In the words of Steve jobs, Best Buy (BBY) 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
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
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
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV