I spent most of Friday and Saturday (busiest shopping weekend of the year) working on GeniusMarketingGroup.com and at local stores in Southern California.
I wasn't looking so much for a deal, but rather to see who has the best marketing approach for Christmas 2009. In doing so, I observed price, commercials, lines, signs, and staff.
In particular, I was very curious to see how Best Buy would perform this year and what approach they would take since this is their first Christmas without Circuit City.
In my opinion, Best Buy had two main options this year.
Option 1: Advertise extremely low prices, all items on sale, and huge doorbusters
Option 2: Hype up moderate prices, many items on sales, and a few big doorbusters
For 2009, I was hoping they would take Option 1, but rather they chose Option 2.
Granted, Option 2 brings in higher profits since they are taking less price reductions and will maintain a high customer count based on dedicated Best Buyers as well as previous Circuit Citiers and so, I understand their logic from that aspect.
However, if they went with Option 1 they would've created a better competitive dynamic. What do I mean by that? Well, Best Buy isn't the only one absorbing Circuit City's customer base; giants like Wal-Mart and Sears are making a push as well even though Best Buy is the clear favorite when it comes to technology. I know for fact that a sales reps in the Sears electronics department sold over $30,000.00. That's right, one rep = $30,000 in sales.
Had Best Buy pushed lower prices, Sears would not have seen the success they did on Black Friday nor would Wal-Mart.
Now consider Christmas 2010. If Best Buy had great prices in 2008 killing off Circuit City and had great prices in 2009 to limit other retail giants; wouldn't the clear choice be Best Buy for 2010?
That sounds like a monopoly to me.
Tim Femister
Chief Executive Officer
Genius Marketing Group
