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In a sign that this holiday retail season may be as competitive as any in recent memory, consumer electronics behemoth Best Buy Co. (NYSE: BBY) will be delivering that new 52-inch LCD television and setting it up with all your equipment -- for free.
That alone will one-up merchants like Wal-Mart Stores Inc. (NYSE: WMT) and others who move mass merchandise only but offer zero support after that. Well, unless you need to return a defective item, that is. Best Buy's gambit here is a good one: free delivery and especially hookup of a new (and complicated) flat-panel television is a huge benefit over the competition. Will competitors follow?
To get the nicety from Best Buy, you'll have to purchase a television that's priced at least $999 -- so that cuts out all but the largest televisions -- where delivery makes sense anyway. Smaller television delivery and setup, economically, doesn't "work for us," according to Best Buy investor relations head Wade Bronson.
The conundrum is this: keep giving away services (with profit margins to match) to gain market share in products (which have margins that grow slimmer every quarter) -- or maintain the competitive status quo? This holiday season may shed some light on Best Buy's strategy as it relates to this.
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