Finding the best price on big-ticket consumer electronics items has become a confusing challenge.
Even when shopping the four biggest retailers of consumer electronics -- Best Buy (NYSE:BBY), Amazon (NASDAQ:AMZN), Wal-Mart (NYSE:WMT), and Target (NYSE:TGT) -- it's not easy for a consumer to know which offers the best deal. To help shoppers have a better handle on that answer, Wolfe Research priced a basket of popular items on the websites of each of the four chains listed above.
The 15-item basket included an iPad, an Xbox One, a VIZIO LED TV, Beats by Dre headphones, a Fitbit band, a GoPro camera, a Netgear Wireless Router, an HP All-in-One Printer, a video game, and a handful of other items. The results showed a clear winner for consumers who were simply shopping online for those specific items. If, however, you are willing to be a little more clever, the answer as to which online retailer offers the best prices is not quite so simple.
Which retailer won the challenge?
On a straight pricing basis, Amazon had the cheapest basket in this undertaking, coming in at $3,606, with BestBuy.com being $2 higher, while Wal-Mart rang up at $3,662 and Target without the REDcard discount tallied $3,745. That means that if a consumer simply entered those items into each store's online shopping cart, he or she would pay the least (without discounts) at Amazon.com.
Wolfe Research, however, went deeper than simply checking on that scenario. The research firm also looked at feasible scenarios that consumers might actually encounter. These aren't hard-to-get or especially unique discounts, they're common choices any shopper could make.
Under those conditions, Target.com, which had the most expensive basket at $3,745, actually was the cheapest if the shopper purchased the basket using the chain's REDcard discount card, which offers 5% off on purchases. Using the credit card brought the cost of the basket down to $3,558, $48 cheaper than Amazon.
In addition, the research firm noted that there are other factors that could bring prices down at Best Buy and Wal-Mart:
We would note that Best Buy continues to run its 'Price Match Guarantee' which was applicable to 15 of the 15 items that were included in our basket of electronics. Interestingly, Wal-Mart is quietly piloting a change to its price-matching policy where it is abandoning price matching in favor of price investments. However, customers are still able to price match using the companies Savings Catcher mobile app. If utilizing Best Buy's low price guarantee and searching for the lowest price for each individual item, a customer would realize -6.7% discount to Amazon's basket.
Price matching each individual item across three other retailers may not be plausible across a 15-item basket, but since most people will be buying an item or two, not 15 at once, it's a tactic which can certainly help consumers get the best price.
What does this teach consumers?
Realistically, this research shows that lazy customers should go to Amazon.com, because the online leader offers the best chance of simply having the lowest price. That said, Best Buy was not far behind and its liberal price-matching policy makes it a viable choice for consumers willing to put in the effort. In addition, Target customers who hold a REDcard should clearly take advantage of that because the company offers its cardholders the best prices.