Posted by Abe Sauer on November 24, 2009 02:36 PM
Poor Best Buy. The way things have been going, the brand will soon be forced to rebrand to "Just Kinda' Good Buy."
As Black Friday approaches, Best Buy is being forced into a price war with retailers like Amazon and Wal-Mart after suffering through a 77% seasonal earnings drop in 2008. It already started with pre-Black Friday "early doorbuster" deals on hot items like HDTVs. And it's losing:
"In a price comparison of 50 overlapping non-TV products, which included Blu-ray Disc players, Pali Capital analyst Stacey Widlitz found that Wal-Mart and Amazon lowered retail prices 3% and 1.3%, respectively, while Best Buy increased prices 2.1% since a similar price comparison Nov. 2."
Forget that the brand is already smarting from an embarrassing bout with a now-seasonal war-on-Christmas-type "outrage" over a circular wishing potential Best Buy Muslim shoppers a Happy Eid al-Adha. Reminiscent of the brouhaha Gap recently faced when religious groups charged its holiday marketing wasn't Christmasy enough, Best Buy was forced to do the public contrition thing in the face of boycott threats. But... Happy Holidays!
In the current economy, consumers will be looking for lower prices more than ever. This is good for those brands that define themselves on lowest price. Best Buy does not.
If the brand drags itself into a holiday season price war, it may harm its positioning as a place where consumers can get advice from on-site branded-expert groups like the Geek Squad or Blue Shirts. Of course, if it doesn't play along, it may not survive to find out.