A guy walks into a bar and comes out with plans to hit up the nearest Best Buy store to get an ultrahigh-definition TV.
At least, that's the hope of the electronics retailer, which is betting that the next generation of TVs, known as 4K TVs, will be the next big thing and spur a big uptick in sales.
But first, consumers need to know the TVs exist. So Best Buy is taking its sales pitch outside of its stores to watering holes across the United States this fall to spread its gospel about what it sees as the future of televisions.
Brock White had never heard about ultrahigh definition TVs until he walked into Brit's Pub on Thursday night to watch the Vikings-Packers game. He was greeted at the door of the Minneapolis sports bar by a blue-shirted guy from Best Buy who ushered him into a side room where representatives from Samsung, Sony and LG were on hand to show off the technology that boasts four times the resolution of regular high-definition TVs.
White admired the depth and quality of the picture. Then he heard the price tag for the 65-inch model: $4,000. While other bargoers were turned off by that figure, he was still open to the idea of upgrading.
"Well, maybe as a Christmas gift," said the Fayetteville, Ark., resident who was in town for business.
In those 10 minutes, Best Buy managed to plant the seed for a possible sale — and a lucrative one at that.
The Richfield-based retailer could use a big hit or two. Under the leadership of CEO Hubert Joly, Best Buy has managed to boost profits by cutting costs. But overall sales have been slipping for 10 straight quarters — a trend the retailer expects to continue through the rest of this year despite the recent launch of the iPhone 6 amid a relative dry spell in new product innovation.
Joly is optimistic that 4K TVs can be a bright spot to help drive more sales.
But in recent months, he has acknowledged that the prices, which generally range from $1,400 to $10,000, are still out of reach for many.
"While we're very excited about the prospect for that category, the impact for this year will be limited because this is going to be a product category for early adopters, not for the average consumer," he told the Star Tribune in August.
Destination: Best Buy
As television prices continue to drop, Joly said he expects sales will accelerate next year. And when that happens, he added, Best Buy will be consumers' destination since it has rolled Samsung and Sony mini-stores that prominently display 4K TVs to more than half of its U.S. stores this year.
"We're going to be the place to see it," he said.
David Magee, an analyst with SunTrust Robinson Humphrey, noted that pricing on 4K TVs has already come down this year faster than some anticipated. So next year could be a big opportunity for Best Buy. Many other electronics innovations in recent years have been in new video game consoles and smartphones — categories that a lot of other retailers carry in addition to Best Buy.
"They don't own those products the way they own TVs," Magee said. For Best Buy, this is an opportunity to maximize its "showroom capability," he added.
Ultrahigh-definition TVs, he added, will be a game changer. It's not as big of a sea change as when people upgraded from tube to flat screens a decade ago. "But this is probably the best innovation we've seen for years in this business," Magee said.
After all, 3-D TVs turned out to be a bit of a bust. And smart TVs, which connect to the Internet, have done OK, but weren't transformative.
Predictions
Some analysts are more circumspect about how big of a deal 4K TVs will end up being.
"This is incremental — not monumental," said Stephen Baker, an analyst with the NPD Group. "It's not going to change the number of TVs sold in the U.S."
That number, by the way, dropped 3.4 percent in the past year and 1.2 percent the year before, according to his firm. After all, most U.S. households already have several TVs, and people are watching content on their tablets and smartphones.
"TVs aren't going anywhere," he added. "But in general, it's not a growth business."
Still, Baker noted that 4K TVs have addressed what consumers care about most in ways that other recent innovations haven't — a better picture.
But whether it's worth it to upgrade will be up to customers to decide. Consumer Reports recently advised its readers to not feel pressured to rush out to get a 4K TV.
"This isn't like the move from standard definition to high def, which was a huge jump in quality," the magazine said. "With 1080p and (ultrahigh definition), the difference can be difficult to detect."
And there's not a lot of 4K streaming content on the market yet, though Best Buy officials note that the newer TVs will improve the picture even if it's only in high definition.
Best Buy began carrying a few 4K TVs in its stores about a year ago and added many more models and sizes this year.
Despite the push, "Most consumers can't say what 4K or UHD stands for yet," said Scott Moore, Best Buy's senior vice president for marketing.
So that was one of the inspirations to educate consumers in their element by taking the technology straight to sports bars. Best Buy has scheduled about 30 such demonstrations this fall in major U.S. cities.
"With this technology, we believe seeing is believing," he said, adding that once people see it, they begin to realize that their current TV at home may not be up to snuff.
The technology competition
At Brit's Pub on Thursday night, servers walked around handing out free appetizers — Tandoori chicken on skewers and fish and chips in cones — to patrons who walked into a side room where Best Buy had set up the 4K demos.
As he inspected one of the models, 28-year-old Jonathan Truong of Minneapolis said he thought the picture looked "amazing." But he's not likely to shell out the money to get one anytime soon. After all, he doesn't watch much television these days other than sports. Other times, he watches Netflix on his computer.
But Molly Trudeau, 26, of Plymouth, was sold on 4K. She was impressed by the resolution on the screen and wasn't scared away by the hefty price tag since she considered it a long-term investment. But she wanted to wait to make her decision with her boyfriend, who wasn't with her that night.
"He's working — so we can buy the TV."
Kavita Kumar • 612-673-4113
