Consumers prefer bargains on Black Friday
Retailers see double percentage point gains on budget sales
By Susanne Ault -- Video Business, 12/5/2008
DEC. 5 | The Black Friday weekend generated mixed DVD and Blu-ray Disc sales results, as finance-conscious consumers gravitated to bargain price points.
Retailers were mostly content with the frenetic shopping activity, considering the doom and gloom economic forecasting heading into the traditional holiday kick-off period. However, wholesaler VPD, airport-retailer InMotion Entertainment, Blockbuster franchisee outlets and electronics seller Crutchfield.com are among those who feel that many retailers’ revenue fell from the comparable period last year due to aggressively low pricing.
Online spending for Thanksgiving Day and Black Friday rose 2%, according to ComScore, with consumers spending 6% more than a year earlier on Thanksgiving Day ($288 million) and 1% more on Black Friday ($534 million).
Blu-ray hardware was in big demand. At Crutchfield, Blu-ray set-top players were the only non-TV items to crack into the retailer’s Top 10 products over the weekend. Amazon.com’s fourth best-selling electronic product on Black Friday was Sony’s BDP-S350 Blu-ray model. Comparison shopper site PriceGrabber.com said the BDP-S350 was the third most searched product on Black Friday, behind No. 1 Wii and No. 2 Ugg boots.
“Sales were not a disaster,” said Rick Souder, executive VP of merchandise at Crutchfield, “but given the fact that all were lower-priced product, or disproportionately lower-priced product and door-buster specials, I think [retailers hitting] profits was tough.”
Wal-Mart’s Magnavox $128 Blu-ray player was a steal. The most popular Sony and Samsung models were widely priced below $200, marking more than 30% savings from their September tags.
Amazon.com sold Samsung’s BD-P1500 player for $199, a $100 discount, and Best Buy cut the prices of Panasonic and LG Electronics BD players by $70.
Retailers also offered deals on videogame consoles. Kansas-based Blockbuster franchisee Major Video bundled Wii consoles with a 20-week free rental card for a $299 total package price.
Videogames proved popular, with Web traffic for toys and videogame sales up 73% on Black Friday. Microsoft reported that overall sales of its Xbox 360 console jumped 25% from a year earlier.
On the software side, stores noted that premium TV/film box sets were slow off shelves. But cheaper titles, such as InMotion’s two for $20 deal, proved the most attractive, with many retailers enjoying double percentage point gains for budget and used disc sales over last year, according to VPD.
“I think people are keeping a closer eye on their expenditures,” said Don Rood, VPD’s director of business development.
Wal-Mart and Meijer heavily promoted $2 DVD deals in ads leading up to the weekend. Best Buy offered promotions on about 20 Blu-ray titles including Paramount Home Entertainment’s Indiana Jones and the Kingdom of the Crystal Skull on Cyber Monday, and Barnes & Noble marked down prices of hundreds of DVD and Blu-ray discs by as much as 70%.
“We were actually disappointed by the numbers,” said Steve Torr, director of software purchasing and rental services at InMotion, which started its big sales on Wednesday to catch people flying to Thanksgiving destinations. “There were less people traveling, and people were shying away from the higher ticket items. The box sets didn’t do what we thought they would do. This was totally affected by the economy and people looking for bargains more than ever.”
At Newbury Comics, certain relatively high-priced sets such as The Sopranos full-series set ($399.98 SRP) and 300 limited collector’s edition ($49.98 SRP) did not jump off shelves. By Tuesday, Dec. 2, Newbury’s 28 stores had sold two Sopranos and zero 300 sets since their respective Nov. 11 and Nov. 18 street dates.
“With the amount of money it costs, and the fact that the Sopranos didn’t end on a high note, I don’t think people are going around saying, ‘I need this collector’s set,’” said Newbury buyer Ian Leshin.
There was dissenting opinion from certain studios and retailers who believe the Black Friday/Cyber Monday period was successful.
Sony Pictures Home Entertainment president David Bishop said he was impressed that the studio’s catalog revenue stayed flat versus the 2007 frame. Also, Sony’s Nov. 25 Blu-ray Hancock is the studio’s top-performing title yet in the format, selling 300,000 copies during its first six days on shelves, according to the studio.
Bishop believes Blu-ray software sales will expand into the first part of next year, as people buy content for their new players.
“Blu-ray as a technology is one of the top gift-giving items of the year, so that sets us up well for post-Christmas activity,” said Bishop. “People might buy a title or two with the machine, but after the player is opened, customers will buy more.”
Another studio noted that, in spite of slightly lower average retail prices, its own catalog revenue rose by double digit percentage points compared to the 2007 Black Friday weekend.
DVDEmpire.com’s first ‘Blu Friday’ promotion, in which the retailer heavily discounted Blu-ray product only as opposed to standard-definition titles, churned out triple the company’s average weekly sales in the high-def format. Some of its bestsellers were relatively reasonably priced titles from such indie suppliers as Echo Bridge Entertainment.
At Amazon, “DVDs and Blu-ray titles did very well over the Black Friday/Cyber Monday weekend,” spokeswoman Tammy Hovey said. “There were a number of great deals for customers to choose from, and customers were excited by the values they were able to get.”
Target spokesman Joshua Thomas was similarly upbeat, adding, “In general, Friday was a busy day for our stores across the country with heavy guest traffic in both the electronics and toy departments. Sales for Blu-ray titles are continuing to meet our expectations.”
Danny King contributed
