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CE Retailers Plumbed Pricing Depths On Black Friday

11/27/2006 09:35:00 AM Eastern

New York – Rational pricing took a holiday this past weekend.

While Thanksgiving promotions have become a national tradition, with no category more competitive than consumer electronics, the breadth and depth of CE discounting was jaw dropping on Black Friday, even by industry standards.

No brand, whether tertiary or tier one, was immune, although Panasonic, through its 42W-inch HD plasma display, was perhaps the most prominent example. The TV, a highly-rated benchmark product, hit a low of $1,000 on Friday morning at Best Buy, down $1,500 from a minimum advertised price (MAP) of $2,500 just a few months ago.

The intensity of the discounting could be traced back to Wal-Mart, which publicly targeted electronics as a promotional battleground this holiday season and was the first to break MAP on the Panasonic plasma. Looking to avoid the fate of the top toy chains, which succumbed to similar tactics by Wal-Mart two years ago, Best Buy took the gloves off by pressuring vendors to drop MAP over Thanksgiving weekend, dealers told TWICE.

The result was a pricing pandemonium that featured such early bird doorbusters as:

  • Canon’s 7.1 megapixel ultra compact digital camera: $197 (Fry’s)

  • Olevia’s 23W-inch LCD-TV: $297 (ABC Warehouse)

  • Panasonic entry level mini DV camcorder: $150 (Circuit City)

  • Panasonic’s 50W-inch plasma HDTV: $1,700 (hhgregg)

 

The electronics dept. of a suburban N.J. Target was jammed at 6 a.m. on Black Friday morning.

Yet there was a method to the apparent madness, as many dealers generated overflow traffic and attached high-margin accessories to loss-leader purchases. Indeed, the average weekend spend was up 18.9 percent year-over-year to $360.15, according to a survey by the National Retail Federation (NRF) and BIGresearch, with more than 140 million shoppers hitting the stores during the three-day period. Roughly one third purchased CE products and computer-related accessories, while music, movie and video game software (plus books) tied apparel as the most-shopped category at 41.4 percent.

(Complete coverage of Black Friday sales activity will appear in the Dec. 4 issue of TWICE.)

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