I have noticed a disturbing trend lately. A while back we published an article on value pricing, which questioned why value priced came to mean low-priced. Something is currently going on with some of the big box retailers that may backfire on them.
The big boxes all focus on driving costs down so they can keep prices low. Wal*Mart claims “Always the low price.” Nothing wrong with removing costs that don’t add value so the customer gets all they value they are paying for. However, in talking with several vendors to the big boxes recently there appears to be a trend to driving the price down, even if it means removing all or most of the expected value.
Clearly there are price points for everything. That is not what I am talking about. I am hearing that some of the big boxes are looking to hit a price point regardless of whether the product provides any real value at that price. The buyers for these retailers seem to be fixated on price points, not value at a price point. That is a trend that will not end well.