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Unilateral Pricing A Good First Step

While I mentioned that changes in CE business model were overdue, I didn’t think the changes would be announced so rapidly.

I guess that’s what happens when two of the industry’s major buying groups, Nationwide Marketing Group and Brand Source, hold their winter meetings in the same city (Orlando) and on the same dates (Feb. 26 to 29).

The unilateral pricing changes and changes in channel management policies for TV and other CE categories have been in the works for months, discussed in vague terms by a variety of industry types before and during CES.

Samsung, Panasonic, Sony and LG provided some details on their policies in the past 48 hours as retailers met here in Florida, and are expected to be joined by other CE makers shortly.

In general the manufacturers are trying to hold the line on pricing, let brick and mortar retailers with selling floors sell their most profitable TV lines and other products, and stopping marketplace sales which encourage, in the words of many, “the race to the bottom.”

The general feeling among retailers of both groups meeting in Orlando is that all of this is good news.

Nationwide electronics merchandising VP Doug Schatz said he is “cautiously optimistic” about the plans and respected PRO Group member Bjorn Dybdahl of Bjorn’s Audio/Video commented at a Brand Source reception last night, “The key is how [vendors] will police these policies.”

The tricky part in all this is that PRO Group, as well as members of Nationwide and Brand Source and other retailers large and small also sell on the internet on their own sites and have their own marketplace deals in place with eBay, among others.

How vendors and retailers negotiate how protected SKUs may or may not be sold online will be a key to the success or failure of these policies.

As Dave Workman, executive director of PRO Group, said last night here in Orlando, “Internet sales are a fact of life. Everyone says [web retail sales] will evolve, and maybe these policy changes are part of that evolution.”