Tuesday, November 28, 2006

A fast and furious roundup

TWICE: CE Retailers Plumbed Pricing Depths On Black Friday
New York – Rational pricing took a holiday this past weekend.
While Thanksgiving promotions have become a national tradition, with no category more competitive than consumer electronics, the breadth and depth of CE discounting was jaw dropping on Black Friday, even by industry standards.
No brand, whether tertiary or tier one, was immune, although Panasonic, through its 42W-inch HD plasma display, was perhaps the most prominent example. The TV, a highly-rated benchmark product, hit a low of $1,000 on Friday morning at Best Buy, down $1,500 from a minimum advertised price (MAP) of $2,500 just a few months ago.
The intensity of the discounting could be traced back to Wal-Mart, which publicly targeted electronics as a promotional battleground this holiday season and was the first to break MAP on the Panasonic plasma. Looking to avoid the fate of the top toy chains, which succumbed to similar tactics by Wal-Mart two years ago, Best Buy took the gloves off by pressuring vendors to drop MAP over Thanksgiving weekend, dealers told TWICE.

Oh look, retailers who don't understand how to add value drop their pants to buy business from consumers who are so barraged by marketing messages that they don't even know what to purchase anymore. Chiseling away the value of a product that can sell on its own benefits by flogging it on price is a death spiral, and the CE industry will come to regret it, even more than they already do. If you look at the mass market shoes and apparel industry, especially ladies' wear, shoppers have been so desensitized to sale prices that department and specialty stores can't get a bite, even on a collection for the new season without at least an apparent 30% markdown.

The Times: 'Dragon' sausages burnt by trade laws
A SPICY sausage known as the Welsh Dragon will have to be renamed after trading standards’ officers warned manufacturers that they could face prosecution because it does not contain dragon.
The sausages will now have to be labelled Welsh Dragon Pork Sausages to avoid any confusion among customers.

I can't tell you how much this disappoints me. Next on the Trading Standards Ministry's hit list: Spotted Dick.

Bloomberg: Nintendo Sells More Than 600,000 Wii Units in 8 Days (reported in Dealbreaker)
Somehow Nintendo forgot that the videogame market was supposed to be a two-horse race. While Sony and Microsoft focused exclusively on battering one and another, the grand dame of the industry dropped its latest offering a few weeks ago at a price well below the new PS3. And they're selling like crazy: 600,000 units in 8 days. And the company says it can churn out 250,000 per week, to meet demand. And the crazy part; it's making money on each one. Sony's much more expensive consoles are a loss leader for the company, which hopes to profit selling $80 games. Maybe it will once again become a two horse race before long.

Ah, another gold star for competent forecasting, manufacturing, logistics, and marketing. I don't know how Dealbreaker's Joe Wiesenthal concluded that the console biz was a "two-horse race," but there is a strong sentiment right now that Nintendo will be the big winner this Christmas because they understand these key principles of the gaming biz: make it fun, make it affordable, make enough of them. The fact that the Wii doesn't download movies and television, and doesn't cure cancer doesn't seem to keep gamers from parting with their cash.

CE Pro: Sony PlayStation 3 to Research Medical Maladies
PS3 owners will be able to aid Stanford University researchers in analyzing human protein structures, finding cures for disease and more.
Cure@PLAYSTATION 3 is scheduled to launch after the PS3 becomes available globally, which means at least not until March because of delays in the European launch.

The program apparently will work similarly to projects such as Cal-Berkeley's SETI@home, which used Internet-connected computers (including my old desktop before it died) to crunch massive amounts of data in the search for extra-terrestrial intelligence.

I suppose since everyting else Sony has tried this year hasn't worked out, they might as well give philanthropy a shot.

I'm done writing about Playstation3. I just can't keep up with the increasing surreality of the actual news, let alone put a snarky spin on it. If we aren't already in the Endgame for PS3, and maybe even Sony itself, then I can't imagine how this could get any weirder. I'm tired of beating this horse. Unless Playstations start transmogrifying into hungry alligators and eating their owners, I'm going to let this whole thing go.

Canadian Business: A Supercentre excursion
CB's senior correspondent Zena Olijnyk visits the new Wal-mart mega store in Stouffville, Ontario. Her article is a refreshing and interesting read because she sees the store with a shoppers eyes, as opposed to the jaded, cynical eyes of a career retail analyst. Her insight is valuable because she can see not only what Wal-mart does wrong (and nitpicking Wal-mart is a dangerous hobby, because you then risk under-estimating them), but more importantly what they are doing right. I won't spell it out, but see if you can spot the key business drivers that other merchants could learn from.

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Anonymous said...

Spotted dick! Alligators!! Sony philanthropy!!! Now is that not just a tad cynical of you? What substance are the people at Sony ingesting that they thought of this form of philanthropy? Is this meant to be social reparations for pyromaniac batteries?

Anonymous said...

I believe it was gonzo journalist Hunter S. Thompson who said, "When the going gets tough, the weird turn pro."

Reality is killing satire, along with retailing as we know and recognize it.

Price now is everything.

"It may be crap, and I may not be able to make it do what I want, but by Thor I got a screaming deal on it!" Thus spake Joe or Joelina Consumer the moment before their aftermarket GPS unit took control of their H3 Hummer and drove them off the highway into the path of a train loaded with 80 trillion metric tons of injection-molded action figures hot from the factories in Asia. And a nation weeps at the checkout counter. "Raincheck ma'am?!?"

"What's in a name? A rose by any other name would small as sweet." But then there would be that lawsuit brought to you by the people with the same mentality that makes it necessary to put disclaimers on animated films lest the public be duped into believeing that the movie was a documentary. "If you believe any of the characters portrayed in the film are real - seek professional help!"

Nintendo proves that successful business is always about three things. Focus. Focus. Focus.


'Nuff said!