November 24, 2008
| by Richard M. Sherwin
If you thought the retail sales which surfaced around Halloween were impressive, then the real Black Friday should turn out to be one early Christmas and Hanukkah present. Shoppers will find $500 - $700 price cuts on new HDTV models and $300 - $400 off home theater components. You should also expect some surprise sales on the Wii, Playstation and Xbox in stores and on-line. Here’s some insight into the discounts being tossed around by retailers and manufacturers.
The Players & Game Plans
Fueled by the relative success of Oct. 31st’s early season sales and fired up by terrible financial news, bankrupt Circuit City will try to match prices with Best Buy. The two companies will also challenge Amazon’s expected biggest CE sales initiative ever by also offering discounted or free shipping on many big ticket items. Meanwhile Target will target arch rival WalMart with sticker stuffer discounts.
Regional giant PC Richard and Son mimicked the struggling auto makers by instituting “Employee Pricing for Everyone - You Pay What We Pay” advertising that started Saturday and is expected to last through the holidays.
Industry wags that have seen Bernie’s (in New England) Black Friday newspaper inserts were not surprised by price slashing. “They need to pull in customers anyway they can,” say one distributor who works with Bernie’s.” And they’ll be more competitive against Circuit City.
Other smaller, regional retailers like KISS stores in New York, Miami and L.A. already started selling major brands’ MP3 players for under $15, 42-inch plasma TVs for under $800, portable GPS systems for less than $120 and notebook computers for $500.
Many stores in New York, Los Angeles, Chicago and Boston will open as early as 4 a.m. on Friday while online sellers will be flashing minute-by-minute sales to counter the expected onslaught of shoppers to the malls.
According to industry analyst Len Wanger, a big buzz word to watch is “while supply lasts.”
Industry analyst Bob Orbach and other video game industry sources say that while the top three video game makers may not cut prices as much as other products, there’ll be plenty of product available. “Remember the nationwide shortages of Nintendo Wiis and Playstation 3’s? Well you’ll be able to find those devices almost anywhere this holiday season,” says Orbach.
And Electronic House’s pre-Black Friday survey of both regional and national CE and discount stores resulted in nary a store without an abundant supply of Wiis, PS3s and an over-supply of Xbox 360s.
“It is selling great at $199, but customers find out that they have to add another $200 in wireless and other accessories to match a PS3 or Wii and they back off a little,” says one unidentified sales manager at BJ’s.
Some general merchandise stores like Macy’s, Kohl’s, JC Penney and toy giant Toys-R-us, are using bait-and-take sales by offering Wii alternatives like Jakk’s Pacific UltiMotion and My Sports Gaming System for under $50 as a way to grab cash strapped buyers. In addition, these stores are also relying on second tier brands like Colby, Haier, Polaroid, and Memorex for other audio and video equipment to attract customers.
Richard Sherwin is a former syndicated technology columnist and TV/Radio analyst, who has also been a marketing executive with IBM, Philips, NBC and a chief advisor to several manufacturers and service providers.