Hope Springs Eternal

By Steve Smith On Aug 6 2012 - 4:01am




Maybe 18th century English poet Alexander Pope was right: “Hope springs eternal.”

That phrase surfaces every year when sportswriters follow Major League Baseball teams to Florida and Arizona for that most American rite, spring training.

Even if you are a fan of some downtrodden franchise with little chance of even playing .500 baseball, the coverage of some phenom playing like the next Willie Mays or Sandy Koufax in a couple of exhibition games makes the avid fan dare to hope that even a humble Wild Card berth might be possible for his team in the fall.

That’s how one might feel reading comments in this issue about the prospects for the CE industry as we turn our attention to the holiday selling season.

But it’s August. And we did not interview daydreaming fans. We spoke with a bunch of veteran retailers, distributors, and a handful of manufacturers that are players in an industry even more competitive than baseball — consumer electronics.

They beat themselves up about the industry’s thin margins during good years. They have suffered through the worldwide economic meltdown since 2008. They have experienced lower profits and volume and seen how the retail dynamic has changed with Best Buy being battered and Amazon seeming to be the future of retailing.

Are they cockeyed optimists? No. Realists? Probably.

For example, Jeannette Howe, executive director of Specialty Electronics Nationwide (SEN), a division of the Nationwide Marketing Group, said in a story on the second half — written by senior editor Alan Wolf — that “We have seen a resurgence in larger-panel television sales, and when a larger TV is purchased, we are far more likely to see the audio system add on.”

An IHS iSuppli report from last week said that average retail prices on U.S. flat-panel TVs rose for the first time in two and half years, up 3 percent during the second quarter and 9 percent from the same period a year ago. Bigger screens and more features may be the cause, but could UPP programs be working?

Also driving sales this fall will be the Windows 8 rollout, which will effect everything from tablets to accessories and notebooks; more tablets; the inevitable Apple iPhone 5 (but probably not Apple TV); and the continuing popularity of headphones.

But nobody is singing, “Happy Days Are Here Again.” In his tour of many of Sony’s top retail partners, Mike Fasulo, executive VP and head of its sales organization, said the challenges are clear: “We must excite the customer again about the possibilities of our industry’s products and not simply compete for dollars at the expense of value.”

In the past couple of weeks, two industry veterans have re-entered the fray. Eli Harary has returned to the home audio market to launch a new luxury brand of audio and entertainment products called AudioXperts, and George Manlove, former CEO of specialty chain Vann’s, has joined Velodyne Acoustics as sales and marketing VP.

Hope is wonderful. And there are opportunities out there. But plenty of work still needs to be done.

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