By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Home theater furniture continues its march into the digital age, teaming with flat-screen and large-screen televisions to form a major home display statement in the living room, great room or den.
In tying case goods and ready-to-assemble furniture pieces to LCD and plasma sets, as well as rear projection units and A/V components, the furniture accessories category brings both practicality and good looks to a hot flat-screen video business.
"We are experiencing exponential growth, and our sales to the consumer electronics community is the most significant growth area," said Rich Serlin, VP/sales and marketing at Commerce, Calif.-based Encore! Home Entertainment.
"One reason is what more and more consumer electronics retailers are realizing — that home entertainment furniture helps sell televisions by overcoming the frequent spousal objection to large, unattractive rear projection televisions. Given that, the fact that furniture is a high-margin accessory, with an increasingly significant attach rate, portends well for increased sales in the first half of 2004.
"As a category, home entertainment furniture owes its opportunities to consumer electronics. In the past, far too many furniture manufacturers have failed to study the category, and they too often manufactured to their convenience (e.g., chasing materials yield instead of the electronics).
"The opportunity for the first half in 2004 is a big one, and prompts my optimism for a strong first half of 2004. The opportunity is the late summer/early fall rollout of a new type of rear projection tabletop using LCD or DLP technology. These units with screen sizes, varying from 43 inches to 61 inches, are light — the Samsung 61-inch weighs only 101 lbs., and thin, about 15 inches deep. Seventy-inch sizes, with depths reduced to 7 inches will be introduced shortly, too. A 61-inch Samsung or RCA retails for under $5,000, where a comparable plasma retails on up to $20,000. The television image is 'eye-popping.'
"The good news is that, even more so than a standard rear projection television, these new tabletops require furniture. While the television manufacturers offer stands in the same design as the television chassis, my customers tell me that, with few exceptions, they are forced to buy the stands, and the consumer does not want them. (Especially) the lady of the house wants these televisions displayed in their home on real furniture."
"The accessory business continues to show improvement, with increased sales of digital TVs, DVD players and home theater systems," said Marc Sculler, Bell'O International executive VP. "Digital TVs and audio components require the ability for ad-on sales of furniture, cabling, wall mounting brackets, Wi-Fi, surge protection, universal remote controls and numerous other accessories.
"In recent years. retailers have placed more attention on accessory sales, due to their higher gross profit margin than audio and video components. We expect the continued focus in this area will continue in 2004 as retailers look for means to increase corporate profitability."
At Morganville, N.J.-based Bell'O, "We expect the first half of 2004 to continue this strength with the introduction of new and exciting products at CES.
"Also, as the retail price of digital and flat-panel TVs decreases, the volume will increase exponentially. We expect the increased unit sales of these products will translate into increased sales of audio and visual furniture."
When flat-screen TVs are not being featured within or upon formal furniture, these often are being placed on wall or ceiling mounts.
"The accessory segment continues to gain relevance as more and more components, such as speakers and now televisions, are being mounted to walls," said Jim Wohlford, president of St. Paul, Minn.-based Sanus Systems. "And with the combination of digital storage, all-in-one units and smaller footprints, the traditional wall console cabinets are becoming passé.
"Looking forward, expect to see more and more customized racks and stands designed for today's digital TVs. And... we also expect a continued onslaught of new mounting hardware — both those pieces that are well designed and manufactured and those where the most compelling feature is a low price point. It seems that some retailers are beating each other up in their rush to the lowest lead price.
"We don't believe that customers are looking for the cheapest possible mount or stand for their new flat-panel television. They are just as interested in esthetics, ergonomics, function and ease of installation. Sanus is trying to build reputation and customer base, through offering a reasonably priced selection of very high quality products.
"It may be the lead price that increases sales in the short run, but it's quality that keeps customers loyal. So at the end of the day, the manufacturers and retailers that will win the accessory war are those with well-designed products in well- designed packaging sold at a fair price. And with the booming demand for mounts and stands of all shapes and sizes, it's a big war to win."
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.