Can gadget bargains be had before the holidays?
When Leslie Martinez walked into a Los Angeles-area Best Buy two weeks ago looking only for a 40-inch Sony Bravia LCD TV, she walked out with a heavily discounted Blu-ray Disc player, some Blu-ray movies, and half-priced HDTV accessories.
After seeing the TV she wanted at Costco, she turned to Best Buy to see if they could match the price. In the end, after a bit of negotiating with a salesman, the electronics retailer did much more than that.
"He made it almost impossible to walk away," Martinez said.
Retailers have offered bundled Blu-ray players with TVs before, but the way Martinez was able to haggle over the details sounds more like buying a car, not purchasing a TV at the biggest electronics retailer in the nation. And this is before the all-important late-year holiday sales rush, when the most attractive prices are normally found. It could be a sign that many of the best deals offered this holiday will be earlier, when retailers are still nervous that they won't be able to sell the products they ordered.
Though there's been a lot of "cautious optimism" regarding how consumers already hit hard by a downturned economy will respond when the holiday sales season really gets in gear, retailers now have a better idea of what to expect. The Consumer Electronics Association on Monday released its annual CE Holiday Purchase Patterns Study, and the news isn't great. The trade association expects just 3.5 percent growth in electronics shipments during the final quarter of the year compared with last year. It's so low that as Jim Barry, a CEA spokesman, said, "Any increase is a good thing."
And though when consumers were asked what items were on their wish lists for the holidays, 4 of the top 10 were CE devices like TVs, cell phones, and video game consoles. While that's encouraging for the industry, consumers are still tightening their gift budgets this year. Respondents to the CEA survey plan to spend $1,437 this holiday, which includes gifts, food, and decorations. But more importantly, it's $200 less than what consumers reported they would spend last year. That means something is getting cut out this year, and it's probably not food.
Holiday 2008 spending stats
3.5: Percent increase in 2008 CE shipments this holiday compared with last
$1,437: What consumers plan to spend on the 2008 holidays
$1,637: What consumers planned to spend on the 2007 holidays
28 percent: Portion of holiday budgets allocated to CE purchases
That could explain the great deal Martinez was able to find even before the traditional holiday shopping season. She'd seen the LCD TV model she wanted in Costco for $1,399, and the closest one she could find at Best Buy was $1,799. Armed with a photo of the price tag of the set seen at Costco, she asked a Best Buy salesman if he could match the price.
"He said, 'Since (ours is) a newer model, we can come down to $1,499 for you,'" Martinez recounted to CNET News. After consulting with her more tech-savvy brother, she told the Best Buy salesman she'd have to think about it since the price was still more than she expected to spend.
Clearly not wanting to lose the sale, the salesman decided to sweeten the deal. He threw in 20 percent, then 50 percent, off her accessories like an HDMI cable and surge protector. When Martinez still wasn't convinced, they went back and forth a few times before he added a Blu-ray Disc player--discounted from $399 to $199--and three Blu-ray movies.
The pressure to move products like TVs and Blu-ray players right now is only the latest sign that this holiday is not going to be particularly healthy. We've seen the signs coming since earlier this year, and retailers have been understandably nervous coming into the fall and winter. Those springtime stimulus checks from the government weren't just for fun--the retail economy has been sluggish for some time now.
"As we've gone through the summer, even up to Labor Day, back-to-school was relatively slow. (Retailers) made decisions that demand was likely to be reduced this holiday. A lot of retailers weren't as willing to stock up," said Steve Baker, an NPD Group analyst who follows consumer electronics retail.
The decisions for the TVs, PCs, cell phones, and GPS devices we see on shelves in November and December are made between February and March. Retailers decide on what products they want, and gauge which sizes, features, and colors they want to push. For Black Friday pricing specials (the day after Thanksgiving) those decisions must be communicated to vendors by July in order to ensure the correct number of volumes can be produced in time.
But this year, with so much uncertainty, retailers have been waiting until "the last possible moment" to place their orders, according to Steven Cook, vice president of strategy for Samsung.
Inventory just sitting on shelves is a concern for retailers because they don't want to get caught with an excess of gadgets, and some may prefer to set up contingency plans instead.
Rather than ordering a bunch of TVs up front, for instance, vendors can be conservative about how many they take, and strike an agreement with specific brands ahead of time to supply smaller, emergency volumes of their TVs later, if it appears that they're selling better than they thought.
According to Baker, "They're thinking 'I'd rather run out than have a ton leftover.'"
This could work out well for consumers. If you're being conservative with your budget like many people have said they will be--and retailers are clearly aware of this--they know that on certain products no matter how much they lower the price, that's not necessarily going to get you in the door.
For that reason, trying to wait out retailers on their prices by buying as late as possible--as we've seen for the past few holiday seasons--isn't a sure bet. Because they'd rather have too few TVs than too many, there will still be good deals to be had, as Martinez' Best Buy experience shows, but it looks to be earlier this year than usual.
Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur. E-mail Erica. 
On everything else, I would expect 500 GB external hard drives to be down to about 80 bucks, memory (DD2 and DDR3) down to 10 dollars per gigabyte, etc.
As of right now, the only Costco Sony 40" LCD I see on their website is $1,499, not $1,399, but even factoring that in, she could have gotten a better deal online. The more expensive Costco model is a Sony BRAVIA KDL-40W3000.
Here's my math:
At Best Buy, she got the TV down to $1,499, before tax. She got half off her HDMI cable and surge protector. Best Buy's cheapest HDMI cable is $59.99 for 6.5' and their cheapest surge protector is $13.99. Including the $199 Blu-ray player and 3 free movies, her total comes out to $1735 before tax. Los Angeles sales tax is 8.25% so her total would have been $1,878.14.
Online, she can get the Sony BRAVIA KDL-40W3000 for $1,390.99 after tax/shipping from J&R. From monoprice.com she can get a 6' HDMI cable for $9.50 and a surge protector for $4.16. After tax/shipping from monoprice.com, the total is $19.52. The article doesn't mention which Blu-ray player she got, but Best Buy offers the Panasonic DMP-BD30K for $399.99 on their website. You can get that from 6ave.com for $258.76 shipped. And online you can get Blu-ray movies for about an average of $27. So the final cost for buying everything online would come out to $1750.27 and she wouldn't have have left her house or dealt with haggling at Best Buy. And depending on which model of the 40" LCD she actually got, she may have been able to save a little more online.
When I bought my 50" Samsung, I saved $950 by buying it online, now THAT's worth the savings!
IMHO she got a great deal at Best Buy this time and paid a small premium for the convenience of having it now.
mrbofus, great explanation on your part. Also look for cables and accessories at newegg.com
To the reviewer above: Benflavored: circuit city issues 10% off coupons through US Mail change of address promos.
My advice if buying from a retail store is waiting until Christmas sales (december) & Superbowl sales (january), also you should try to get their 3yrs-no interest deals and don't get suckered into discounted game consoles, blu-ray players, surge protectors, hdmi cables, satellite TV offers, professional installation, extended warranties, etc. in the process.
Second, I work at Sears, and no, we do not haggle. We do guarantee to beat any local competitor's price, but if you bring in an ad for a "walmart exclusive" model with a lower contrast and fewer ports, I will happily show you our price on the real version of that tv. We sell most of our tvs at less than 10% markup, so if you are going to an electronics store that is marking down more than 5% while haggling, they were probably gouging to start with.
Third, instead of haggling at big box/department stores, just ask what the biggest deal of the week is. For example, this week at Sears I can sell a 46" Samsung A550 LCD TV for 1169.99 + Tax out the door, and that includes free next day home delivery and discounted accessories. If you try to haggle with me after that huge markdown, it is just offensive. Just shop for the best deal, don't try to be all "smooth." You aren't fooling anyone, especially not seasoned sales people.
PS. not to burst your bubble or anything, but bestbuy runs deals like discounted accessories, $199 blu-ray with hdtv, and 3 free blu-ray movies with blu-ray player all the time. He probably wasn't actually doing much adjustments, just giving you the current deals.
This isn't a "great deal"; it's typical BBY sales deceit.
The Blu-Ray offer has been available for over a YEAR?it's part of their "Complete Solution" package. Anyone would have received the same deal if he walked in knowing what BBY offered in the first place. I saw this happen all the time when I worked there; if a customer balked at a price, the salespeople kept "sweetening the deal" and pretending the package discount was unique to that sale.
The 50% discount is impressive and it's not part of the Complete Solution, but I'd like to know if they were Monster or Rocketfish. A typical Rocketfish HDMI cable sells for $60 retail and $5 employee price?and the discount is 5% above cost! If she received half off Monster, she got a good deal (regardless of whether or not Monster brand is necessary for HDMI).
By the way, we price matched discount retailers all the time, even though BBY officially doesn't.
I'm not trying to discredit the author: the woman in the story did receive a really good deal! In fact, I'd encourage anyone to take advantage of BBY's package discounts.
- by chrisp339 October 26, 2008 5:55 PM PDT
- About 8 years ago I worked for Circuit City for a few years. The best deals were always to be had in the first week or so of November. Sure, there were a loss leader or two for Thanksgiving, but the best deals seemed to be in early November with prices raising steadily until Xmas.
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(26 Comments)Also, with Circuit City stock at 40 cents a share, they might not be in business after Xmas, so one might be able to get some great deals in bankrupcy liquidation, but that would not likely occur until Quarter 2 next year.