Remember "Loss Leaders" in the world of tech and gizmos? Have CD's and DVD's that are marked down insanely low, hope you sell, and get people to buy other stuff. It's a historical practice, and probably one that doesn't get enough attention.
This was something Best Buy and some electronic stories try or tried because they want you to buy expensive stuff. In fact, last time I headed to a Best Buy, I thought about the fact I see a lot less CD's and DVD's there.* Sure there were some, but not many, and they seemed to be cheap stuff, recent stuff, and expensive sets. I'm guessing the latter is the only guaranteed profit maker.
Loss leaders aren't working like they used to.
Come to think of it, the answer seems pretty obvious: The Internet and The Economy.
First let's address the economy, which sucks and means we want to buy less stuff, especially stuff that we really don't need. Sure it's marked down, but if we don't really need it anyway, then why buy it in tough times? The economy clearly didn't help.
But then there's the Internet.
The obvious way the Internet kills off Loss Leaders is that simply you can get their contents online through Netflix, discounted sellers, used copies, or simple piracy. Why buy them at a store when you can do it cheaper or free?
But there's other reasons. Previews of things seen on the internet, reviews, and so forth can make you more picky and better informed. You're used to looking for, well, crap, used to researching. You know what you want, you seek it, and you're less likely to be tempted at a store.
Put it all together, and there's a loss of Loss Leaders. We don't want to buy them, we don't need them.
I have to wonder how many companies have to struggle with this loss . . .
– Steven Savage
* In my defense, I now usually go to Fry's.
Looks like Anonymous teamed up with Wikileaks to release a load of hacked emails taken from Stratfor. Admittedly we’re all a bit numb to hack news these days, but there’s a few important takeaways.