October 22, 2008, 12:00 AM

Web retailer offers discounts tied to stock market declines

Home Theater Direct`s new “Dip-in-the-Dow” program offers a discount equivalent to the percentage drop the previous day in the Dow Jones Industrial Average.

Katie Evans

Managing Editor, International Research

Plummeting stock prices inevitably cause consumers to think twice about a discretionary purchase, such as new speakers or musical amplifiers for the home. Web retailer Home Theater Direct Inc. has come up with a way to offset that negative wealth effect by offering consumers a discount whenever Wall Street stumbles.

The e-retailer this week introduced its “Dip-in-the-Dow” program, which each day offers a percentage discount equal to the percentage drop the previous day in the Dow Jones Industrial Average.

“It’s fun and it’s interesting, and certainly customers don’t mind getting a discount, small or big,” says Mike Smoot, national sales director. He says the retailer’s sales have “flattened out,” in the past month, as Wall Street crumbled, but that sales were still ahead of last year. The privately held company does not report sales data.

The retailer promotes the discount program on its home page with a chart in the upper right showing a downward-sloping fever chart, and a headline that says, “Click For Today’s Extra Savings.” The link takes the visitor to a page that explains the program, shows today’s percentage discount and provides a discount code to enter when checking out.

Home Theater Direct manufactures its own products: speakers, amplifiers, keypads, controllers and other accessories related to home audio. More than 95% of sales come from its web site, htd.com, and the rest through a showroom at its headquarters in Plano, TX.

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