Ottawa, Canada – A report by market research firm 360pi confirms that Amazon.com remains the low-price leader in consumer electronics, and it advises CE retailers to find other ways to compete against the e-tailer besides price.
Based on an analysis of more than 900 CE SKUs within Amazon’s assortment, the researchers found that the next lowest-priced retailer never came closer than about 2 percent to 3 percent above Amazon’s retails. This was despite short-term promotions and dynamic price changes by some merchants who dropped their average price by as much as 28 percent while others raised it by as much as 13 percent within the same time period.
The research firm interpreted this as “a sign of more aggressive pricing” by Amazon and advised CE retailers who challenge the e-tailer on price to find a different tack.
Amazon’s investments in price, as well as fulfillment, marketing and content, contributed to a $57 million first-quarter loss.
360pi also described CE as a “mature” e-commerce category.
“It is evident that Amazon’s commitment to maintaining their image of the low-price leader will continue to spread into additional categories,” noted 360pi marketing VP Jenn Markey. “What remains less clear is how brick- and-mortar retailers, specialty online pure plays, and other mass retailers will counter the drive to rock-bottom pricing.
“We continue to see a stratification of retailers into winners and laggards,” she continued. “Winners know it’s about delivering a unique value proposition to customers vs. price-matching Amazon, using such tactics as localized pricing and assortment, private label, and personalization.”