Thursday, December 07, 2006

WalMart Rattles their (toy) Sword

WalMart sent shivers down the spines of retailers across the land this year, in what could almost be described as the Bizarro World Scrooge Strategy. They told the world that, at this time of year, they are in day-to-day discussions on pricing for toys, and would not rule out dropping the prices on toys between now and the ChanuCristmaKwanzaa season.

(This is Bizarro Scrooge in that they are making other's holiday seasons more miserable by increasing access to gifts.)

I wrote a little about this in my ClickZ column this week, specifically talking about the control that the channel weilds over manufacturers. It's hard to judge the effect this will have on manufacturers, but I wonder if they will call the manufacturer before dropping the price on the Pirates of the Caribbean Isla Cruces Playset?? Or, will they simply do it, then present the numbers back, after the season and tell them how they made up the difference in volume, and therefore should be forgiven (monetarily) for doing what they needed to drive business?

Whatever the deal, the fact remains: manufacturers need to strengthen their brands to avoid being taken advantage of by the channel. If they do this, it will actually protect value on both sides of the purchase equation.
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