Merchants: More Than Just TVs In Santa's CE Bag

NEW YORK — Just in case anyone forgot, there's more to holiday merchandising than just stocking flat panels.

Dealers and distributors contacted by TWICE pointed to a host of CE devices that are expected to top best-sellers lists come Christmas, although some, like high-definition DVD players, may be considered add-ons to the core LCD purchase.

Circuit City for one — once a spokesperson moved past flat panel — cited notebook computers, video gaming, digital imaging, portable audio and navigation devices as the biggest anticipated hits of the coming holiday season.

Crutchfield's merchandising executive VP Rick Souder said the biggest holiday hits will be continuations of trends from last year, including portable navigation and "all things iPod," and, of course, large-screen flat-panel TVs.

"However, there are some other exciting, albeit smaller technologies that will show substantial growth," he noted, including HD camcorders, built-in car HD Radios, at new low price points, and satellite video for the car from Sirius.

Alex Paskoff, marketing and business development senior VP for wireless distributor Brightpoint, predicted that "multimedia devices that effectively deliver a rich media experience will be in high demand this holiday selling season." He pointed to Apple's recently-launched iPhone and said, "Every OEM will be challenged to deliver their answer to what the consumer is asking for in an integrated device."

Abe Yazdian, secretary, treasurer and chief merchant of Electronic Express, the Nashville, Tenn.-based brown- and white-goods chain, said portable audio players in general, and iPods in particular, will be key components in his fourth quarter assortment. "They help drive traffic," he said.

Yazdian noted that hard disc drive units will far outsell flash drive models due to their greater capacity, and praised Apple for "taking the audio business up and driving that market. Bless them."

Interestingly, he also included major appliances among his potential holiday best sellers. "It surprised us too after we entered the category three years ago, but some people do buy appliances in the fourth quarter as a gift to the family or for their [grown] children."

While Bill Lyons, VP and general manager of distributor Cardinal Electronics, agreed that flat panel will drive the fourth quarter, the key category for both distributors and retailers, he said, is the accessories. "You need to add the cabling, mounts and/or furniture to the sale in order to keep margins per invoice up."

Rob Kalman, U.S. marketing VP for distributor SED International, anticipated high demand for digital picture frames, MP3 and MP4 players, and navigation devices.

Additionally, he pointed to the computer and storage categories as having good fourth quarter potential.

"We particularly expect notebook computers to be strong with opening price point products leading the way, but also high-end, souped-up systems with Vista Ultimate showing some nice movement," Kalman said.

He added that the retail market for external storage "has really been heating up lately and the options for consumers should be very enticing come the fourth quarter."

Storage, he observed, "still has lots of room to grow on the CE retailer shelves. Most carry flash-memory card products, but relatively few have started offering hard-drive-based external storage products, leaving most of the business to computer, big-box and Internet retailers. The demand here should be very strong this holiday season, but beyond that, the retailer has the opportunity to introduce their customers to these products and actually create some demand."

Kalman also noted that SED is watching how the Blu-ray and HD DVD format war is playing out, although "the price, content and format confusion issues may prevent [them] from becoming winner[s] until the 2008 holiday season."

Others beg to differ. Said Jim Ristow, general manager of the Home Entertainment Source specialty A/V buying group: "We anticipate very aggressive price moves for the holiday season that will stimulate sales and kick both formats into overdrive" — dependent, he cautioned, on content availability. "We haven't seen an abundance of software just yet."