BeatThat Founder: Holiday Discounts Unimpressive So Far

12/4/08Follow @wroush

Both traffic to online retailers and actual sales appear to have been up moderately on Cyber Monday, the Internet equivalent of last week’s Black Friday bricks-and-mortar shopping binge. But it wasn’t because of the big discounts allegedly being offered by e-retailers as a way to get recession-stung consumers to open their wallets, according to an analysis by David Parker, CEO of Cambridge, MA-based DigitalAdvisor.

In fact, the average discounts on popular consumer electronics products—as tabulated by BeatThat, a comparison shopping site owned by DigitalAdvisor—have been unexpectedly small this season, Parker reported in a post on his company’s blog yesterday.

I wrote about BeatThat back in August, shortly after the site emerged from beta testing. The site’s shtick is that it offers a $2 cash reward to any user who finds a product listed on the Web for less money than the lowest price currently listed on BeatThat. The reward creates “an incentive for the deals to keep coming in until, quite frankly, you just can’t find a better one,” Parker told me back then. His blog post yesterday, while certainly aimed at highlighting BeatThat’s ability to find the rare steep discount, also underscores the site’s function as a kind of barometer of the e-retailing scene.

“The press is full of articles and newscasts saying that retailers and manufacturers have slashed prices this holiday season,” Parker writes. “An analysis of the lowest prices on hundreds of popular consumer electronics products by BeatThat.com, however, reveals that prices have fallen on average a small amount—and that the biggest discounts are on specific models only.”

Parker’s post shares some specific numbers for the main product categories tracked at BeatThat. Between August 1 and November 30, the average percentage price drops were as follows:

GPS devices: 18.9%
MP3 Players: 14.1%
Camcorders: 12.6%
Digital Cameras: 11.2%
TVs: 6.9%
Printers: 5.6%
Average for all six Categories: 7.6%

Parker calls those numbers “interesting, but not what we at BeatThat expected, particularly given all the press lately about huge discounts. TVs only down 7 percent?”

Parker also dug through BeatThat’s data to see which categories retailers are discounting most often. He found that 32 percent of GPS devices were lowered in price by 25 percent or more between August 1 and November 30; 31 percent of MP3 players; 12 percent of digital cameras; 11 percent of printers; 5 percent of camcorders; and just 4 percent of TVs.

Black Friday and Cyber Monday didn’t bring any big improvements, Parker says. Between November 20 and November 30, only 17 percent of GPS devices and printers were marked down by 10 percent or more; only 8 percent of MP3 players, digital cameras and TVs; and only 3 percent of camcorders.

The basic message, according to Parker: the dominant strategy for electronics retailers this season has not been to offer widespread discounts, but to mark down and heavily advertise a few selected items as a way to get shoppers in the door (or onto the website). “Overall, prices were essentially flat,” Parker writes. “A classic case of the ‘squeaky wheel’—a small number of products that fell in price got a lot of attention.”

Wade Roush is Chief Correspondent and Editor At Large at Xconomy. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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