Re: Circuit City closing all stores -- watch for bargains coming soon
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Originally Posted by David Deeb
What I don't understand is this "game" to beat up retailers over pricing at other stores. I mean, I'm all about keeping retailers honest too, but if you like a price at one store, then go get it from the store that advertised it. Why get mad at the 2nd store? Go get it from the one who had the price you liked best.
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Good point.
Actually, I think the whole "price match" idea is problematic: It is something one store adopts to give itself a competitive advantage in advertising, but that advantage is very short-lived: Soon thereafter competitors will adopt a similar policy and the stores have done nothing more than hamstrung themselves.
The only way "price match" makes sense for business is if you are seeking to compete solely
on price by being a low-cost provider. You strip down your distribution and sales channel so that it has the lowest cost possible, because then you can rest assured that, as long as you're big enough, you can readily beat anyone else's price without hurting your own profitability. Basically, if you adopt a "price match" policy, you are committing to be the lowest-common denominator in the marketplace, for price and therefore also for service.
I'm not sure that it really benefits customers either, because we've seen the impact of the entrance of low-cost providers into market after market: The low-end prospers, of course. The high-end typically also remains intact -- a couple of suppliers will always be able to make profit by charging double for providing good customer service along with the products they sell. So what gets lost is the middle: Decent products, with decent service, at decent prices -- gone -- blown away because the typical mass-market patrons of that type of offering will merrily trade-off service for getting a lower price.
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Originally Posted by David Norman
Losing CC doesn't make Best Buy a monopoly. There are still plenty of Electronics dealers around though certainly one less National big box. Obviously depending on your location the choices are just different -- Target, Costco, Sams, Walmart, HH Gregg, Fry's, Meijer, Sears for price matches.
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As much as folk malign Circuit City, the people who worked there tended to have a greater interest in electronics than the typical retail sales worker. Therefore, a greater percentage of time, you'd end up with someone who actually might have known a little bit about what they were selling. Best Buy, too. Costco? Sam's? Wal-mart? Uh -- not quite as likely.
Losing Circuit City means substantially less competition in many areas -- opportunities for consumers to actually get some useful service with regard to the electronics they're interested in purchasing. Less competition isn't good for consumers.
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Originally Posted by David Norman
And the online choices aren't doing anything but gaining power -- Amazon, OneCall, Frys.com, NewEgg, etc. At some point Best Buy and the rest are going to have to do something to counter the Internet Sales drain or more CC's will follow.
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What can they possibly do? Best Buy's answer is to "join 'em". BestBuy.com is probably a major source of revenue for the company, and perhaps even a major source of sales for the stores, themselves. However, if we consumers want Best Buy there, with the vast array of electronics floor models set out for us to look at, touch, etc., then what advantage can Best Buy count on to justify keeping their b&m stores open, when they could just as well make the sale on BestBuy.com and save all the overhead of the store? There needs to be
more money to be made via the b&m channel to substantiate the higher costs. Where is that additional money?
We consumers have fostered the marketplace we're going to have to operate in, for good
or ill.
