Richfield-based electronics retailer Best Buy will test selling thermostats and other energy products.
Best Buy Co. Inc. plans to start selling home energy management products and services next month in what could be a significant new market for the Richfield-based consumer electronics giant.
Stores in three test markets -- Chicago, Houston and San Francisco -- will roll out smart thermostats and outlets, energy usage monitors, and possibly a home security/alarm system. Though Best Buy declined to disclose specifics, the retailer suggested it will devote prominent and sizable space to its new "Home Energy" section.
Three years ago, the company "decided we needed to do something to help consumers move into sustainability," said Kris Bowring, Best Buy's senior director/platform director for home energy management. "We began to recognize the technology movement that was about to begin. Understanding [energy use] could change energy consumption."
At first glance, home energy management might seem like a better fit for a utility or home improvement stores like Home Depot and Lowe's than a retailer known mostly for selling flat-panel televisions and video games. But Best Buy executives say they fully expect to be a major force in the market.
Speaking at Best Buy's recent annual energy-efficiency summit, CEO Brian Dunn said the retailer was uniquely suited for the role, given its history of "helping consumers navigate technology."
"We believe that there's not a space that technology isn't going to affect in consumers' lives," Dunn said. "And energy management is right over the next horizon .... We see this as a logical extension of our core business." In fact, Dunn argued, true sustainability will only occur when companies such as Best Buy take the lead.
"There's no Red Cross outside on the building anywhere," Dunn said. "This is a for-proft organization. The fact that we can wire this into for-profit models means that it will be sustainable and is the only really meaningful way we can assure we get done what we need to get done."
Kim Garretson, a former official in Best Buy's strategy and innovation department who was the company's liaison to venture capitalists, said a couple of factors work in Best Buy's favor.
The prices of technologies like smart thermostats have fallen dramatically, he said. Plus the rise of mobile devices like smartphones and tablets and related software means consumers can remotely monitor and control energy consumption in their homes.
With consumers increasingly worried about energy prices, Best Buy's strategy "seems like a worthy experiment," said Garretson, a founding partner of Minneapolis retail consulting firm Ovative/group. For Best Buy, the key is demonstrating a clear return on investment to consumers interested in purchasing these products, he said.
Bowring doesn't believe that will be a problem.
"Best Buy has a long, long history of demystifying technologies to help consumers see how a portfolio of products and services benefits their lives," he said.
For example, Geek Squad already performs home energy audits, Borwing said, and is a natural fit to market and install energy management products and services.
Bowring wouldn't yet disclose which products Best Buy will offer. The retailer already sells General Electric's Nucleus energy management system, which allows consumers to control thermostats and connected appliances.
Best Buy will test the concept in the three cities for at least six months, Bowring said. The retailer chose those markets because they have different climates, energy sources and power needs, he said.
Thomas Lee • 612-673-4113