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Holiday Promotions Seen As Very Aggressive

By TWICE Staff -- TWICE, 10/18/2010

Doretta Raffio, ADI: Most display providers continue to be in an overstock situation and are trying to move inventories by dropping prices. Price erosion will be an all-time high this year. As we get closer to the end of the season, I think they will resort to more drastic measures, resulting in even more aggressive price moves on Black Friday.

Warren Chaiken, Almo: From recent conversations with our consumer electronics manufacturers, it appears that Black Friday promotions will be more aggressive than last year with start dates in early November. We will also see a marked increase in the quantity and visibility of Black Friday promotions for appliances.

Rob Eby, D&H Distributing: Retailers are offering more aggressive promotions in order to make the fourth quarter happen, with pricing reductions that go much deeper than last year. The market can expect a bigger Black Friday than ever, based on the price points that are already showing themselves.

Fred Towns, New Age Electronics: Retailers will be moving up their holiday promotions to right after Halloween. Consumers are more educated about what they want and will be waiting on deals before making their holiday purchases. From what we understand, retailers will be offering compelling deals during the entire month of November before Black Friday to entice consumer to start shopping earlier.

Bill Stewart, Petra Industries: We think promotions will be very aggressive this year for categories like flat panel TVs, e-readers, gaming, headphones, computer and netbook accessories and any accessory for an Apple-branded item as retailers will try to lure early dealhunters to their stores.

We began conversations with our vendors months ago about Black Friday deals because we wanted to begin the fourth quarter ahead of our competition. Our Black Friday promotions started the first week of October with our “Today’s Margin Maker” feature on the front page of our website where we highlight everyday a new deal that has a profit potential for our customers.

Mark Gustavson, WYNIT: Manufacturer performance leading up to the fourth quarter will drive “promotional aggressiveness.” We expect suppliers with strong performance in the first three quarters of the year to be more conservative, unless their competition seems vulnerable, and an aggressive promotion can capture significant market-share. That being said, major retailers will continue to drive traffic through SKU-specific offers that could begin the weekend prior to Black Friday, and most likely last through Cyber Monday.

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• I don't blame distributors for making a 10 or 20% margin to pay their bills. And manufacturers have always been screwing over most of their independent dealers but now it is out in the open for all to see. But what really makes me angry is when buying groups push their mid to smaller dealers to adopt low price guarantees knowing that there is a huge advantage for larger buying group dealers and chain stores. A low price guarantee makes a small dealer a slave for the manufacturer, a slave for the buying group, and a slave to the market place. And when dealers are told "those chain stores are losing money on those" that is the oldest lie in the book. They aren't even losing money on the door busters. They use manufacturer MDF or advertising dollars to buy down the cost on the door buster deals. There is a difference between selling something below cost and selling something below what it costs you to do business and the second one is what is happening to chain stores on a lot of products they sell.

  
  Tony Cuchiara - 2011-28-11 20:06:38 EST
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