Best Buy hits the road

Best Buy Co. Inc. wants to trick out your ride.

The Richfield-based company, known mostly for selling computers and televisions, has been quietly but determinedly pushing its way into the automobile industry. Through its Geek Squad agents, the retailer hopes to outfit cars with GPS navigation, remote starters and a network of wireless devices that connect the driver to the Internet.

Earlier this month, Best Buy said it had formed a strategic alliance with Car Toys, the country's largest independent car audio and mobile electronics retailer, to target car dealerships, commercial fleets, and insurance companies.

Best Buy officials did not offer much detail on the partnership.

"The after-market car electronics space is a multi-billion dollar market that's evolving along with mobile technologies that enable people to stay connected to their vehicles," Best Buy Senior Vice President Lisa Farrell said in an e-mailed statement. "Best Buy is leveraging Car Toys' experience in servicing commercial customers, as well as our wealth of experience in specialized mobile electronics and installation."

As its core in-store consumer electronics business continues to slow, Best Buy has been searching for ways to boost revenue by offering services to both consumers and businesses. In addition to tech support, Geek Squad agents also perform home installations and energy audits. At Best Buy Mobile stores, employees not only sell tablets and smartphones but also help customers connect them to the Internet.

Last year, Best Buy paid $161 million to buy MindShift Technologies Inc., a provider of data storage and other IT services to small- to medium-sized businesses.

Best Buy is well familiar with that industry, having long catered to customers seeking to customize their vehicles with state-of-the-art audio equipment. But there are a few more reasons why automobiles look increasingly attractive to Best Buy.

Three years after the U.S. auto industry nearly collapsed, sales of cars and trucks are surging. Sales could exceed 14 million this year, up from last year's 12.8 million. Last year Americans bought 1.8 million pickups, an 11 percent increase over 2010, as the economy improved and businesses large and small began replacing their aging vehicles.

At the same time, people are becoming more interested in integrating mobile devices into their vehicles, analysts say. New technologies like mobile hot spots and cloud-based data centers allow drivers to video chat, find directions, and receive streaming digital content like movies and music.

"People obviously want or need to take these activities to the car," said Ben Arnold, director of industry analysis for NPD Group Inc., a market research firm based in Port Washington, N.Y.

Sales of products designed to integrate portable devices into vehicles totaled more than $170 million last year, according to a recent NPD report. That same study also noted that 84 percent of vehicle owners own portable devices and that 79 percent of that group uses them in the car.

The company is well aware of that. In 2010, Best Buy teamed up with Ford Motor Co. to promote the automaker's Sync voice-activated communications technology. Under the agreement, local Ford dealerships would sell and install Sync while Best Buy Mobile employees would educate drivers on how to use the system, connect headsets, and choose a compatible phone.

With the Car Toys alliance, Best Buy has moved beyond cheerleading. The retailer wants to do the same for cars as it has done for the home through its Geek Squad agents: installing and connecting devices to create one integrated system.

"It used to be just about audio," said Justin Cossette, general manager of a Best Buy store in Eden Prairie. "Now it's about hands-free [driving] and streaming content."

The Eden Prairie store hosts one of Best Buy's 1,000 auto installation bays around the country, a natural footprint for Best Buy and Car Toys to lure commercial customers. Already, the Eden Prairie location is making a big push to win work from car dealerships, store officials say.