So you’re in the market for a new TV, and you want to get the best price around. Do you automatically head for your nearest club store to make a purchase, or do you shop around first to make sure you get the best deals? Chances are, you assume you’ll get the best price if you point your car towards the nearest Costco or Sam’s Club. But will you? Let’s take a look at the pros and cons of club store TV purchases.
Selection
The first thing you should know is that the TV selection at club stores is more limited than what you would find at your nearest electronics store such as Best Buy, Fry’s Electronics, or hhgregg. Club stores are catering to a specific kind of customer: one who wants to feel good about getting more bang for their buck. Because of this, club stores often negotiate special prices on certain items, and forego those products that don’t afford them the opportunity for frugal greatness.
A comparison of the number of products and the number of manufacturers represented at electronics stores vs. club stores tells us that the electronics stores in gap intelligence’s panel (Best Buy, Fry’s Electronics, and hhgregg) have an average of 175 TV models, from an average of 11 different manufacturers. The club stores (BJ’s Wholesale Club, Costco, and Sam’s Club) come in at an average of only 88 models and 9 manufacturers per chain. Clearly, shopping at an electronics chain will offer a wider variety of models and manufacturers, and therefore price points, than club stores will.
However, keep in mind that club stores often offer products that you can’t find in regular retail stores. These are called club-exclusive SKUs, and they come about through special arrangements between the stores and the manufacturers. Oftentimes, these SKUs are very similar to those models you would find if you walked into any old Best Buy store, but they may feature a slight alteration in specs and are offered with a special price. In most industries, this alteration comes in the form of a USB cable for printers, or a free bag for a digital camera. The differences in club-exclusive TVs are harder to discern and are not commonly noticeable by reading a specs sheet. Club-exclusive SKUs are usually not found on the manufacturer’s website, which means shoppers have to go into the club store in order to view the model and its corresponding specs, making it harder to compare models across stores. Gotcha! There are currently 45 club-exclusive placements on club store shelves.
Price
Many people assume they’re getting a good deal when they shop for a TV at a club store. But is this really the case? There are a couple of things to consider when comparing prices between store types. The first is what is called a UPP, or Universal Pricing Policy. Most major TV manufacturers have a UPP in place, meaning that each TV model is priced the same across all retailers, with the threat of future shipments being cancelled by the manufacturer if the store does not adhere to the policy. The result is that you are likely to encounter similar prices for the same product no matter where you shop, whether it’s at Best Buy or Sam’s Club.
Remember those club-exclusive SKUs? This is where they come into play. By tweaking the specs on a TV, club stores are able to offer models that are similar to, but not the same as, the models found in regular retail stores. These club-exclusive SKUs have their own pricing strategy and chances are that the club stores were able to negotiate a lower price than the ones found in retail. But is this actually the case? Let’s take a look, using two current examples.
The LG 55GA6400 is a 2013 model year Smart TV, and retails for an average price of $1,399. At club stores, however, the model number is changed to 55GA6450, and carries an average price of $1,325. Surprisingly, there is no discernible difference in core specs between the two models, giving a clear $75 advantage to the club-exclusive SKU.
Samsung also offers a 2013 model year Smart TV in retail, with a club-exclusive counterpart. The UN50F6300 has an average retail price of $999, while the club-exclusive UN50F6350 is offered with an average $949 price. Again, the difference between the two models is undetectable, giving the club stores a $50 advantage with the exclusive model.
Several other club-exclusive models draw similar price comparisons to their mass retail versions, leading to the conclusion that club stores do have a slight advantage when it comes to comparable models. However, given that the electronics stores deliver more variety in their offerings, chances are good that you can find a model that fits your budget and desired feature set. Unlike club stores, mass retailers have TV models on sale every week, often with extras attached such as free delivery or a free Blu-ray player. With delivery fees or Blu-ray players priced around $75 to $100 or more, the price difference in the TV unit could become negligible. In the end, it comes down to doing your research and shopping around to find the perfect TV for you.
