First-Half Surprises

By Steve Smith -- TWICE, 6/21/2004

Well, believe it or not, we are at the midpoint of the year. Or look at it this way, we are about six months until International CES 2005 opens in Las Vegas. With memories of this year's CES so vivid it doesn't seem possible that six months has passed, but that marks the speed of the industry.

Much has happened in the first half if you have the time to look back. Highly visible executives moved from one company to another; several key retailers have changed their merchandising strategies; and more innovative products and important categories are being introduced for second-half sales than ever before.

You might not have the time to look back at what's happened during the first half, but that is our job at TWICE. And not only that, we have to take a look and ask the industry what to expect during the second half and how those trends will effect business. That will be the focus of a special issue to kick off the second half, on July 12. "State Of The Industry — A Mid-Year Report" is a paper-wide project that will discuss what went on during the first half and what we should expect in the second.

The report will include interviews with some of the industry's top executives and reminders that some of the top products that we saw at CES or during line shows in the spring will first appear on retail shelves by fall.

While there is plenty to talk about when discussing the first half, a few unrelated things happened during the past couple of weeks that were surprising. If you missed it, CEA reported that audio sales were up during the first quarter. That's right AUDIO, with CEA saying it's possible for the category to have the first annual increase in sales after three consecutive years of declines.

With everyone in the industry wringing their hands about the audio situation in the past couple of years, some have tried new approaches to jump-start the industry … and make a few bucks for their own company. One is Monster Cable, whose "head monster" Noel Lee jumped into the high-end audio component business at the recent HE2004 Show in New York. The program is a turnkey merchandising and sales training program called Monster Reference Home Theater Music Experience. Will it succeed? Who knows, but you've got to give Lee and his company credit for enthusiastically taking a chance.

Then, of course, there is Sears. In consumer electronics the retailer's fortunes over the past couple of years have been disappointing. They saw the need to revitalize their CE franchise and went out and picked an executive with plenty of experience to do just that: Tasso Koken. A man with a distinctive name and a 25-year career in CE retail, Koken spent 15 of those years with the legendary Wiz chain, based in the New York City metro area. Things around Sears won't be the same.

And finally there is Samsung. I attended the Four Seasons of Hope awards presentation at Cipriani's in Manhattan a couple of weeks ago. (See story and pictures on p. 51.) If you told me five years ago that Samsung would be able to pull off a glitzy, star-studded event like this that not only helps various charities, and keeps its brand name in the forefront of consumers' minds, I wouldn't have believed it.

Around five years ago Samsung saw the future — digital products — and came up with shrewd marketing strategies and technologies to go from being a commodity supplier to a top-line manufacturer.

Anything can happen in this business, and it usually does. It makes for an interesting way to make a living. Have a good second half.