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HES' Ristow Sees 'Cautious Hope'

October 26, 2009 By Nancy Klosek

Jim Ristow, executive vice president of the Home Entertainment Source division of the Brand Source buying group, expressed “cautious hope” that his specialty dealer membership would fare well amid the commodity-level TV pricing battles that will scar the retail landscape this holiday season – if they used the tools the group was offering them.

  Among those tools are promotional product deals geared to driving foot traffic “before, during and after Black Friday,” and the group’s newly instituted Expert Warehouse Customer Service Portal, an online system that automates most dealings with the Warehouse, allowing members who buy through it to reduce payment cycles on such things as instant rebates from weeks and sometimes months to 15 days.

The Portal is just out of the beta-testing phase and will be fully ramped up by mid-December, he said.   “The industry is in the middle of a Best Buy/Amazon/Walmart war for commodity business,” he observed, in remarks during an annual “Q4 in 30 Minutes” conference call to the HES membership.

“We will have to fight for our business in Q4. But clients out there are looking for perceived value. Black Friday specials are meant to grab floor traffic, but these aren’t everyday prices. They’re just for hours, and for limited quantities.” A compilation of data from various industry sources that Ristow shared with the membership showed pricing of promotional pieces in key categories as they stand both now and in a projected a Black Friday marketplace. 

While his research revealed leader Blu-ray players on sale now at $128 dropping as low as a projected $49 on Black Friday, and even some Tier Three 50-inch plasma TVs now at $748 dipping to the $599 level, he noted that current best-selling box-store models have generally been priced well above leader models offered.

Despite the market tussle soon to come at the lowest rungs of flat-panel TV and Blu-ray player pricing, Ristow said, “The moral of the story for all of us is no different than traditional retail in that there are (advertised) pieces, but not all customers buy those pieces; in fact, most do not. That’s why no one should get whacked out about Black Friday.

Just because we advertise it and there not margin in it, doesn’t necessarily mean it’s the goods that are going to be sold. It’s just that it’s going to help drive foot traffic.

 

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