Loss-Leader Laptops Go Back-to-School
so than in recent years, laptops have become the crucial traffic driver
this back-to-school season with selections significantly expanded and
prices drastically slashed.
is offering a limited selection of Compaq Presario notebooks – featuring
a 160 GB hard drive, CD and DVD drive, 3 GB memory and Windows Vista
pre-loaded – for $298. Wal-Mart’s stores not surprisingly have struggled
to keep the item in stock.
discount giant also has brought out a wide assortment of the Dell Inspiron
1545 laptop at $398 in multiple colors. Prices on the Acer 8-hour battery
laptop were cut by $50 to $548. Overall, Wal-Mart is carrying 40 percent
more laptops this B-T-S season, according to Bloomberg
know all students need solutions that integrate work, entertainment
and portability,” said Gary Severson, senior vice president of entertainment
for Wal-Mart’s U.S. division, in a statement. “Our increased assortment
delivers more targeted offerings from great brands at dramatically
$298-notebook offering edged out Best Buy’s earlier introduction of
a 15-inch Acer laptop with similar specifications for $299 – another item
that has been hard to keep stocked. Best Buy also is testing giving out
laptops for free – or discounting elite models to $399 or lower – if
consumers sign on to internet contracts. The move would be part of
an increased emphasis by the retailer into higher-margin services.
are absolutely looking at that and see that as in play,” chief executive
officer Brian Dunn told Bloomberg News. “There are so many places
people want a brand they can trust that will help them do things they
want to do.”
also has boosted its portable computer selection by 50 percent as part
of its B-T-S positioning.
report on Bloomberg
the discounted price tags on laptops will drive sales of accessories
such as external hard drives and bags that are up to three times more
profitable than computers. Bob O’Donnell, an analyst with research
firm IDC, said consumers last year bought 89 cents worth of accessories
for every $1 spent on PCs.
Buy in the same vein is hoping to make money by bundling laptop purchases
with Geek Squad services
hardware margins shrink as prices fall, service margins “will always
be higher,” Robert Stephens, founder and chief inspector of Geek Squad,
like the movie theater: They don’t make money on the tickets; they
make it on concessions.”
Questions: Are laptops the right loss-leader choice for this back-to-school
season? Is a mass chain such as Wal-Mart in a stronger or weaker position
to capture added margin points elsewhere than specialty chains (AKA
category killers) like Best Buy and Staples?
Increases Assortment of Affordable Laptops with Performance for Back
to School – Walmart
and Best Buy Launch Laptop Battle – Bloomberg
slash laptop prices to lure buyers to accessorize – Bloomberg