We’re Not Playin’ – Amazon’s the Low Price Leader
By George Anderson
When it comes to video games, consumers will not find the lowest price at Wal-Mart or even Target. No, those retailers and Best Buy, Circuit City and Toys R Us all had higher prices (excluding shipping) than Amazon.com, according to PiperJaffray analyst Anthony Gikas.
Mr. Gikas looked at the aforementioned retailers as well as GameStop and Electronics Boutique in his firm’s semi-annual pricing survey.
According to a Reuters report, Mr. Gikas said Target’s average prices were 9.5 percent higher than Amazon’s. Toys R Us was nine percent higher, Wal-Mart 6.2 percent, Circuit City prices 5.4 percent, Electronics Boutigue 3.6 percent, GameStop 3.2 percent and Best Buy 2.7 percent.
If shipping costs were added in, assuming a minimum for free shipping wasn’t met at Amazon, Best Buy, GameStop and Electronics Boutigue had lower prices than Jeff Bezos and company.
Wal-Mart is currently the leader in the $7.3 billion video games business with a 23 percent market share. Gamestop and Electronics Boutigue may overtake Wal-Mart after a proposed merger between the two gaming retailers takes place. The combined market share of the companies is estimated to be 25 percent.
Moderator’s Comment: Prior to reading about the PiperJaffray research, would you have thought of any of the companies mentioned as low-price leaders
in the video game segment? What role does the perception of price play in the performance of retailers such as Wal-Mart and others covered by PiperJaffray? –
George Anderson – Moderator