Monday, January 29, 2007

Some retailers using value-added promotions, less discounting

Right after I made some snide comments about manufacturers and dealers prostituting themselves to gain market share, at the expense of profit, comes this piece:

TWICE: Dealers Promoting Interest-Free Payments Over Price For Super Bowl
New York — Following the margin drubbing they took during the holidays, retailers are focusing on interest-free promotions in their Super Bowl TV advertising campaigns rather than price.
Pricing on flat-panel and microdisplay sets has largely held to post-Black Friday levels, although the competition in extended payment plans is heating up. Best Buy took the lead earlier this month by repeating last year’s 36-month, no-interest offer on TV and home theater purchases totaling $999 or more, while Circuit City again promoted 24 months of interest-free payments on all TVs $499 and up.
Both chains are also guaranteeing delivery and installation before kickoff on all TVs 37W inches and higher that are purchased by Jan. 28 (Circuit City) or Jan. 30 (Best Buy).

The key takeaway here is that if you offer attractive terms (long, seemingly cheap financing) and make high-service commitments (delivering before the big game), then you've attached value to the sale, and don't need to drop your pants to make a deal.

Is there anybody here who hasn't gotten the message yet?


The best part of the article was the creative promotion run by a chain in Mississippi:

In other Super Bowl news, the Maloney brothers of Cowboy Maloney’s Electric City likely breathed a sigh of relief Sunday night when the Chicago Bears beat the New Orleans Saints for the NFC championship. The Mississippi brown- and white-goods chain had held a special promotion last August to commemorate the Saints holding training camp at Millsaps College, CEO Con Maloney’s alma mater in Jackson, Miss. The offer: buy a plasma, LCD or DLP TV and get a full refund (less tax) if New Orleans wins the Super Bowl.
A million dollars worth of TVs were sold during the promotion, Maloney told a sports columnist for The Advocate, a Baton Rouge, La., daily newspaper (although none of the 800 shoppers said their purchases were prompted by the free-TV offer). But the Maloney’s weren’t too worried. Despite the long odds, they bought insurance to cover half the amount and received vendor assurances to help with the rest.

How's that for generating buzz and excitement?

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