Slicing deals at Best Purchase and other megastores
Posted by: in Companies Competitive StrategyFiled under: Consumer experience, Competitive strategy, Home Depot (HD), Ideal Purchase (BBY), Circuit City Stores (CC)
It might not occur to customers, but massive retailers are willing to negotiate prices. That would seem to make intuitive sense in a period when shoppers are a scarce as hen’s teeth.
According to The New York Times, “Shoppers are discovering an upside to the down economy. They are getting price breaks by reviving an age-old retail strategy: haggling.” The paper states this kind of transaction is now common place at Best Purchase (NYSE: BBY), Circuit City (NYSE: CC), and Home Depot (NYSE: HD).
There is a real danger to the practice. While it might keep customers in stores and get rid of inventory, the retailers are already faced with tight margins. Selling products at or near cost might not help huge stores. It might injured them by encouraging big portions of their customer bases to ask for much superior prices. By going from chain to chain, a smart buyer can work a price way down.
National chains might want to look at the math. Letting customers walk out the door may be better than driving a culture where everyone thinks he can get a deal.
Douglas A. McIntyre is an editor at 247wallst.com.
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