Best Buy Adds New Services

Who knew the digital revolution could be such a rush? Best Buy did — and it's selling more pricey gadgets and hook-up services than anybody.

The temperature outside is five degrees above zero. But that seems to have escaped the dozen shoppers waiting on a recent morning for Best Buy Co.'s latest concept store, in suburban Minneapolis, to open at 10 a.m. Inside, salesclerks in blue shirts and khakis scramble to finish restocking.

A three-story-high display of flat-screen TVs blares on the rear wall — an inviting tower of babble at the center of pricey multimedia gadgets. This is try-and-buy at its most tempting. Play with videogames. Burn a CD. Watch or, better yet, make movies. One interactive pod in the center of the 45,000-square-foot store offers a leather recliner with power assist ($1,299). Hit the remote and the 42-inch Zenith liquid-plasma flat-panel screen ($2,999) roars to life. Another button surfs the Net or downloads tunes from a PC ($1,349). The video resolution is as good as you'll find in a theater. Check out the four sets of Klipsch speakers ($1,886): A $500 woofer is cleverly concealed inside the chair's seat, earning it the nickname "butt kicker." Total price for the complete "digital life room": $15,419 — cables and service plans could add 20 percent or more. The displays, the wares, the bundled offerings — all part of Best Buy's latest attempt to separate your wallet from you.

The Maple Grove, Minn., store is one of a few dozen Best Buy outlets putting on the glitz. It's offering more of the latest in the growing acreage of really cool stuff that's now widely available — MP3 players, digital cameras, giant TVs, DVD burners, satellite notebooks and radios, wireless gizmos. People can't get enough of these fun devices, and those who've already bought them can't seem to upgrade fast enough. More and more toys are on the way, thanks to the constant innovation that makes them more powerful, faster, cheaper, smaller in many cases and better able to "talk" to each other. So overhyped, so overly long in coming, the digital revolution is finally here, — and Best Buy has become its mightiest foot soldier.

If successful, such company outlets will spread to its other 576 U.S. stores. Yes, the retailer that is best known for grab-and-go electronics, videogames and software at low prices is reinventing itself again — the fourth distinct incarnation in its 37-year history. This time the focus is on bundling high-end electronics with service and installation — without losing its low-price reputation. If it sounds lunatic, it is. "Nobody has been able to do this before," says Bradbury H. Anderson, the chain's 54-year-old chief executive. "If we can only figure out the puzzle." He's muddling through with the support of founder, friend and Chairman Richard M. Schulze, who hired Anderson as a stereo salesman in 1973 and gave him the top job in July 2002.

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