RERAP SPECIAL:
HOW LOW WILL BEST BUY GO?

Best Buy is once again pushing the pricing envelope, and consumers are reacting. This week BB offered Red Hot Chili Peppers and Counting Crows at $9.99 apiece for Tuesday only, with the price going up to $11.99 for the rest of the week.

Competitors are up in arms, but don’t be surprised if you see more of the same over the weeks and months to come. On Tuesday, Best Buy sold five to 10 times the quantities of the competition on RHCP. And although stock was said to be an “issue,” BB will likely own an almost unprecedented marketshare at the end of the week.

But the giant chain didn’t stop there. Even though Pop sensation Avril Lavigne’s developing-artist price went up on June 23, two weeks earlier than originally planned, Best Buy chose put it on the shelf for $5.99 this week. Several other titles were at that same low price point, including the developing N.E.R.D. project, but none possess the sales clout of Lavigne. Label sources at Arista insist that BB bought no special program to create the low price: “We were just as surprised as everyone else.” Once again, stock issues are said to be plaguing the chain, giving many the opinion that even Best Buy underestimated just how reactive these price points would be.

Retailers, already for the most part chasing Best Buy’s gargantuan marketshare, are now bracing themselves for yet another round of pricing wars. Tower, for example, had for years refused to get into a price war. But now the music retailer has just started to offer $11.99 pricing on new releases for Tuesday through Thursday, and went so far as to offer “every CD in the store for $12.99” over the Fouth of July weekend. But aggressive pricing strategies like that now seem to pale as Best Buy hauls out its big guns. Can we expect to see the same $9.99 Tuesday-only price on next week’s Dave Matthews Band release? Stay tuned.