Hopeful Indications
By Steve Smith -- TWICE, 12/3/2001
Overexposed philosopher and former ballplayer Yogi Berra once said about dealing with the October sun while playing left field in Yankee Stadium during afternoon World Series games, "It gets late early out there."
The same can be said about trying to project holiday retail trends on the performance of Black Friday and the rest of Thanksgiving weekend, especially when it is during a recession. (If you missed the news flash last week, everyone was officially told what many of us felt for months, namely that a recession began early this year, in March to be exact.)
Still, if you read Alan Wolf's page 1 report on retail shopping trends, things are far less bleak than many predicted two months ago. While the Conference Board reported last week that consumer confidence for November was even lower than October, consumers were shopping.
If you watched some news reports during the holiday weekend and read some of the papers, you probably heard what I did. Namely, while some traditional holiday gift categories would be hurt this year, consumer electronics and new video game systems are leading shopping lists for Americans.
That's great news for this industry, but at what cost? Well discounts seem to be the main strategy of many retailers. Retailers quoted in Alan's story are hopeful that while commodity products, such as entry-level DVD players and the like, will be sold at historic low prices and garner plenty of store traffic, mid- to high-end products will still be in demand and retain their profit margins.
Like many of you, I'm pleased that consumers are shopping and they are looking to buy CE products for the holidays. While they are shopping let's hope consumers don't take much, if any, of the industry's high-end margins.
WELCOME BACK, JOE
When asked if Sirius will meet its market launch date of Feb. 14 for its digital satellite radio service, only Joe Clayton, its new president and CEO, could get away with the following comment: "As they say in the South, if the rain doesn't kill the rhubarb and if the creeks don't rise, then yes, I'm certain we'll make it."
Based on his flavorful way of turning a phrase, this is great news for the consumer electronics press corps. But more importantly, based on passion, salesmanship and moxie alone Sirius' hiring of Clayton is a real coup for the company. (And I didn't even mention his knowledge of the CE business, his experience with RCA during the DirecTV rollout, and his connections.) The hiring tells the investment community, Sirius' CE partners and potential retailers that Sirius is serious about being a player in the digital satellite radio market.
Granted, when Joe got up last Wednesday morning, a day after he took the top job at Sirius, its financial difficulties and its perceived No. 2 status since rival XM Satellite Radio entered the market were still there. But anyone who witnessed Joe's performance at RCA over the years, especially during the launch of DirecTV, knows that he is a force to be reckoned with. If anyone can turn around Sirius' fortunes, Clayton can.
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