Top Execs Predict Hot Accessories Trends For 2001

By Jeff Malester On Jan 6 2001 - 8:00am

Tracking specific directions for the accessories business in 2001 can be as difficult as predicting the relative health of the U.S. economy 12 months down the road or the timing of ups and downs in the financial markets.

A number of top accessories company executives were asked to take their best shots at pointing to category trends in the year ahead, and generally, most tied the accessories' success to the success expected for the consumer electronics hardware. The executives also offered their predictions for the hot accessories products this year and detailed their own 2001 International Consumer Electronics Show introductions.

"The overall accessories industry will continue to grow," said Jack Nick, accessories and components business VP at Indianapolis-based Thomson Multimedia. "We expect growth of five to eight percent in Thomson/ RCA business in 2001, based on strong remote, surge protection and digital hookup sales."

Jasco Products is "convinced that 2001 will be a record year for sales of electronic accessories," said Kent Shiplet, executive VP/sales and marketing and product development. "The growth will be fueled by an explosion of new, exciting products in virtually all categories. Electronic products offering the demonstrable advantages of digital technology will be the 'engine' of the growth in both equipment and accessories."

Accessories should "continue to be very strong in 2001," said Mark Naidoff, VP/general manager for computer and consumer electronics accessories at Itasca, Ill.-based Fellowes Manufacturing Co.

This can be directly related to three main factors, Naidoff said. "As pricing on hardware, computers, peripherals and PDAs continues to drop, consumers spend more money on accessories. The emerging technology-namely PDAs, wireless devices, Internet appliances-creates demand for new accessories. Due to shrinking margins on hardware, retailers need to focus on accessories for improved margin opportunities."

Said Bob Borchardt, president/CEO of St. Mary, Fla.-based Recoton, "We foresee continuing strength in the accessories business [because of] the need for accessories to support, enhance and modify the new digital technology products already available and the others coming to market this year. This includes products customers will want to purchase to make their equipment perform with greater flexibility and function, or to replace lost or broken items."

"As digital products pick up, we're seeing a rapid trend to digital-type accessories products," said Len Coakley, VP of accessories at the Zenith Accessories Division, Glenview, Ill. "With the economy strong, the industry is moving more and more toward digital, requiring more and more accessories products.

"We're also seeing colors on certain products, like remote control. This year, it was iMac colors. Next year [2001], it is going to be VW Beetle colors, like reds, blues, grays and blacks. The iMac color trend has run its course, but we are still shipping a lot. Now, people are looking toward painted-lacquer type of color, the VW Beetle colors."

As for remote control devices, Coakley said, "the average selling price for remotes is actually increasing at retail. Where it used to be below $10, it is now close to $14.99. People are showing more interest in the higher end, with touch pads and learning remotes. Previously, a remote was just a standard piece of equipment; it now is becoming more market-oriented.

"The market is addressing lots of segments-children, teens, young adults, married, elderly. There's a remote for everybody. We have 88 models in our line, with each color a different SKU."

"Brand strength has become increasingly more important in today's retail environment," said Peter Brinkman, marketing director for the consumer products division of Fair Lawn, N.J.-based Maxell Corp. of America. "New technologies and new formats present themselves in virtually self-help retail environments. Recognized brand names offer great consumer confidence, as well as enhanced merchandising strength on the retail shelf."

Retailers are actively implementing merchandising strategies that emphasize brand strength, product portfolio width and leading-edge technologies, said Brinkman, who feels Maxell has been effective in delivering on these challenges.

In the audio category, for example, whether home system-based or portable audio, Maxell offers product solutions in analog and digital media-a full line of headphones; a full complement of car and maintenance products; and a full range of batteries to power Walkmans, MP3 players and boomboxes.

"The media and accessories categories are going through a series of significant transformations," said Brinkman, "including retail consolidation, new technology platforms, product category evolution and the greater importance of brand strength The migration from analog to digital formulas has had the greatest impact on the media category."

In the audio category, CD-R Music has been an extraordinary success, the Maxell executive said, "delivering great volume growth and even greater category vitality. The crossover of CD-R data products utilized to download a range of content, music included, for PCs has also stimulated this category."

An up-trend in consumer demand for technologically advanced, high-quality CE has increased demand for high-quality audio/video furniture, said Bill Becker, president/design director at Chantilly, Va.-based Becker Designed. "More and more high-end electronics retailers are finding that by using well-designed, high-quality A/V units to display their components, they can incorporate the sale of that furniture into the total purchase of a system."

Eric Tong, director of marketing and product development at Compton, Calif.-based Belkin Components, said his company "strongly believe[s] the accessories business will continue to prosper as retailers continue to look for products that will boost their net profits."

"Some critics have predicted accessories sales to lower due to lower ASPs for printers and peripherals," said Tong. "On the contrary, we've found that end users have looked for ways to improve their work environment. Lifestyle accessories are making a big push as people spend more and more time on their computers and want to personalize their work."

"Resellers will continue to look for the accessories category to expand their product offering and to enhance their profitability with margins not found on hardware products," said David Cartwright, president of Targus Inc., Anaheim, Calif. "There is an increasing demand for both style and utility in all types of products.

"Carrying cases don't play second fiddle to CDs and digital cameras anymore, but rather take on a fashion identity of their own. Consumers want accessories that mirror popular trends and offer innovation in design."

At Targus, which includes carrying cases and mobile accessories, "accessories will continue to be the fastest growing product segment of our business and represent 40 percent of Targus' total revenue in 2001, an increase of 100 percent from 2000," said Cartwright.

"One of our new objectives is to develop the Targus brand with consumers at an earlier age, thereby creating loyal, lifelong users of our products," he said. "Our strategy is to introduce a number of product lines targeted to younger audiences, like backpacks and CD cases. The cdProjects brand, Roundhouse and RAKgear backpacks will play an integral role in helping us to penetrate the youth and teen markets."

"The Internet will dominate and, in fact, drive the accessories category," said Brent Meikle, president/CEO of Toronto-based LEAP Energy and Power Corp., maker of a new line of alkaline batteries launched this past fall. "No longer will there be tripods for cameras and telephone cables. Instead, accessories that make it easier, more convenient or more exciting to use the Internet will offer the most opportunity and will have the greatest retail impact."

Topping Meikle's list of accessories opportunities in 2001 are those related to the "wireless Web."

"If you believe Japan is the barometer to measure the future of the wireless Web, then you also realize that the opportunity is now," he said. "Batteries are the lifeblood to the wireless Web. The future is really about no boundaries, only infinite possibilities. It's about the power to see, hear and talk to the world as it exists today. It's where tomorrow is waiting.

"This simply means making better batteries, more advanced and smarter batteries, and it means no longer working in isolation. It means working in lockstep with product developers to create better products for consumers."

Looking at what will be hot in 2001, Thomson Multimedia's Nick said he expects the remote control category to be livened up by new colors, namely RCA liquid and platinum colors. Learning and full-featured remotes, including DVD compatibility, will drive the category.

A complete new line of surge protection will be introduced this year by Thomson Multimedia. Designed to be application specific, these new models will range in price from $19.99 to $49.99.

"In terms of distribution, we will concentrate on the CE channel, as well as computer [peripherals] and home channels," said Nick. "More and more customers are hooking up home theater systems, and the time is right to focus on protecting their investments."

New technologies will enable Thomson Multimedia to move into the infant home-networking category. Wireless data transmission and high-speed Internet access are the key focal points in 2001, said Nick, and "the key to home networking is to provide solutions in terms of portability, convenience and speed." The company will introduce several new products in this category.

In other categories, Thomson Multimedia said antennas will continue to evolve as an opportunity for design factors to drive sales, and the company will be introducing crystal-colored antennas this year. Also, Nick said, sales of replacement camcorder batteries continue to decline as new original equipment batteries last longer.

Jasco continues to see a dramatic shift from non-name accessories product lines to branded lines, according to the Oklahoma City-based company's Shiplet. "This is particularly important in today's 'self-sell' environment," he maintained. "Marketers with weak or no national name-brand awareness will have a very steep hill to climb."

Jasco, a multicategory supplier of GE-branded accessories, said it has quadrupled storefronts served during the past two years with its branded lines.

Looking at the coming year, Shiplet expects that current strong computer accessories sales should benefit from continued strong PC sales due to increased affordability and growth in the number of home offices.

"Sales of cordless and mobile phone ear and headsets are on fire," he said, and wireless phone and modem jacks have trended upward by about 30 percent. Sales of products that provide phone-line access in rooms lacking wall jacks have been spurred by sales of computers, satellites, Web TV and others.

Looking at additional hot accessories products this year, Shiplet said USB hubs and connecting cable sales will likely double in 2001 due to increased market penetration of USB specified computers and peripheral equipment.

Demand for higher-end A/V cables is on the rise, fueled by sales growth of DVD, DTV, digital receivers and home theater. Also, A/V/game switcher sales could grow by 75 percent this year, said Shiplet. This accessory product solves a common consumer problem because many users now have a VCR, DVD, satellite and up to three different formats of video games to connect to their TVs, which has only one single input.

The market continues to grow for high-technology alternative-design outdoor antennas to companion with DBS satellites and meet the needs of the emerging DTV/HDTV market, he said.

Jasco has developed in-depth introductions for CES this week, said Shiplet.

These include the launch of a broad line of GE-brand ear and headsets for use with cordless and mobile phones; expansion of a GE-brand cordless phone battery program; debut of several new computer accessories, such as wireless mice and keyboards and optical mice; the doubling of the number of GE-brand surge protectors; and the unveiling of a dynamically packaged line of Digital Ultra ProGrade standard and optical cables.

In addition to its CD-R Music lineup this year, Maxell is launching a longer-length CD-R Music Color Disc (CD-R Music 80-minute length), said Brinkman. Maxell also is showcasing a new CD-R Music Pro product that will be targeted to consumers "who will be searching for the very best product on the market." the marketing director said.

"What's hot is the wireless Web and the merger between cellular and other technologies," said LEAP's Meikle. "What's not hot is any consumer electronics product that ignores the Internet and continues to try and milk existing 'non-Web' technologies.

"There will be dramatic, high-impact products released which will gain faster market penetration than at any time in history," continued Meikle. "Those products that are not sensitive to the world we live in today, and how it might be tomorrow, will be quickly dated and become dinosaurs," he said-referring to standard cellular telephone leather carrying cases, single-function DC plug-in chargers and single-function mono-speaker hands-free kits.

What will be hot for Fellowes are PDA accessories, media labeling, headsets, power protection, portable media storage and mobile computing accessories, said Naidoff, who added that glare filters, dust covers and key guards have cooled off.

This week at CES, Fellowes will be introducing 11 new PDA accessories, including a wireless portable PDA printer and a PDA key board/case.

In mobile computing, Fellowes will introduce 25 accessories, including notebook AC/DC power adapters, mini-motion sensor alarm, hands-free speakerphone charging station and a full lineup of cellular accessories. It will be introducing 10 headsets designed for cordless, cellular and PC use, and a full line of fashionable portable and mixed-material media storage that addresses different lifestyles.

"The trend toward wireless connectivity, portability and convenience is echoed in the popularity of PDA modules and peripherals," said Targus' Cartwright. "Anything that expands PDA functionality is hot. For example, Targus' CompactFlash Pocket modem, Total Recall digital voice recorder, CompactFlash Plug-in cards and Stowaway Portable Keyboards will be extremely significant products for us in 2001."

Targus will launch more than 100 new products across its core lineup in 2001. Cartwright said the company is particularly excited about its new sport collection of notebook cases, three unique lines of CD cases and leading-edge accessories for handheld computers.

From Belkin's prospective, wireless solutions, home networking and high-speed interfaces will be hot in 2001, said Tong.

"The market is continuing to look for ways to interconnect and communicate more quickly and easily. Technologies like IEEE 802.11, Bluetooth, USB 2.0 and FireWire will receive lots of focus as more applications become available throughout the year," Tong said. "We will continue to push the envelope in finding solutions in making the computing experience more enjoyable and intuitive."

Recoton's Borchardt expects 900MHz wireless speakers and headphones to be hot in 2001. Growing advertising and promotion and increased user knowledge of DVD, HDTV, digital TV monitors, home theater audio systems and autosound products are behind promising sales increases of speakers and headphones, he said. "We expect this trend to continue, and accessory sales will follow."

Also, the introduction this past fall of the new PlayStation2 gaming platform, along with other game platforms scheduled for introduction in 2001, bodes well for new accessories products and sales next year, he said.

"CES is the ideal showcase for Recoton to exhibit our products and to meet everyone," said Borchardt. "With close to 4,000 SKUs available from our three business segments-accessories, audio and gaming-we are planning a large display area that will show the depth and breadth of our products offered under many well-respected and recognized brand names."

Surge protectors continue to be strong, said Zenith's Coakley. "These are moving to the audio/video area, not just the computer area. Before, 70 to 80 percent were sold to computer users, but TV, DVD, DSS also need protection.

"Wireless video senders are picking up steam," said Coakley. "A lot of people are putting more digital products in the house, like DSS and DVD. This allows you to split signals and send these anywhere in the house without wires."

Zenith expects to have four- and five-device remote control units in VW colors this year. Suggested retails are $17.99 and 19.99, and the five-device unit will be back-lit. Zenith also will have a line of remotes for children, called the Klicker Jr. Single-device remotes in iMac colors will retail for $6.99 to $8.99. A seven-device with LCD learning remote has a suggested $29 retail. A PlayStation2 remote has a suggested $19.99 retail.

Zenith's digital lineup for the myriad digital products coming out includes a line of video coaxial cables in 3-, 6, and 12-foot lengths with F connectors; a line of video and audio cables with RCA connectors; a line of S video cables; and optical cables in 3- to 20-foot lengths.

New from Zenith is a Personal Assistance Security System designed for those with elderly parents at home. The device hooks into the phone system and telephone numbers can be preset. The users then wear a pendant around their neck, and in an emergency, an auto dialer will hit up to four numbers until someone picks up. The device includes a speakerphone, so respondents can hear what is going on in the house. Suggested retail is $99.99.

A remote control signal sender, for someone who splits a signal by using a wire and still needs a remote control to change channels, allows users to change channels on any signal that is split. It uses RF and IR technology at a $49.95 suggested retail.

The focus this year will always be on quality, style and design, said Becker Designed's Becker, especially how furniture accentuates and enhances the equipment. For the dealers, A/V furniture that is easy to merchandise, trouble-free and profitable is the key.

"Furniture that addresses the needs created by the new, larger televisions and A/V components will be hot," Becker said. "Our forte is engineering systems that can accommodate the requirements of the largest units, namely greater capacity and sensible wire management, while never sacrificing sophisticated styling.

"Old-style racks and cabinets that really haven't changed in years, and low-quality units that do not provide the support or have the capacity for today's larger components will not be hot.

"Consumers are spending a lot of money on A/V systems and televisions and are willing to spend additional dollars to house them-provided they have the quality, capacity, size and style they are looking for," said Becker. He pointed to the company's Lido and Arena collections, designed in anticipation of those needs.