Re: Astronomy vendors and their "sales"
- From: Too_Many_Tools <too_many_tools@xxxxxxxxx>
- Date: Tue, 24 Mar 2009 17:35:35 -0700 (PDT)
On Mar 2, 11:41 am, Too_Many_Tools <too_many_to...@xxxxxxxxx> wrote:
This story reminded me of astronomy vendors, their so called sales and
their excuses for insignificant discounts in a severe recession while
their sales continue to dry up.
No discount = No sales = Out of business
Looks like a repeat of the Post Comet Halley vendor loss is coming....
TMT
February 23, 2009 10:39 AM PST
Last days of Circuit City: Lousy bargains, rumpled salespeople
I remember when "liquidation" meant something. There was a small
electronics store in my area that was closing down a few years back.
Signs all over read "Liquidation Sale." In the store, I found prices
slashed considerably. Some good stuff was 75 percent off. It was a
fire sale, and it was fantastic. That was a going-out-of-business sale
done right. What Circuit City is doing now, though, I don't get.
The company is shutting down, as we all know. But I was still shocked
when I went into Circuit City this past weekend and found a store that
was a shadow of its former self. The signature red shirts on employees
were ditched in favor of jeans and sweatshirts; DVD sales racks that
were once barely browsed were overrun by customers who couldn't help
but dive in to the store's 50 percent off DVD sale. But the real
bargains that Circuit City claimed we all would love weren't so sexy
after all.
I need a new HDTV. Usually, I buy my HDTVs from Amazon.com because
I've found it has the best prices and delivery service. But since I
knew Circuit City was going out of business, I decided to make a trek
down there to see if there were any hidden gems at a good price. Signs
said the TVs were 30 percent off, and when I looked around, I realized
the inventory wasn't picked over, as I had feared. There were some
nice Sony LCDs on the shelves, as well as Panasonic plasmas.
I was drawn to the Panasonic TH-58pz800u, which was on sale for
approximately $2,600 at the store. I own the 50-inch model of that
plasma and couldn't be more pleased with its quality. So when I saw it
offered at such a discount, the wheels started turning and I was
thinking about how I was going to be able to fit it into the back of
my SUV.
But then I checked Amazon's price. To my surprise, Amazon was offering
the HDTV at an even more attractive price: $2,372.
So I decided to find one of the Circuit City salespeople to ask if
they matched pricing that online companies were offering. I searched
far and wide for their signature red shirt and could find just two
people wearing it. Thinking the company must have laid off some staff,
I went back to examining the HDTV, when a twenty-something guy dressed
in a hoodie, baggy jeans, sneakers, and a crooked Mets hat walked over
to me and asked if I needed help.
At first, I didn't realize he was an employee and I looked at him
without saying anything. Then he told me that he works at Circuit
City, he's just not required to wear his uniform anymore ("After all,
am I gonna get fired?") and that's why I didn't recognize him as a
salesperson.
So I asked him if the company matched pricing and showed him my
iPhone, which was displaying Amazon's price of the same Panasonic
plasma. His response was short and biting: "Nope. We don't do that
anymore."
You don't do that anymore? How is it possible that a company that
needs to liquidate its entire inventory won't sell a product to a
customer for $200 less? It's a guaranteed sale!
Of course, explaining that to this salesperson would have fallen on
deaf ears since he wasn't in a position to make any decisions and I
don't think he would have cared if he could. He's there until the end
of March--that's the deadline the employees have been given at this
store--and after that, he's on to bigger and better things. Why should
he care if Circuit City, a company that has laid him off, will be
getting my money or not?
For comparison's sake, I went to Best Buy across the street to see if
it had that same Panasonic plasma and to ask its salespeople if they
would match the Amazon price.
After just a few minutes of browsing, a Best Buy salesperson in the
signature blue shirt came up to me and asked if I needed help. When I
asked her if they would match pricing, she said, "Absolutely." In no
time, she asked her manager if they could match my price on the
Panasonic HDTV and he came over to assure me that they could and the
offer was on the table indefinitely--I didn't need to take it right
that second if I didn't want it.
In spite of the Circuit City going-out-of-business sale across the
street, the Best Buy was overrun with customers, the company's blue
shirts were everywhere, and people were rushing to the checkout lines.
Even in its dying days when it should be the price leader and the most
willing to sell products, Circuit City still doesn't "get" it.
Under the guise of "Everything Must Go!" sales, Circuit City's
liquidators are doing their best to feign value to squeeze every dime
out of customers just one last time. Maybe it works (the company
announced it has sold $1 billion in merchandise over the past month),
but I still think it's a sad state of affairs. Circuit City is still a
wrinkled mess. Meanwhile, Best Buy is as vital as ever.
Yet another story about retailers dropping prices...
Meanwhile astronomy manufacturers and vendors keep charging the same
prices as sales continue to drop.
A disconnect in reality?
It would seem so.
TMT
Are Low Prices Here to Stay?
By Greg T. Spielberg Greg T. Spielberg Tue Mar 24, 8:08 am ET
With shoppers shunning extravagance and merchants eager to sell
inventory, prices on many goods and services have plunged. Fancy flat-
panel TVs are marked to move, and flights between the coasts have
dipped below $120. Forget cell-phone billing; prepaid is in.
For businesses trying to coax consumers to spend, the recession has
brutalized profit margins. Still, despite the current profit
pressures, an even bigger worry looms: What if the low prices become
the norm? A shift in attitudes about consumption and frugality for
many Americans could mean businesses' loss of pricing power endures
long after the recession ends. "It's a whole lot easier for prices to
come down than for them to go up," says Eric Almquist, head of
consumer global insights at consulting firm Bain & Co.
No longer, experts say, should retailers expect the same sort of
robust profit margins as in the past, and they'll have to work harder
to keep brands relevant. With margins cut thin by increased
competition -- both on the Internet and globally -- retailers should
expect to woo customers through service and time savings. Even when
the economy rebounds, services will almost certainly become
increasingly important in a range of industries as big-ticket goods --
that once offered healthy margins -- become commoditized. "The world
of shopping is going to change more in the next two years than it has
in the past 100," says Paco Underhill, founder and CEO of Envirosell,
a New York-based research and consulting firm.
Baby Boomers Hit Hard
Consumer spending is also affected by the so-called "wealth effect."
Rising home values, healthy 401(k) balances, and profitable investment
portfolios all increase the sense of net worth. With those financial
markers greatly diminished, consumers aren't in the spending mood.
Especially dour are the baby boomers, who make up more than a quarter
of the American population and have been voracious consumers
throughout their lives. After finding their retirement savings
wanting, post-recession the boomers aren't likely to resume spending
at former levels, says Almquist. "My concern is that those pre-
retirement people are going to come out very conservative, and the
spending will not come back among that purchasing group," he says.
One significant change is already being realized in the current
recession: more pricing control for buyers. Consumers have proven
unwilling to spend as much on discretionary items such as vacations,
restaurants, and apparel. Where they do spend, they expect great deals
and are willing to expend great time and effort to find them. That, of
course, is largely due to the shift from the physical marketplace to
the Internet, opening up competition and providing comparative
information. "It is never going to go back," Underhill says of
traditional shopping models.
Communication and IT technology has changed the retail dynamic in
obvious ways, especially in the TV and PC industries. The average
selling price of PCs fell 14.3% in the fourth quarter of 2008. Down-
market competitors like Acer are challenging established companies
with lower-cost netbook PCs. Even Apple (NasdaqGS:AAPL - News), long a
world champion in commanding premium margins, cut the price of its
newest iMac desktop earlier this month. Sales of the iMac and iPod
both dropped 16% in February, according to NPD Group, a market
research firm in Port Washington, N.Y. "That's an industry where,
basically, people have been trained to expect prices to come down,"
Almquist says.
Banking on Intangibles
Like PC gear, electronics manufacturers are especially squeezed on
what they can charge in a downturn. Global television shipments
dropped 5% in the fourth quarter, to 57 million units, according to
market-research firm Display Source. And television sales fell 7%,
despite market-share gains for big-screen flat panels, 40 inches and
larger, and high-definition 1080p models. Both of those typically
command higher prices, demonstrating that even the most technically
advanced display has become a commodity item.
Brand differentiation and profit margins will revolve more tightly
around intangibles, not just the physical product. Amazon.com's
(NasdaqGS:AMZN - News) recent strong financial performance stems from
bargain prices and stellar customer reviews. Yet innovation can also
help to unlock better margins. Dell (NasdaqGS:DELL - News) is looking
for profit in its new $2,000 Adamo laptop, which hits the market on
Mar. 26. The 14.6mm-thick PC is promoted as being thinner than Apple's
MacBook Air.
Whenever the recession eases, Dell and other companies are hoping
profit margins will be far thicker than an Adamo. Unfortunately, the
evidence is scant that prices in many industries can regain their
former heft.
.
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