TigerDirect, an online retailer of computers and consumer electronics has been accepting bitcoin for 18 months through BitPay, beginning in January of 2014.
Bitcoin Magazine sat down with Steven Leeds, head of marketing at TigerDirect to learn more about the company’s experience as one of the earliest major merchants to embrace Bitcoin. While recent reports from Expedia suggest that it has seen a decrease in bitcoin payments, TigerDirect shared a different story.
According to Leeds, TigerDirect has been thrilled with its decision to accept bitcoin. Leeds noted that Bitcoin has drawn new users to TigerDirect, with 46 percent of customers purchasing with bitcoin being new users. The company also told Bitcoin Magazine that the average order placed with bitcoin is 30 percent larger than the average order.
Leeds explained that TigerDirect sees the highest volume of bitcoin orders during periods of volatility for bitcoin price. These purchases are typically luxury items such as high-definition TVs, gaming consoles and computer monitors.
“On days when the price is rising, we see users eager to spend some of their newfound wealth. And when the price begins falling, we see others who want to avoid the volatility by spending it on consumer electronics,” said Leeds.
Despite the fall of the bitcoin price into the $200s, TigerDirect has still seen consistent bitcoin transaction volume.
Advantages for Bitcoin Companies
In addition to it’s consumer electronics business, TigerDirect also supplies hardware to many businesses, including a significant number of Bitcoin companies. Some of these companies include miners who use TigerDirect to buy power supplies, cooling systems and other hardware. These miners do not have to convert their bitcoin to cash, as they can pay directly with the bitcoin that they have mined.
TigerDirect was originally introduced to Bitcoin by some of it’s employees who were early adopters and miners of the currency.
“We’d recommend Bitcoin to any company considering it,” Leeds said. “We’ve had a fantastic experience accepting it, and BitPay allows us to integrate the payments into our existing checkout flow easily.”
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If you’re going to shop at TigerDirect, Bitcoin is now a payment option during the checkout process. The online electronics giant currently sells over 200,000 different products over the Internet, and they are the first large electronics retailer to accept Bitcoin payments from their customers. This move makes a lot of sense for a company that focuses on selling electronics over the Internet, and some will be surprised that it did not come sooner. This could force Newegg, another major electronics retailer, to make a similar move.
Why Accept Bitcoin?
In a press release from earlier today, Steven Leeds, the Director of Corporate Marketing at TigerDirect, said, “it’s a logical fit” because individuals are already puchasing hardware on their website for the purpose of cryptocurrency mining. It took the company a few months to figure out how they were going to implement Bitcoin as a payment option, and they eventually decided to partner with Bitpay to get the job done. For TigerDirect, this move is all about staying one step ahead of the competition.
What Does This Mean for the Bitcoin Price?
As mentioned earlier today, it will be interesting to see how increased merchant adoption will affect the price of bitcoins. The price has already rebounded back to where it was this morning after the TigerDirect news broke, but we’ll have to wait and see what this means for Bitcoin over the long term. There is no word on whether or not TigerDirect will be keeping a percentage of the bitcoins that they earn from sales through the Bitcoin payment network, but it is likely they are immediately switching over to dollars through their Bitpay partnership. If many Bitcoiners end up using TigerDirect to purchase their electronics, we could be looking at a move that at least suppresses the price of bitcoins from traveling “to the moon” at an unhealthy pace. Either way, may Bitcoiners will be excited about the news. We’ll have to wait and see how competitors to TigerDirect and Overstock decide to react.