CEO Views From The Mountaintop

In any retail-based industry the middle of the year is always a good time to assess what worked and what didn't in the first half, and how prospects for the second half and the all-important holiday sales season looks. This is the reason TWICE decided to publish our second annual “State of the Industry” special report this issue, our first of the second half.

In going through each section of this issue you will find out in detail, and in broad brush strokes, from leading manufacturer and retail executives which categories will continue to drive volume, and the categories which will probably continue to stumble along. You'll also probably be able to read between the lines as to which vendors and dealers may have been under the radar recently and could emerge as winners by the fourth quarter.

This reporter was lucky enough recently to go to the mountaintop (Colorado Springs really) and hear what industry oracles had to say about the industry's near future. In what has become a key event on the annual CE calendar, the Consumer Electronics Association (CEA) held its CEO Summit in late June. (See stories on p. 1, p. 22.)

Panasonic's Yoshi Yamada, Pioneer's Tom Haga and D.J. Oh of Samsung participated in a roundtable during the event and CompUSA's Larry Mondry was interviewed. In both cases CEA's own CEO (and president) Gary Shapiro was the questioner and their insights provided some food for thought.

To a man, the three manufacturer CEOs were bullish about CE sales in the United States during the second half, higher oil prices, higher interest rates and other macroeconomic factors be damned. Or as Oh straightforwardly said, these factors will have “no dramatic impact on CE sales in the U.S. market.”

As for Mondry, he is worried that higher oil prices during the second half in particular will hurt consumer confidence “and will end up hurting business.” But as Mondry put it, “I may be nervous, but that's my business. What gets me excited is when P&L reports are green instead of red.”

The CEOs' biggest concern is (guess what?) lower prices. As everyone knows, higher prices for HDTVs vs. the analog versions they are replacing have been a boon to the industry. But pricing of HDTV and other categories across the board are going down faster than expected due to new competitors and new distribution channels.

Haga reminded everyone that new “technology is not free” and, “Two or three years from now we can make better products, but can we make the investment?”

That's a question that no one has an answer to, at least not yet.

In the future what Mondry hopes for on the retail side is that CompUSA, and the industry overall, begins to sell “lifestyle solutions” rather than being what he calls “a 'clerker' of products.” And he put a challenge in from of the assembled manufacturer and retailer CEOs at the Summit by saying that what the industry doesn't have “is great solution sellers and that hurts us all.”

We hope that the insights of these four executives and the insights of many other industry pros that contributed their time and opinions in the stories throughout this special “State of the Industry” issue will stimulate ideas that will help your businesses. Have a good second half.