Double Journey

I decided to pull the trigger on the Panasonic 50PZ800u and have discovered one of the better under-publicized features of Amazon, their 30 day price guarantee. One of the anxieties of buying any big ticket electronic is that prices are always dropping and you just know it is going to drop the minute after you make your purchase. There wasn’t a more perfect example of this than this. More on that in a minute.

On Friday, Amazon showed that it had my TV in stock. Funny enough, they delayed the “In Stock” date yet again the day after my original post about Amazon teasing me. So I had to wait another day before I felt comfortable ordering it. I got in on Friday morning to see that they were showing the item in stock, so I decided to go through with the purchase and just order it. I wanted to get the TV as soon as possible since the NBA finals will be starting on Thursday, and the Lakers are in it. It is going to be a classic match up between Los Angeles and Boston so I wanted to catch as much of it as I could on the new TV.

I ordered the TV at about 10:00 a.m. PST. The price of the TV when I ordered it was $2368.86. I felt fairly comfortable with the price and truth be told I would have been happy to pay that amount. But wouldn’t you know it. I obsessively checked the status of my order at noon and noticed that the price had dropped more than $50 to $2313.96. I could only laugh as I found the whole thing pretty amusing. You expect the price to drop sometime after you buy it, and that’s just life. There is no point in always holding out for a lower price because you will never get what you want. But dropping by $50 just two hours after you have bought it? Now that’s just irony.

Now I have read that Amazon has some pretty sophisticated albeit strange pricing algorithms. It could very well be that my purchasing of the TV actually caused the price of the item to go down. As the margins on these TVs are pretty good, and I’m sure they don’t sell them in as much quantity as say a DVD, it is very likely that my actions had an affect on the price, and therefore the price dropped. Of course this would fly in the face of traditional supply-and-demand principles, but who am I to tell them not to give consumers a better deal?

However, Amazon has a 30 day price guarantee that is good until 30 days after the item is shipped (my item hasn’t even shipped yet so I think I’m getting an even longer window). All you have to do is go to the customer service screen which should list all your recent orders. You should be able to click on a button to e-mail customer service. If you e-mail them with the price that you saw listed on Amazon, they will refund you the difference with a credit to your credit card.

But it gets better. You can do this as often as you like in your 30 day window. Quite literally, another 3 hours later, the price dropped yet again to $2286.86, a total of $82 less than my original purchase price. I e-mailed them again to get the new price difference and yet again they credited me the money.

Wait, it still gets better. There is absolutely no hassle about it. It really couldn’t be any easier or faster. Each time I got a pretty standard response saying they looked at it, and they agreed they had it at a lower price, and they would credit my credit card the amount. And they did this all within a few hours after my inquiry (even though today is a Saturday).

So far, so good. Now all I need is for the TV to show up …

Tomorrow is Christmas. Not to sound so cynical, but it really is one of those things that has turned into a consumer driven holiday. Given that, it gives great insight to where we are as a nation economically and where we might be headed for the next year.

This year looked to be a bad year for retailers. Many people were blaming the subprime mess and credit crisis for the problems. Others believed that the consumer was worried about a recession. But it looks like there may have been a slight last-minute rush to the stores.  However, I wouldn’t rush to crown this a great success.  Other reports I read are that Credit Card debt is rising, so much of this consumption may indeed be borrowed from the future.

This holiday season will be crucial to myself because it will dictate a lot about where I think the economy is actually going this year, and thus my investment strategy.  You see, people vote with their wallets.  It is an important psychological thing for people to buy things during this time of year as to not disappoint their loved ones.  If people aren’t spending, they are worried about the future.  If they are worried about the future, they must see things on the horizon that really worry them.

I’ve been a natural bear for a while, so I need to temper whatever news comes out about the consumer with my own internal bias.   I would be shocked if this holiday season turns out to be a success as I think the wealth effect will be working in reverse.  People are starting to realize that their home is not an ATM.  I think it is happening slower than it should, but it is happening.  If people feel poorer, they will spend less, and the economy numbers will be affected.

This blog post is completely off topic, but I’m going to do that every once in a while just to keep things interesting.

I talk a lot about this subject with Rick, who always is raving about how great these next generation disc look on his awesome TV. I of course have stayed out of the fray because I still have my ten year old TV so it won’t really matter if I pick up a next-generation player. But I follow the war with some interest only because I find these types of battles to be interesting.

As I shopped around this Black Weekend, one of the things I did look for was to see what types of deals were available for either type of player. I saw multiple places with a Toshiba HD DVD player for $199. Amazon has it for even less. I didn’t see a Blu-Ray player for less than $399. There were a few of those, along with of course the PS3, which can act as a Blu Ray player itself, and at this point is the best value if you are going to go down this path.

Despite the fact that I’m a bonafide geek, I am also extremely careful with my money (wouldn’t know it from what I’m doing here would you?). I am a “mainstream” consumer in the sense that I prefer to let technology come way down in price before I buy it. I generally don’t see a reason to be on the cutting-edge, because the premium you pay is so much greater than the actual benefit you receive from the new technology. No doubt that these next-generation formats look great, but when I can buy a DVD player for $20, and the quality look absolutely fine, am I really going to pay 8x or 16x more money? Am I really going to repurchase an entire DVD collection I spent years building? Doubtful.

Many tout that the Blu-Ray technology is better. It might also have the better stable of movies with all the Sony and Disney pictures exclusively on Blu-Ray. But in the end, it’s about price, it’s always about price. I’ve stated my position. The first format to break the $100 mark for a widely-available player wins. At the price, people stop trying to save up for the purchase, and just go buy it. It becomes a mainstream purchase. If I have a choice between a traditional DVD player at $70 (which is what I spent on my player) or a newer technology at $100, then I would likely choose the newer one, just to future proof myself.

Anecdotally, the Circuit City I went to was sold out of their Toshiba HD DVD players, but had plenty of the Blu Ray players. Best Buy had plenty of both.

So what do you think? Have you picked sides in the war yet and why? Or are you like me, just waiting it out until someone makes it cheap enough to be worthwhile?