We've already heard that Best Buy is
aiming to spruce up its entire home theater department while undercutting Walmart, and now we're hearing that Panasonic individually is looking to stores more like Best Buy to sell its products. In a rather bizarre move, Panny is reportedly aiming to "tighten distribution" of its products by ditching dealers who add no value (and sell cheap) and sending more product to retailers who are willing to "implement Panasonic's stricter marketing policies and programs" (and sell high). Without getting caught up in the minutiae, what this essentially means is that it'll be harder for independently informed consumers to find Panny products on the cheap, but it'll be easier for the technologically illiterate to find Panny dealers surrounded by informed CSRs and information packets. It's possible that the company is simply trying to improve its image and appeal only to a certain class of people, but for those of us smart enough to do our own research beforehand, it looks like we'll be shopping other brands. Your loss, Panny.
Reader Comments (Page 1 of 1)
Brett @ Mar 19th 2009 8:00AM
There is no way Panasonic snubs Amazon who usually has very competitive prices and free shipping.
Conrad @ Mar 19th 2009 9:01AM
no way i'm shopping any other brands. Now that pioneer is gone. Pany is number 1 in terms of quality. I mean if you go to bestbuy, they usually have the lowest price around and almost all independant custom stores will match prices. So seriously suport your local economy. I think i like this move.
Michael N. Marcus @ Mar 19th 2009 9:13AM
This is just one of many rearrangements and reorganizations and restrategizing that Panny has been doing for decades.
Keeping the good merch away from the low-price whores sounds nice to electronics specialty stores with high-priced help, and has been tried before by Panny and others. Invariably, it falls apart when sales start to slide or a big dealer complains about the loss of a product line.
It's kind of like the Kremlin's old "five year plans."
"To maximize efficiency, from 1961 to 1966 the Soviet factories will make only red sneakers for the left foot in size 6. From 1967 to 1972, they will only make blue/right/10."
MIKE @ Mar 19th 2009 9:17AM
c'mon people, you want Panasonic to go the way of Pioneer??...then keep shopping at Wal-Mart..don't you know you get what you pay for, don't wanna spend a few extra buck on a Panny...get a Vizio. I for one support this move.
I read your site EVERYDAY, but I have to say Shame on you engadgethd for supporting the nickel and diming of this already fragile economy. American business is brick and mortar...NOT etailers..and with brick and mortar comes JOBS.
Loban @ Mar 19th 2009 9:32AM
Sorry guys, I'm all for supporting our economy, but I'm not overpaying by $1000 at Best Buy. I'll stick with newegg or amazon. People work at those companies too. The only people that work at Best Buy are ignorant salesman who mis-inform and mis-lead their customers.
I will however agree with Conrad in that I refuse to shop other brands. If Best Buy was a block from my house and only sold Samsung, and the closest Panasonic retailer was in Brazil, I would go to Brazil.
mike @ Mar 19th 2009 9:42AM
You won't overpay by $1000?? the average profit on a Panasonic these days is 10% to 12% factor in employees, shipping..and there is not much left.
Support your local economy NOT a warehouse e-tailer with 4 employees.
Ahh Capitalism
Loban @ Mar 19th 2009 9:59AM
Sorry, I work for a company that has EXTREMELY tight profit margins and we STILL have to compete with the competition and put up with our customers demanding that we lower our bill rates every year and we manage to get by.
I'm sorry. I can't look at a TV at Best buy for $2000 (before tax) and the same TV on Amazon for $1200 (no tax, free shipping) and not buy the one at Amazon. I'll support my own economy first.
Plus, B&M stores are evil. I refuse to shop at a store that peddles $180 Monster HDMI cables (got mine for 75 cents on Amazon) and misleads their customers so badly. Why should I care about them if they don't care about me?
Best Buy can go out of business for all I care. Then people will be forced to shop at places whos salesman are informed (if such a place exists). Or maybe, God forbid, they will have to do a little research themselves before plunking down 2 grand.
Cap BD @ Mar 19th 2009 9:53AM
I've been watching prices on the Panasonic sets at Best Buy and Amazon for a while, and I only see about a $2-300 price premium at Best Buy. And at least at my local Best Buy, they're pretty willing to go beyond the price match policy and "meet me halfway" on the price. Wal-mart's never really been an issue for me, because their selection is so much more limited and geared towards the cheapest price. I'll agree, there's a wildly differing amount of knowledge as far as employees go, but I like being able to see the item first, and have a place that's easy to bring it back if it fails or is defective out of the box.
DEEZNUTZ @ Mar 19th 2009 9:55AM
And watch Best Buy continue to stab you in the back by having the majority of their "sales" staff keep telling unknowledgeable customers that plasmas burn-in and have too much glare, but LCD's are pretty and supernova bright. Oooohs and Ahhhs ensue, and the LCD's will continue to flow out of BB while the pannys sit there surrounded by pretty laminated marketing fact sheets and brochures.
And it's not that I don't agree with Panny about having their product compete against inferior products in Walmart that are selling for much cheaper. It's a tough market to play in right now, and even tougher when you clearly make a better, higher quality product, and want to make a decent profit on your effort.
While this may not be possible with Walmart, I do think they can achieve this with e-tailers and it would not be a smart move to cut them out of the dist. channel.
Jason @ Mar 19th 2009 10:11AM
+1 to conrad and mike and -2 to Loban and the doosh who wrote this article. e-tailers sell cheap because the only thing they provide is a low price.
If your TV breaks ... too bad, call the manufacturer.
If it's damaged in shipping ... it's between you and UPS.
If you can't figure out how to work it ... read the manual.
There's something to be said for customer service and accountability. When your purchases come from a store, you can go back if you need help. When they come from the interweb, you're on your own.
And let's not forget about sales tax. What do you think pays for roads and schools and the fire department? Yep ... sales tax is a big part of those things. It's only a matter of time before these states start charging sales tax on everything sold in the state regardless of where it's shipped.
Loban @ Mar 19th 2009 10:59AM
Haven't dealt with Best Buy's customer service in a while have you? Or for that matter, Amazon or Newegg's customer service.
Best Buy doesn't give two $h!ts about you or your satisfaction. They care about their profits and peddling their useless extended warranties. They overcharge for everything. Their Geek Squad will charge an unsuspecting customer $300 to connect a loose IDE cable!!! Is that what you call customer service and accountability?
Meanwhile, Newegg's and Amazon's customer service is AMAZING. If you actually call them up on the phone (I know, it sounds crazy), they will do everything they can to fix your problem, without screwing themselves over in the process. They have return and exchange policies just like anywhere else, and the return shipping is usually free. I buy all my electronics online and have for over a decade and have rarely had an issue, and the times I have, it's been solved quickly and easily.
Wake up people. B&M stores are businesses just like anywhere else, they're in it for the profit, and nothing else. They don't care about you (some local places might, but it's rare these days). Once they make the sale, you're nothing to them. They will say anything to get you to buy their crap. There is a reason Samsung sells like crazy at Best Buy, and it's not because they're the best. It's because that's what Best Buy pushes.
At least with e-tailers, I'm getting a good price without the hassle of putting up with all the bullcrap. The world and economy is changing, get used to it.
Oh, and if e-tailers want to start charging me sales tax (some already do), I'm okay with that. I never said I wasn't, but if I can get away with not paying it, I'm gonna do it.
Shawn Parr @ Mar 19th 2009 12:04PM
In December of 2007 I bought an HDTV through Amazon.
In April it had a failure, and it took forever to get it fixed. In late May I called Amazon to let them know I was planning on using my Credit Card's insurance policy, and I wasn't sure if they would get dinged at all due to the CC's policies.
A manager from Amazon offered to buy back the TV for the original price I paid for it.
A couple days after that the TV manufacturer finally stepped up and replaced the TV with a new model, so I didn't have to take Amazon up on their offer. But they still offered it. How many Brick and Mortar stores, especially a Best Buy type, would give you a full refund on a TV after 6 months?
ap99 @ Mar 19th 2009 10:19AM
Folks,
I guarantee Panasonic is NOT aiming at e-tailiers such as Amazon. They have excellent pricing. They are aiming at rogue sites that can't guarantee their products and in turn make Panasonic look bad.
Wow this author probably cried in his beer last night while watching TV on his 120HZ Vizio that only maintains 300 lines of resolution when motion is introduced.
that1guypictures @ Mar 19th 2009 10:54AM
I work for Best Buy. Just because you have had a bad experience with customer service doesn't mean that all Best Buy employees believe in peddling $180 monster cables or are misinformed. I take pride in the research I do on this website and many others, so that I can recommend what I THINK is right for the customer, not what Best Buy does. Also, Best Buy doesn't mark up TV's as much as you think they do. I agree they get a little carried away when items aren't on sale, but typically a Brick and mortar store has to cover it's overhead and employees. I don't understand how anyone can say they think a store should go out of business. There are people like me who can only make ends meet because of my job there, and I feel like it is very rude and insensitive to say that you think that close to 100,000 people should lose their jobs because CEO's make some stupid decisions that we have to carry out. Not everyone who works at Best Buy is an idiot, and not every store is a bad one.
So...your millage may vary. Circuit City going away was bad enough, I knew close to 20 people who worked for them that are now looking for jobs. Some of them with families to support! In response to the article though, Panasonic's rep told me that all this means is they are going to ship to Brick-and-Mortar stores FIRST, while it may be harder to find them online, since they feel that too much competition ends up knocking down the prices to the point of un-profitability. Basically they are going to be more selective about which retailers they sell too. (In other words Amazon and Crutchfield will still carry the Televisions, but maybe not newegg or butterfly photo, and so on.) They are also working to have retailers/e-tailers send back returned/damaged/refurbished units back to the factory so that they can be sold on their own website at a set price instead of letting the store take the financial hit.
I think it's all very smart. Panasonic is the ONLY company who sends a rep to our Best Buy consistently. He's usually in 2 times a week. I've never even met the Sony and Samsung reps, and the LG rep doesn't even know how to change the settings on the TV's or turn the Demo mode off. I applaud Panasonic for working to educate the consumer, they want to talk with the customer face to face (which means they have to sell at less locations) so that they can be hands on in explaining the benefits of their excellent technologies, because ultimately it will result in less customer returns/problems. Most customers I work with still don't even understand that buying an HDTV doesn't give you an HD signal on everything you watch, as ridiculous as that sounds!
Loban @ Mar 19th 2009 11:07AM
I apologize for sounding like such a jerk. I was just trying to explain my reasoning. I wasn't thinking about the employees or their livelihood, that wasn't the subject of my discussion. It just angers me when I see friends and family, who don't know any better, coming out of B&M stores COMPLETELY misinformed and having overpaid, sometimes drastically.
Again, I apologize. I just see no need to shop at a physical store. I guess some people do.
I will say this though. If the price of online vs. a store is close to one another, I will buy it at the store for all the reasons everyone has stated. Buy I am not going to overpay by hundreds of dollars just to shop in a local store.
minimalist @ Mar 20th 2009 12:22AM
The bad experiences that people so often have with Big Box stores makes it hard to feel sorry for them, in spite of the real people who work for them who are affected by their failure. But isn't this just the logical extension of the same impulse that allowed big boxes to kill off local dealers? Big box chains killed the local retailer and e-tailers will kill the big box chain It's like capitalism eating its own tail.
The really hard question people need to ask is what happens when there is nothing left but our national obsession with the lowest possible price and outsourced warehouses manned with robots that fulfill orders and third world call centers?
Andy Sullivan @ Mar 19th 2009 11:59AM
You really hit one nail smack on the head for me Loban. It's when friends who are very aware of my knowledge about home entertainment equipment (sorry, sounds terrible) continue to go out and spend too much on poor choices of equipment. Then ask me what I think of their purchase. I don't hesitate to tell them the truth.
THXcertified @ Mar 19th 2009 11:36AM
Heaven forbid Panasonic wants to make a profit along with its partners. R&D ain't cheap and sustaining reasonable value in consumer products is good for all. People who whore out products for a quick sale is not. This post has lame commentarty and is not needed.
sja @ Mar 19th 2009 11:46AM
Exactly what THX said ^^^^
Smalz @ Mar 19th 2009 12:27PM
Thank you that1guypictures!. I also work for Best Buy in the Magnolia section and cannot believe what i am reading in these comments. I wonder if any of you own your own business be it be big or small. If you do, what is the overall goal? TO MAKE MONEY! You are not going to pay for products wholesale and then sell those same products in your store for LESS than you paid for them, and that does not even include factoring in your overhead cost( employees and other misc bills) I agree with my fellow employee that not all employees at Best Buy are misinformed sales reps and I for one do a lot of research to properly educate my customers and have them make their own decision. I have never or will never make a customer spend $4500 on a tv when a $1500 will do them just fine or force them to pay for overpriced cables ( Yes Monster Cables are way over priced!). And please do not assume that there is that much markup on these tv these days, if i can help a customer out with a price, while still making a little bit of money, i will. But i will not put my job or my companies future in jeopardy and sell products at a loss and end up like so many other companies like Tweeter, Sound Advice and Circuit City.
minimalist @ Mar 21st 2009 1:18AM
"I also work for Best Buy in the Magnolia section and cannot believe what i am reading in these comments. I wonder if any of you own your own business be it be big or small. If you do, what is the overall goal? TO MAKE MONEY! You are not going to pay for products wholesale and then sell those same products in your store for LESS than you paid for them..."
Um, isn't this exactly how the big box stores rose to prominence? Sell certain items as loss leaders (DVD's and CD's) so that people come into the store and spend lots of money on higher margin items? (cables, accessories and extended warranties).
John Nemesh @ Mar 19th 2009 1:24PM
The thing most consumers dont get is that if NO ONE makes money selling a product, that product will go away! Prices for a/v gear in general, and flat panels in specific, have been in free fall for the past decade. Look at the results!
Yes, you can go to Wal-Mart or Best Buy and get a flat panel for under $1000. Not to knock employees of either company, but my experience is that you will NOT speak to a knowledgeable sales person who truly understands the technology. You will be guided to whatever has the best "spiff" (or, in laymans terms, kickback) or what the company has directed the salesmen to sell that particular week.
You can NOT go to Good Guys, Ultimate Electronics, Tweeter, or any number of other stores. In general, the "mid-fi" guys are gone for good. Want a store better than Best Buy but not interested in the high end specialty stores? Tough, they are all gone.
Want to buy a Fujitsu, Pioneer, or Philips flat screen? (REAL Philips, not Funai re-badges!) Too bad, shrinking margins made it unprofitable for them to even try to compete with a quality set.
As American consumers, we continue to contine to shop purely based on price, thinking that we are SO smart saving a buck. We SAY we want a quality product. We SAY we want our stuff to last. We SAY that...but then we go buy a Vizio, or a Funai (the "new" Philips/Magnavox in North America), or a Poloroid (for all thats good and holy, WHY?). We SAY we want service...then buy online from "Joeshdtvshack.com".
Then, we hear of the indignation of the poor victimized consumer. "Why can't I get my set serviced locally?" "Why do I have to ship my TV to get it fixed?" "I can't believe my set only lasted 2 years!" "I was never told about that feature" "I never was able to work that @#$@ piece of equipment!" "What do you mean its not covered under warranty? What do you mean I didn't buy from an authorized dealer?" etc.
Sure, some of us are knowlegable enough to make our own choices, install them ourselves and have good results. People such as us are in the VAST MINORITY of consumers! In this industry, having a professional that can not only sell you the gear, but more importantly, INSTALL it and INTEGRATE it with your other electronics is essential for most of the general public.
There are still PLENTY of independant stores and installers that you can shop with in your area. These professionals can do much more for you than a Best Buy will EVER be capable of! However, for these companies to survive, they do need to make money! (What a concept!) A customer shopping for a TV should not be offended when asked to pay retail, or think they are being cheated. A retail price insures that not only the manufacturer, but the person RESPONSIBLE for installing and maintaing your system can make enough money to stay in business. This is NOT gouging the client...this is good business.
Ask a Circuit City customer now how he feels about his purchase. Does he think the money he saved was worth the downfall of the entire company? Deminishing margins meant that the company couldn't keep its highly skilled, higher paid employees. This in turn meant that customer service declined. This lead to a snowball effect that eventually shuttered all of its stores.
A typical installer or small retailer needs to make 25%-30% MINIMUM to stay afloat. That is not to say that he won't sell at TV at 5% margin (all too common) to make a sale, but he will have to make it up with better margins on audio gear and on labor.
In return, the customer should expect better knowledge, service, installation, and SUPPORT AFTER THE SALE. The last is critical. If you are inviting your buds over to watch the ball game, and your system dies the day before the big game, a good local "A/V guy" will come to your rescue far more readily than a big box store ever will.
THESE are the dealers that Panasonic wants to help. The ones that will educate customers and promote their products based on their merits, NOT just the cheapest price.
The Panasonic dealers who are nothing more than internet clerks, the ones that only compete based on price, are the ones who will be cut off. Panasonic doesn't want to be just a commodity product. They want to support the dealers who will sustain their company long term. The internet dealers are fly-by-night, here today gone tomorrow. They do not instill brand loyalty into their customers, they just sell the customer whatever is in stock and cheap.
I submit that the entire marketplace will be better off without these dealers. Even if we end up paying a few dollars more for that flat panel.
DEEZNUTZ @ Mar 19th 2009 1:51PM
Great comment.
Loban @ Mar 19th 2009 3:30PM
I still don't think e-tailers should be cut out of the deal though. Those consumers that do shop at places like Amazon or Newegg (like me) already have the knowledge on the product they're purchasing. We don't need the "knowledge, service, installation, and SUPPORT AFTER THE SALE" and we don't want to pay for it. If something breaks, I want to send it back with no hassle, that's the only service "after the sale" I need. If something isn't connected right, I'll fix it. I just want the product, that's it. It's sort of like getting service from an ISP. I just want connection to the freaking internet, I don't want 50 e-mails addresses or any of the other worthless perks that comes with it. I just want the product at the lowest price. I don't need the extra fluff meant to oooh and aaah the typical ignorant consumer.
Maybe it's just me, but I rarely call upon the service of any retailer or e-tailer other than their ability to give the damn product at the lowest price and leave me alone. And I don't need to support your staff or salesman or advertising or heating and lighting bills to keep your B&M store going when I just want the product. I don't need your delivery or in-home setup. I don't need your extended warranties. If fact, I don't even want to drag my butt to the store in the first place. I want to buy a TV in my underwear at my computer. If I could get a TV direct from Panasonic without paying for all the middle man stuff, I would. But I can't, so Newegg is the next best thing.
glenn s @ Mar 19th 2009 1:53PM
I think it is pretty funny when people say that they are pro capitalism, and slam e-tailers because they undercut the brick and mortar competition. That IS capitalism. If you don't like it, then perhaps you would like a side of government regulation with that plate full of Freedman economics? You can't have it both ways. If you lament the loss of full service a/v retailers then that is just too bad for you. They are not actually there to serve your needs. They are there to make money. And if they can no longer make money in a free unregulated economy, then they will go out of business. That is the market forces at work. Nice, huh?
dreamscape86 @ Mar 19th 2009 5:48PM
I agree... I found it pretty ignorant to claim that people should buy things at higher prices in the name of capitalism.
Let's face it: Consumers are saying "We don't want your salesmen, stores, showrooms or extended warranties, just give us the damn TV." E-tailers have responded, brick and mortar stores haven't. If they can sell something at a lower price and another store goes out of business, tough beans. THAT'S capitalism.
John @ Mar 19th 2009 3:34PM
When did this site become EconomicsHD? I'm sensing this topic has hit a painful nerve, so I want to wish everyone a happy spring, and I hope everyone gets a beer after work today and goes home happily to the wife/significant other. Don't worry, be happy...at least sometimes!
PS. Go Panny and Plasma, you're our only hope.
Gary @ Mar 19th 2009 9:39PM
I dont think that Pana could have thought this through properly. They want to move into the space that killed Kuro! In this economic climate it is suicide. All this will ensure is that Plasma dies out completely much sooner than it should. Already reasonable quality 1080p LCD's are cheaper than 1080p plasma in the 42" bracket. With the strides that LCD are making, they will completely dominate the market in record time thanks to this new strategy by Panasonic. I prefer plasma at the moment but I am quite willing to swing over to the LCD camp if the value proposition is significantly better. If Panny prices go up (or do not drop at the same rate as LCD prices) then they are on the slippery slope out of here!