Are you a dedicated price comparison shopper? Are you one of those consumers that go to stores like Best Buy to get a demo on the latest TV, then end up buying it a lower price from an online dealer or run around for store-to-store to take advantage of price matching policies? If you are what is referred to as a "Showroomer", and/or aggressive price comparer, then this news is for you...
Samsung and Sony are instituting a new Unilateral Pricing Policy (UPP) that may just put the brakes on consumer "showrooming" and price matching by informing dealers what MAP (Minimum Advertised Price) that is allowed.
What this means is that the affected product cannot be advertised or sold below a price announced by the manufacturer. However, there is no restriction on how much above the MAP price the product can be sold for, and there is no signed agreement between the manufacturer and dealer that the product must be sold for a specific price. However, if a dealer advertises or sells the product below the MAP price, it risks losing its dealer association with the manufacturer.
It is interesting to point out that the MAP and Unilateral Pricing Policies being implemented by Samsung and Sony are legal, as the manufacturer and dealer do not conspire to set the actual prices for the products involved, and the dealer is not required by the manufacturer to sell the product for a specific price. However, if a dealer does advertise or sell the product for lower than the manufacturer's announced price, the manufacturer can simply stop shipping that product to the dealer, or discontinue its association with the dealer entirely.
Manufacturers can change their MAP pricing to adjust to market conditions as they see fit, such as holiday or special events, or end-of-cycle clearance sales. This gives dealers some flexibility for discounting, but reduces the variation in sales prices offered to consumers.
To boil this all down, consumers will see prices of some higher-end TVs from both Samsung and Sony in the coming weeks and months go up, in some cases substantially. On the other hand, prices for the affected TVs (and possibly other products to come) will be more consistent from dealer to dealer, lessening the need for as much comparison shopping on the part of consumers, as well as allowing smaller dealers to more easily compete with big-box and internet retailers.
For more on this development, read the report from HD Guru (who broke the story), as well as Custom Retailer, as well as an additional report posted by PC World on May 23, 2012.