Retailers in Rush to Move Plasma TVs

MINNEAPOLIS – Hanging stockings by the chimney with care? Retailers hope that St. Nicholas soon will be there — to hang a 42-inch plasma-screen TV.

As prices drop for high-end televisions, sales are leaping. Retailers expect to sell twice as many plasma-screen televisions and three times as many LCD televisions this year, according to the Consumer Electronics Association (search).

And with new sellers such as Dell Inc. (DELL) and Wal-Mart Stores Inc. (WMT) now in the market, retailers are looking for new ways to differentiate themselves.

Dell and some other sellers will deliver a TV free of shipping charges. Wal-Mart, competing on price, offers a 42-inch plasma TV for $2,000 at many of its stores, about $1,000 less than many other sellers. Many Best Buy Inc. (BBY) stores will send a technician to visit prospective TV buyers at home, at no charge, to measure and suggest other products.

"That has been a huge difference between a guy buying just a TV and a guy buying a complete solution," said Joe Brandt, the home theater manager at a Best Buy store in the Minneapolis suburb of Maple Grove.

And that "complete solution" — such as a sound system and DVD player — can be a way for Best Buy and others to grab sales it might have missed by selling just the TV.

Brandt said sales of plasma televisions were brisk during last year's holiday season, but really took off six to eight months ago. After struggling to keep up with demand last year, Best Buy has increased the number of high-end televisions for sale this year by 50 percent.

Shoppers will "see prices almost a minimum of 30 percent lower than they saw last year in flat-panel TVs," said Lee Simonson, the chief buyer for TVs for Best Buy.

Wal-Mart is selling plasma TVs in about a third of its stores, including its own ILO brand, which it rolled out in May. The company, which made its name on low prices, wants customers to think of its stores for higher-end products, too.

Many retailers are advertising lower prices on older technologies such as so-called "enhanced definition" and rear-projection TVs, hoping to lure customers into the store and then sell them newer, more expensive models, said Ross Rubin, director of industry analysis at market researcher NPD Techworld.

While Best Buy said a growing number of its customers understand the differences between different flat-screen televisions, Rubin said manufacturers and stores still have plenty of educating to do. Panasonic, he said, recently sent workers into New York-area P.C. Richard & Son stores with that in mind.

Plasma screens are considered the most vibrant, and are often the most expensive. Liquid-crystal displays are the television version of the screen commonly used on laptop computers. They are slightly thinner and cheaper than plasma screens. Also available are DLP, or Digital Light Processing (search), televisions that are cheaper than LCD or plasma, but not quite as bright or compact.

TV-maker Westinghouse Digital Electronics recently cut prices by $500 each for its 27- and 30-inch LCD TVs, to $1,199 and 1,699, respectively.

"A year ago, it was a cool product, a gadget, a very expensive gadget," said Douglas Woo, the company's president. Now, high-end TVs are a routine replacement for older TVs, he said.

Woo said retailers may not be making the 50-percent margins they got on the early, most-expensive high-end TVs, but they're making better money than on the traditional sets. "LCD TV is right in the sweet spot for retailers," Woo said.

With prices expected to fall further next year as new factories come on line, stores may need to work harder to attract buyers who might otherwise wait. Woo, in fact, called 2004 "still a set-up year," and predicted the technology won't really take off until next year or even 2006.

Indeed, traditional cathode-ray televisions still make up the majority of TVs sold, according to the CEA.

Brandon Martin, 27, held a blender under his arm at the Best Buy in Maple Grove while he eyed what he really wanted — a new flat-panel TV. But Martin said he wasn't sure it's worth the money.

"I think they do a real good job of making it seem necessary," Martin said of the high-end sets. "It's just TV."