Hello, Chaz Marler here, from Pair Of Dice Paradise, currently. Board games make up 90% of my monthly entertainment budget. And, to stretch my entertainment dollar as far as I can, I buy the majority of my new games online. So, I was intrigued when I read the news about Asmodee’s recent announcement that, as of April 1st, 2016, they are planning on enacting a new policy that will, among other things,
“...grant additional discounts to the brick-and-mortar specialty retailer... while not granting those discounts to the online specialty retailer. …It is likely that online discounts will not be as disproportionate as they have been in the past relative to pricing offered by many brick-and-mortar retailers.”
Asmodee’s statement suggests that the intention is to reward the brick and mortar stores that best market Asmodee products by potentially forcing online retailers to increase their prices, thereby closing the gap between prices offered by physical and online retailers.
Now, some suspect that, as result, online prices may increase by several percentage points, allowing selected friendly local game stores to better compete with online retailers.
However, is that really how markets work? Has there ever been an instance in which “leveling the playing field” by artificially increasing the prices in any sales channel has benefited the consumer? After all, every business - whether physical or online - works tirelessly to find its economic equilibrium. The highest price that can be charged before it reduces demand.
Online prices are typically a certain percentage lower than prices in brick and mortar locations, because both sales channels have discovered their own economic equilibrium. If online prices increase, then it is possible that brick and mortar stores will simply increase their prices to retain the previous percentage. Because once consumers become acclimated to a price adjustment, it becomes the norm. The result is higher prices in every sales channel, not the creation of some fictitious “level playing field” where a unicorn becomes president and it rains candy.Let’s hope that Asmodee rethinks, or at least clarifies, this potential market manipulation before it goes into effect this spring. Otherwise, come April 1st, we consumers may be the ones being fooled.