The HDTV industry has been ailing of late, whether it's TV manufacturers dealing with slowing sales or bricks-and-mortar retailers coping with buyers making more purchases online (often after testing sets in their stores). Samsung and Sony have decided to use one weapon in their limited arsenal to cope with the difficult conditions.
According to the Wall Street Journal, the two electronics giants are limiting retailers' ability to discount their televisions, which should help the Best Buys of the world who often can't match the sale prices of online retailers. And given the general trend of falling prices for sets, the move could help prop up profit margins for the companies.
In theory, if there are no sale prices for Sony or Samsung sets, you could just buy a new TV while you're at Best Buy instead of checking prices online on your smartphone as you're in the aisles and then buying from the cheapest Internet store. That increasingly common phenomenon known as "showrooming" has been a major reason that Best Buy has struggled recently, despite decent first quarter numbers.
While legal rulings have determined that manufacturers are in their rights to limit discounting of their products, there is one potential drawback to the strategy: What if people buy fewer Samsung and Sony sets because they're priced too high? LG, for example, told the WSJ that it's okay with such discounting, presumably because it could help its market share. Target has also told TV manufacturers that another way to fight showrooming is to make differentiated products for physical retailers that the Amazons of the online world can't offer.
Do you agree with Samsung and Sony's gambit that limiting sales on their TVs will help Best Buy and other bricks-and-mortar stores (and their own bottom lines)? Let us know your thoughts in the Comments section below.