Best Buy Launches Deal of the Day
Richfield Minnesota’s electronics giant is using email, text messaging and social media to alert customers about the daily deals which last until midnight or until inventory is gone. Taking a cue from Groupon, Best Buy has brought the daily deal concept in-house and premiered its first deal on Monday, August 1. Each weekday, the retailer will use email, text messages, facebook and twitter to let subscribers know of the deal.
Best Buy’s first deal was a Coby Tablet offered for $119.99 – which was $80.00 off the current retail price of $199.99. Not bad…if you really want a COBY tablet (?) Other offers have included a refurbished 8Gb Ipod Touch and a free Nexus phone (with a 2 year activation.)
Best Buy continues to search for ways to combine its in-store pricing policy with heavy online competitive pressure. The company’s policy to match competitor’s prices will not apply to deal of the day. To me, that clearly means that Best Buy is concerned its deal of the day that will be beat by competitors.
Best Buy’s pricing policy has been in play for awhile. In March, company CEO Brian Dunn told Bloomberg that Best Buy would switch to an “everyday pricing” model—although further details weren’t provided and no developments or timeline have been released since. Mike Vitelli, executive vice president and co-head of Best Buy’s North America division, told Bloomberg News in February that consumers are becoming increasingly less patient as they wait for blockbuster sales and that demands have shifted for retailers’ lowest, bottom-line price.
What does this Deal of the Day program mean for an alleged “everyday low price” retailer?
- Confusion about executing a strategic pricing plan.
- A need to stay relevant among today’s bargain shoppers (without paying Groupon’s commission fee.)
- A desperate attempt to drive a low price image through low inventoried, high visibility items.
- All of the above.