Diversity Of Top CE Retailers

During a war, concerns about terrorism, a lackluster general economy and worries about unemployment, the TWICE Top 100 CE Retailers generated $106.6 billion in sales during 2003, which is a record and represents a 5.9 percent increase over 2002.

That's a heck of a performance and a tribute to the consumer electronics industry, whose products and technologies continue to inspire the imagination and the shopping appetites of Americans of all ages.

As for the tonnage of sales that the Top 100 generated in 2003 and over the past several years, it is not surprising. Any group that has Best Buy, Wal-Mart, Circuit City, Dell, Target, RadioShack and many of the other elite national chains of this country has got to do plenty of business, given their expertise and the quality of the CE products they are selling.

I guess what's interesting to me, since I've helped compile various types of top CE retailer rankings over the years, is the diversity of the types of retailers that make up the Top 100.

What do I mean? Take a look at the list, starting with the top 10. Who would have thought 10 years ago, or even five years ago, that computer/home office-type retailers Dell, Staples, CompUSA and Office Depot would be in the top 10 and Sears wouldn't? (Don't cry for Sears. They are ranked No. 11 this year.)

And of course the CE universe hasn't imploded since discounter Wal-Mart and its sibling Sam's Club have made the top 10. (Of course many of their top 10 and top 25 national competitors are watching carefully and are concerned.)

But the real surprise when you go down the list is the retailers with national or quasi-national stature that really specialize in one category, yet they make the list. I think Apple Computer Retail Stores jumped to No. 23 for one reason — the iPod. Wireless Retail did $400 million in sales last year, and it had better than 2,300 or so stores nationwide.

All the talk in this industry over the past few years has been about HDTV and upscale digital products of all stripes, and how commodity products kill the industry. Believe me, I'm not picking on national drug chains, but how does Walgreens ($250 million at No. 42), CVS Pharmacy ($197 million at No. 48), Eckerd ($90 million at No. 70) and Rite Aid ($70 million at No. 76) generate so much volume? Of course they have tons of outlets nationwide and sell tons of batteries, but they also sell accessories and J-hooked commodity CE products. With high risk for manufacturers and very low margins, there is still a market for that stuff.

If you analyze the Top 100 report, and you're a regional retailer looking for clues to the success of this group, you might find your head spinning. There isn't any one way to be successful in CE retailing, or any one way to improve your distribution.

The types of retailers that make it big in this industry are tremendously diverse. In fact, just about as diverse as the many technologies which drive this wonderful and demanding business.

And one more note: our thanks for compiling this year's report go to principal analyst Paul Zorfass and his team from First Technology, and our own senior editor Alan Wolf.