Broad-Based CE Growth
By Steve Smith -- TWICE, 5/8/2006
It must be spring because the TWICE Top 100 CE Retailers report has finally arrived, amid the usual number of phone calls and e-mails to our offices from analysts and industry-types who want to “make sure” the list would appear in this issue. Or some try to call in old favors and get an early peek at the numbers. (To no avail, I might add.)
After working on such top retailer lists over the years, I've learned that this type of report is the least subtle. This isn't about the most profitable retailer, the most cutting-edge dealer, the best merchant or any other measurement. It's about retail muscle — who sold the most CE products in dollars for the previous calendar year.
What struck me when I first looked at our report was that for 2005 the TWICE Top 100 CE Retailers dramatically crossed the $100 billion dollar mark, to $108.5 billion, a 10.9 percent increase over 2004.
That's fine. The big usually get bigger when an industry is booming, and the consumer electronics industry is booming across the board, led by HDTV and followed by MP3 players (read “iPod”), cellphones, digital imaging products of all types, computers, accessories and others too numerous to mention. But when you visit as many buying groups and talk to as many independents as we do, the smaller guys are also growing like gangbusters.
There is a group that could be called “the newcomers,” retailers of all stripes that either never appeared in our report before or didn't appear last year because they didn't have the sales power to crack the Top 100, didn't meet our criteria for a CE retailer or just flew under our radar. There are 16 “newcomers,” some who are Web-only operations; others that some will not be familiar with; and others like Ken Crane's and Home Theater Store, just to name two, that are quite familiar to TWICE and our readers.
And then there are certain types of mass retailers who you'd never even think of as consumer electronics retailers, yet they have enough storefronts nationwide or are visible enough on the Web or TV to sell plenty of product. Kohl's, Walgreen's, Home Depot, Big Lots, Shopko, QVC, among many others fall into this group.
What I think most of this means for the consumer electronics industry as a whole is that its recent growth is broad based. While many will continue to wring their hands about eroding profit margins, more commodity products, manufacturers competing against their own retailers, national chains getting larger and the like, consumers continue their love affair with CE. And they seem to like the fact that they can buy CE products from a wide variety of retail channels. Whether or not vendors and dealers love that trend is a topic for another time.
Any other industry would be thrilled with double-digit sales growth. The CE industry should enjoy this boom while it lasts ... and figure out a way to tack on a couple of extra points whenever and wherever it can.
I'd like to thank our vendor partner, The Stevenson Company of Louisville, Ky., that helps prepare the TWICE Top 100 Consumer Electronics report, and to Bob Tancula and his team. At TWICE I'd like to thank senior editor Alan Wolf, managing editor John Laposky, associate editor Lisa Cervini and graphic designer Desiree Nunez for another job well done.
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