November Finally Arrives
By Steve Smith -- TWICE, 11/3/2008
This issue's date is Nov. 3 and if your local post office is efficient enough, you may be reading this on Monday or maybe even before the polls close on Election Day.
I wrote this last week, in October, so I'm not going to expound here about how the policies of either major party candidate for president might impact the CE industry. Gary Shapiro, the Consumer Electronics Association's (CEA) president/CEO, does just that (as well as talking about several other pressing issues) in an interview with TWICE from the recent CEA Fall Forum he hosted in Las Vegas. (See p. 1 and 14.)
The point is that October, historically the worst month for the stock market in good years and bad, is over. Maybe the daily wild gyrations may end too. (We can hope, can't we?)
On Thursday we will find out from publicly held mass merchants presumably how much damage that did to October retail sales. The Conference Board reported last week that consumers were spooked well before Halloween. Its Consumer Confidence Index plummeted to an all-time low of 38.0 since the survey began in 1985. That's down from 61.4 in September.
November means the presidential election season ends. Some think it will calm jittery markets and institutional investors enough to at least know who the next president will be and what his policies might look like.
Of course, even if that happens, it doesn't solve the worldwide credit crunch. And the days of consumers being able to use the equity in their homes as ATMs and easy approval on credit cards are over for the foreseeable future.
What all this may do to CE and other retail-oriented businesses as a predicted recession takes hold in 2009, no one can say.
But November, the beginning of the holiday season, is finally here — ready or not, bad economy or not. So, forget the catchphrase "Thank God it's Friday" — just thank God it's November.
In CE, as we reported in our last issue and provide more details on p. 52 in this one, CEA is predicting a modest 3.5 percent increase in holiday sales.
I completely agree with Gary who said during the CEA Fall Forum that CE "was once considered a luxury, but now is considered a necessity." That sentiment and the belief that during a downturn or recession consumers stay put and entertain themselves with consumer electronics will be hard-pressed to be proven true
Let's assume for a second that the industry's popularity enables plenty of retailers to sell even more units than ever before — but at a lower price. What price will the industry pay in terms of lost margins for holiday volume? How can manufacturers reinvest in new technology? How can retailers reinvest in their stores?
In the situation we are in I think many in the CE industry will take a strong sell-through for the holiday season and worry about the after-effects of shrinking margins in the new year.
No related content found.
VIEW ALL GALLERIES