Glass Half Full, Or Half Empty?
By Steve Smith -- TWICE, 10/27/2008
Maybe I'm just a “glass half-full” kind of a guy, but the Consumer Electronics Association (CEA) released its Annual CE Holiday Purchase Patterns study last Monday predicting a 3.5 percent increase in CE sales during the fourth quarter.
Yes, I said increase.
I know. Given all the economic carnage around us how is that possible? Is CEA just trying to spin some headlines for the industry?
Well this consumer survey (via phone and online) was performed when the worst of the bad economic news broke. CEA's study has historically been an accurate barometer of what to expect during the fourth quarter, so that 3.5 percent increase looks like a fairly good number.
But before anyone accuses me of getting euphoric, the devil is in the category-by-category details. Half of that growth contribution for Q4 CE sales is from mobile phones, which is great for those of you who sell them. (See chart on p. 14.) The only other category with a better-than 1 percent growth is audio/video (which includes HDTV, MP3 and camcorders) with a 1.1 percent increase. The other six categories either are going to be up less than 1 percent or down.
It's not a grim picture, but it is a realistic one, especially for those retailers who have told TWICE this year that if your sales are flat or up a percent or two, you're a hero. Take a look at some of the comments from Home Theater Specialists of America members (see p. 1) to see what I mean.
For instance, HDTV is going to be popular this quarter, but probably less so in volume and definitely less in margin, given these tough economic times. Families may splurge on one big present for everyone, but when they shop for HDTV this fall, in the shadow of the DTV transition coming in February, they will look for value. Those brands and retailers that provide it will be winners.
On the “glass half-empty” side are the U.S. Commerce Department and the National Retail Federation (NRF), which showed that consumers all but stopped shopping in September and economic concerns may temper the usual holiday cheer. NRF is predicting that holiday-related shopping this year will be up 1.9 percent this season, the lowest increase since that survey began in 2002.
Getting back to the CEA survey, it strikes me that the survey matches up with opinion by industry veterans that CE sales holds its own or goes up in times of economic trouble, as families entertain themselves at home.
The CEA study also showed that CE accessories, which provide add-on products to improve items in just about every category, are described as being the most likely to be purchased as gifts, or as some accessories makers have told me in the past, “We are recession-proof.”
During a time of unprecedented economic turmoil that is far rockier than any in recent memory, we will see if the CE industry can maintain its traditional popularity with consumers.
No related content found.
Featured Company
-
Webcollage
WebCollage, the world's leading provider of rich product information to retailer web sites (and their mobile visitors) perfected a new form of channel-marketing by helping manufacturers instantly publish content that increases sales, reduces return rates and improve conversions b..more
VIEW ALL GALLERIES