Retailing

Sue Stock's words to the wise on Black Friday's allure

Bargains beckon, but check the details

Staff WriterNovember 21, 2010 

  • If you're in the market for a big-screen TV, dealnews.com editor Dan de Grandpre says your best bet is to go big. According to de Grandpre:

    Prices of smaller TVs have been pretty static for the past few years. A 32-inch TV will be around $200 this year, a small drop from the $230 to $250 range of last year. But 55-inch TVs have seen big drops. Last year, the price for one was about $2,000. This year it is expected to be about $1,200, with certain deals going even lower than that.

    Those TVs are also less likely to be models where manufacturers skimp on the features, because TVs that size need certain technology to operate correctly.

    "That's really your sweet point in the market," he said.

Come Friday, the deal hunters swarming America's stores will find plenty of low prices.

Target will offer $3 appliances.

Walmart will sell a $198 laptop.

And Best Buy will sell a Wii bundle with extra accessories and two games for $169.99.

Only some of the deals shoppers will encounter this weekend are as amazing as they appear. And prices may have finally reached rock bottom.

After years of heavy discounting, retailers have squeezed costs out of the supply chain every way they can. They've pressured manufacturers and suppliers to finagle lower prices. They accept models with fewer bells and whistles that they can sell cheaper. They flat-out give up profits in favor of making the sale.

But to salvage the season, many are looking for new ways to entice shoppers without giving away the store.

Here's the back story on what you'll see on the shelves this weekend.

Doorbusters that bust

The no-name TV, the look-alike iPod, and the dirt-cheap laptop have become a staple of Black Friday ads. Most shoppers are now wary.

A couple of years ago, Bobby Carroll was wooed by a $350 bargain on a 32-inch TV.

"I've gone down the path of buying the most rock-bottom price in the past, and it stunk," said Carroll, who lives in Wendell and goes Black Friday shopping every year with his wife and son. "I got burned by that. I had to have the product replaced in six months."

That's not to say that all of the big "doorbuster" deals on Black Friday will be inferior in quality, said Dan de Grandpre, editor of deal website dealnews.com. But shoppers need to be aware of what they are buying and inspect the fine print closely. Retailers are crafty in the way they lower their prices each year, he said.

Manufacturers of items including big screen TVs, computers and GPS machines all make special models exclusively for holiday shopping and Black Friday weekend.

"They find ways to cut corners," he said. "For example, there's a thing called a HDMI port that you use to plug into the TV to get the HD signal. Most big TVs have three or four if you have a Blu-ray player and an Xbox that you want to have plugged in. One way they cut the costs out is they cut it down to one."

The name game

Retailers will also often offer their lowest prices on "off-brand products," meaning those that are not well-known household brands. That's another way to lower the cost.

Shoppers need to pay attention to the details, de Grandpre cautioned. If you can live with the scaled-back features or are OK with the off-brand model, it's a fine time to score a deal.

If you find a brand name product on sale, you should also make sure you know what you're buying, de Grandpre said.

"If it's an iPod Touch on Black Friday, it's still an iPod Touch," he said. "But it's typically going to be the cheapest iPod Touch - the one without a lot of storage."

Carroll said he is more careful now and has been happier with his deals since he started paying more attention.

Retailers are hoping that "all sense of value and quality tends to sort of leak out the ears and all it's about is cheap," said Carroll, 57. "Now I tend to be a little bit more scientific. I'll pull out my iPhone and go to Red Laser [a comparison shopping app] and see if there's a better price around."

Bundling and more

Suzanne Long of retail consulting firm SSA & Co. says that many retailers have gone as low as they can go.

"How do retailers maintain profitability?" she asks. "I think right now they don't. ... Black Friday's origins are really back in the '70s. I would argue it's actually Red Friday because retailers have lowered their prices so far."

Many retailers know they are not going to make money on some Black Friday deals.

"A lot of that is just all the competitors are doing the same thing," said Jeff Pearson, spokesman for appliance retailer hhgregg. "Obviously we want everybody to buy from us. But we believe that if we treat them right, they're going to come back time and time again. We're not looking at [Black Friday] as a one-time transaction."

In lieu of being able to lower prices much more, many are turning to other tactics.

Bundle deals where multiple items are put in one discounted package are becoming popular. Best Buy, for example, will be selling an Xbox 360 with three games for $199.99. Sears will sell a 55-inch Samsung 3-D TV that comes with a 3-D starter kit and a 3-D Blu-ray player for $2,199.99 (a savings, according to the company, of $1,806).

Bonus gift cards for spending at certain levels continue to grow in popularity. LL Bean is back with its $10 bonus gift card on any $50 purchase. And others, including Borders, Barnes & Noble, The Limited and Godiva have all jumped on board with similar offers. Target is even reportedly offering a doorbuster $10 gift card bonus for anyone spending $100 or more in the store from 4 a.m. to 10 a.m. Friday.

"What we're seeing more is shoppers saying, 'I'll buy it if it's new or different, but not if I already have two,'" said Candace Corlett, retail analyst with WSL Strategic Retail in New York. "When you don't have new and interesting, what do you do? ... We just saw what Walmart does in this situation. They add on free shipping. ... What will they do if prices are already as low as they can go? They'll add more things like free shipping and coupons and gift cards."

And when that isn't enough, what will they do next year?

"That's next year," Corlett said. "Nobody knows."

sue.stock@newsobserver.com or 919-829-4649

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