In the words of Steve jobs, Best Buy (BBY - Get Report) is declaring thermonuclear war on Amazon this holiday season. Best Buy has publicly declared they will match Amazon's pricing. No easy task considering Amazon margins are brutally low, and Best Buy is more or less writing this holiday off.
Best Buy hopes to end the consumer's psychological bias that Amazon sells the same products for much less. I don't even think Best Buy needs to price match. If they bring it within 2% or less, most consumers won't take a chance and just buy the one in their hand. Of course, that will not chance perception like a full price match will.
Best Buy has its work cut out, but the holiday shopping season is very forgiving, especially if you have the product in stock and ready to walk out the door. The real point is Best Buy will place another chink in the armor of Amazon.
The holiday shopping season for Amazon, like most consumer retailers, is what drives profitability for the entire year. (Amazon is expected to post third-quarter earnings results on Oct. 25. The consensus estimate is for a loss of 8 cents a share.)TheStreet's Rocco Pendola
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts