tech support desks staffed by Samsung employees. Although it's unclear whether Samsung will be helped more than Apple is hurt, what is clear is that Best Buy is pocketing a decent piece of change in exchange for the significant amount of floorspace that will now be dedicated to Samsung and only Samsung.

The first 900 of these Samsung ares are scheduled for roll-out by May, and the rest to follow by early summer, reports Mashable. Although "store openings don't really kick off until Monday, Samsung and Best Buy have been piloting a few stores with the Samsung Experience Shop over the last six weeks," said the report. "Samsung and Best Buy showed us the Samsung Experience Shop inside a Best Buy in Lewisville, Texas."

In various reports of the rollout, it's clear how much will be handled by Samsung employees as opposed to trained Best Buy associates. Bloomberg is reporting that the rollout is costing Samsung "hundreds of millions of dollars this year" in an attempt to direct a full frontal assault against Apple.

What Apple has done brilliantly is make its devices seem utterly intuitive, requiring little training. As programmers say often, the more intuitive and natural functionality is, the more sophisticated is the coding behind it. Effortless for the consumer means extreme effort for the programmer. Samsung has sharply increased its functionality to compete with Apple, which is good, but it also means that customers need to be retrained and that will be seen as a hassle for shoppers.

With more than a dozen new features added for the Galaxy phone alone last month, the training need is non-trivial, consultant Richard Doherty told Bloomberg. "You don't want to have some part-time salesman handling that sale when you've got a more complicated product line," Doherty said. "This will be an expansion from Samsungland to Samsung Country to push down Sony and LG and use their bucks and catalog to finally challenge Apple in size and number."

The biggest element of these mini-shops will be Samsung's answer to Apple's Genius Bar, which Samsung if calling the Smart Service Desk. (In the world of marketing word battles, would you really want to have your money on "smart" against "genius"? They couldn't have at least tried for Brilliant Service Desk? Or Mensa Tavern?) Mashable drilled into how the Smart Service Desk is supposed to work.

Although "the Smart Service desk can't handle direct repairs for broken screens, the Samsung employees can help direct customers to where they can get a screen replaced, receive help with warranty issues or process swap-outs (for those with Best Buy's Geek Squad protection). They'll also help customers install software updates on their phone, do backups or reinstall their phone OS. I asked a Samsung Experience Consultant what he would do if a customer came with a rooted phone that had a different ROM installed," the Mashable story said. "He said that while the ROM technically voids the warranty, he would be able to help the customer with the phone and restore the firmware to Samsung stock. If the phone was unable to boot or restore, he would have to send it to Samsung, which may decline to service the item at their discretion. Still, it's nice for Galaxy S owners to know that they have a place to go if their phone isn't working properly."

Will this all work? On the one hand, if anyone can beat Apple at its own game, to finance such an assault properly, it's likely Samsung. But as JCPenney is discovering, Apple's power does not come out of non-commission associates or technical specs. It's about design, the experience and, much more critically, the coolness factor. Through brilliant marketing and advertising, Apple has created an aura around iPhones and iPads that is simply not even closely justified by those devices' capabilities.

But they work well, they feel effortless, and Apple has made customers feel good and empowered by owning one. It's the classic example of marketing outdistancing engineering. Getting back to Samsung, merely re-creating the local help desks and matching the functionality misses the point of why people wait in long lines to pay far more money than they should to buy the latest version. That said, Apple can only maintain that allure for so long. Eventually, younger shoppers will see the iPhones as the phones their parents use and will crave the new best thing. Samsung simply wants to be in position when that day comes -- and maybe, just maybe, hasten that day's arrival just a bit.

For more:

- Bloomberg story
- New York Times story
- Mashable story

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