According to the research firm ShopperTrak, sales on Friday were down 1.8 percent from last year, which is the first dip since the recession hit in 2008. However, that still amounts to a staggering $11.2 billion in sales, and the drop wasn’t caused by Americans reeling in their spending. With retailers starting sales on Thanksgiving this year and extending deals through so-called Cyber Monday, the busiest shopping day of the year has been split into many pieces, and like a consumerism-crazed starfish, it’s now poised to respawn into a multi-day event.
I agree with her observation with one slight caveat. Black Friday is not only extending from Friday through Cyber Monday, but it is also spilling forward onto Thanksgiving Thursday and into the preceding Wednesday too. In other words, the shopping spree is going to start at around 5 pm the Wednesday before Thanksgiving and continue right on through Cyber Monday.
That’s an awfully long time to have a “1-day” sale. And since a LOT of tech gear is sold during that period of time and since a lot of the buying is now being done online, this developing phenomenon is well worth watching.
Best Buy has been running a commercial for the past few weeks where they are positioning themselves as THE place to buy a mobile phone. The commercial was very well done.
The commercial included many who invented recognizable aspects of the mobile phone experience. People like Philippe Kahn who created the camera phone. Or Ray Kurzweil touting speech and voice technologies he created. Each person goes on to say what they created in relation to the mobile phone. Then it ends with some Best Buy blue shirts saying the following:
We created a better way to buy a smart phone. Any phone, any carrier, and all of their plans, with lots of unbiased advice.
It is the last few words that I find the most interesting–with lots of unbiased advice. This insinuates that cell phone retailers should be accused of selling phones with biased advice. Perhaps not just bias advice but sales kickbacks from handset vendors as well incentivizing sales people in carrier stores to push one device over another. Not every vendor does this but it does happen. It can lead to overly zealous sales folks pushing devices on consumers they don’t actually want. I have actually witnessed this in action.
Last summer I was in a certain carriers store activating an iPad for their data network. I overheard a sales conversation between a woman in the store and a sales rep. She had mentioned several times that she was interested in the iPhone. During the process of the conversation the sales person talked her out of the iPhone to go with another device. I listened to her explain what her main uses were and they were fairly simple. Talk, text, email, web, and the device she was sold was fully capable. The only observation I made was that she did not seem overly technical. I was leaving the store at the same time as she was and I gave her my business card and asked if she wouldn’t mind emailing me in 30 days if she hadn’t exchanged the device. She emailed me a week later saying she exchanged it for the iPhone.
This is what I am referring to when I speak of the complexities and challenges of selling devices as retail. This is why I expect that over the next several, or more, years that we will see more companies duplicate Apple’s retail strategy and start opening more of their own direct to consumer outlets. Tim articulates in his column today that he expects Amazon, an online only retailer, to start employing their own retail strategy–which would truly signal this fundamental shift.
All of this just goes to demonstrate how the carrier sales channel is fundamentally broken. Best Buy is looking to solve this problem by carrying every device on every network. To some degree I almost wonder if Best Buy’s approach won’t lead to more challenges for consumers as there are faced with an overload of information and options. This is known as the consumer paradox of choice, which I have written about before.
Best Buy’s approach, believe it or not, will make handset vendors lives even more difficult. At least when sold through the carriers channel, these OEMs compete with a limited number of devices. Carriers don’t generally pick up every device an OEM makes but rather picks certain ones to fill gaps in their lineup. Competing in the sea of sameness which is the Android landscape, and will someday be the Windows phone landscape as well, will be even more difficult in an environment where the sea of sameness is multiplied. This is exactly what will happen in Best Buy as they sell every device, from every network.
And lastly is it even possible to be a sales person in retail and not have bias? We will see how this turns out as hopefully our friends at NPD will be able to track specifically what happens with sales of mobile phones and tablets at Best Buy. I, for the time being, will remain skeptical and convinced that the OEMs are better with their own retail presence. I outline that logic in this column by pointing out how similar the personal electronics market is to the automobile market. I remain convinced that the way we buy products is going to be drastically different in the not too distant future.
