Archive for June, 2008
By Tom Polanski
Simply put, they’re fighting to stay relevant in the minds and pocket books of the American consumer. As Anthony Mirhaydari points out in the article below there are a number of reasons why Best Buy, despite the breathtaking revenue generated from the Federal stimulus package, could be in pain again soon. One alternative is, and it’s a drastic action for a company like Best Buy, would be to take a smaller margin for the sake of generating a higher volume of conversions. People are driven be price, no more so, than when the economy is turning down.
“Best Buy and Circuit City are reeling this week from the loss of their edge over discounters in the minds of high-definition television buyers — just as total industry sales are beginning to slow. Yesterday’s retail numbers showed that more consumers are trading down to price-focused shops for entertainment products, eschewing the better service and selection offered at specialty stores. Wal-Mart, the king of discounters, yesterday reported “extremely strong sales” of flat-panel TVs and home entertainment furniture.
By Tom Polanski
I underwent an extremely unusual purchasing process with a Best Buy located in Portland, Oregon. It could mean trouble for online electronics retailers.
I’ve been in the market for a replacement plasma display for the family room and since I’ve been a member of AVS Forum for over 5 years I decided to start my research there. Once I targeted the television I wanted I began to contact the forum sponsors regarding pricing and availability. For the sake of clarity, forum sponsors are companies, usually Mom and Pop stores located across the country, that place ads within AVS Forum. The assumption is that the publisher, AVS Forum, only allows reputable companies to place ads within their site and that these companies will give forum members the best prices and service. It’s a great relationship for AVS Forum, online electronics retailers and forum members.
In fact, I was given great prices by authorized dealers and would have been comfortable buying from any of them. I liked them all. I settled on a company in Seattle to make my purchase from. However I began to have second thoughts when I came across a thread regarding problems this new generation display was occasionally exhibiting. A great, award winning display but, again, there are reports of problems every now and then. It’s to be expected with a sophisticated piece of technology but worrisome, nonetheless.
By Tom Polanski
Recently, I came across some information about pricing. Researchers at Cornell University believe you’re better off pricing your products with an odd number than with an even number (for example, $39.71 vs. $40.00).
The researchers found that odd numbers cause buyers momentary confusion. Confused, people fall back on associations. And people associate odd numbers with discounts. Hence, odd numbers in a listed price equal a discount.
The Cornell report caused me to think about automatic triggers. This is a term I first came across in an enlightening book written by Robert Cialdini, “Influence: The Psychology of Persuasion”. A must read for all marketers. The premise is that we’re all inundated with too much information, that we suffer, to different degrees, from a form of cultural ADD and that we fall back on automatic responses.