But in late 2009, as consumers showed their sensitivity to low prices, price wars returned to the retail landscape with Walmart and Amazon engaging in book and DVD price wars which eventually turned into an all out war to have the cheapest consumer electronics.
Mindshare of Consumer Electronic Purchases
A recent survey by consumer electronics site Retrevo found that even though Best Buy is number one in the consumer mindshare, it is losing to Walmart on price and Amazon is close behind Best Buy on selection in the minds of consumers.
These perceptions have chipped away at Best Buy's lead as the top destination for consumer electronics and may lead to an all out price war in 2010 as Amazon and Walmart look to capitalize on the consumer perception.
Perceived Lowest Price During the Holiday Season
"The consumer wins!" Andrew Eisner, the director of content at Retrevo, told WalletPop during a phone interview discussing the latest survey results.
Eisner compared the upcoming retail environment to the old gas price wars, telling us that current consumer behavior could lead to an HDTV price war in 2010 which will gradually spread out to other consumer electronics as Best Buy, Walmart and Amazon fight compete on new levels.
Perceived Best Selection During the Holiday Season
Why is the stage set for a price war in 2010 when consumers have already shown their sensitivity to price during the recession? Basically it boils down to the fact that more customers are willing to shop online and the continued hunt for the cheapest items, which provides Amazon and Walmart with new opportunities to expand their sales.
Essentially, explains Eisner, there is an increased acceptance of online purchases not only among older generations, but for more expensive purchases, in part, thanks to the great customer service from stores like Zappos and Amazon. Much to Eisner's surprise, and mine too, more consumers are willing to purchase items like HDTVs online, confident with the reviews from sites like Retrevo and Cheapism.
So, what does all this mean for consumers? Expect to see these retail giants competing very hard in 2010. Specifically we should see each of these giants trying to outdo the other in their specific strongsuit.
Walmart and Best Buy will try to match the customer service and perceived selection of Amazon, while Amazon and Best Buy will be forced to compete with the low prices of Walmart.
In the end, 2010 is shaping up to be a year of better selection, lower prices and more options for consumers looking to buy HDTVs and other consumer electronic devices.