Phoenix Indeed
By Steve Smith -- TWICE, 10/26/2009
The Consumer Electronics Association (CEA) held its annual Fall Forum in Phoenix last week, and it was an appropriate venue for some observers. Many would like to see retail margins, and sales volume, rise from the ashes of this recession like the mythical bird this city was named after.
There was some hope to start the week: CEA's Holiday Sales and Forecast predicted an 8 percent gain in CE gift giving. One hopes its crystal ball is clear on that point.
The sessions I attended and participated in — especially last Tuesday — showed that, by and large, consumers still love the CE industry. They just don't want to pay full price for its products ... especially during a recession and especially when unemployment and the fear of losing a job looms large nationwide.
For instance, Steve Koenig, industry analysis director of CEA, reported on a study showing that those who know about 3D video for the home, 15 percent are willing to buy it for no more than $200 extra than today's TVs. 3D HD won't provide “an epiphany of addition revenues” at least in the short term, he said. Still, 3-D HD will get the CES spotlight in January, so who knows.
Koenig and Eric Voyer, VP of TraQline-Stevenson (the latter being the firm that works with TWICE on the CE Top 100 Retailers Report) said in a panel on the “Churning Waters of CE Retail” that the quest for value is now part of the new norm. Discounters and online retailers will gain; price deflation is rampant on a lot of categories retailers have relied on for margins, but that service is an opportunity.
Their findings are basically across the board for a variety of key categories for the foreseeable future. That seems to be an old message, except for the fact there are more mature categories out there now, price cuts are deeper, competition is worse and fewer consumers willing to spend more on upscale products.
At the end of the day, yours truly headed up a discussion of “The Future of Retail” with Jeannette Howe of Specialty Electronics Nationwide, Dave Workman of PRO Buying Group and Darold Rydl of Woot Wholesale.
The bottom line of our discussion (which hopefully will be online at www.TWICE.com and or at www.CE.org soon) is the bottom line. Successful CE retailers of any size must reinvent themselves by using social media sites to get close to their customers and being more accessible and accepting what might not be typical CE products — home systems that not only control A/V functions, but major appliance usage, energy storage conservation and LED lighting are some.
After all, 30 years ago, who would have thought CE chains would sell PCs, video games and wireless phones? As Howe said last Tuesday, CE retailers are “chameleons.”
Maybe these chameleons will become a phoenix flock this time.
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