Misplaced Audio Priorities?
Retailers’ audio promotion priorities are MP3 players, home theater in a box (HTiB) systems, A/V receivers and MP3-docking speaker systems, in that order, based on the frequency with which they place the products in their run-of-press newspaper ads and newspaper circulars. That’s based on an analysis of IFR Monitoring data supplied to TWICE (see table below).
Based on the sales volume of those categories, however, retailers’ audio promotion priorities might be misplaced. Here’s why:
IFR tracks advertised pricing, promotion and product placements by more than 2,000 retailers in the U.S. and Canada.
During the 12 months ending Sept. 2008, IFR found MP3 players to be retailers’ most-advertised audio category, exceeding the next most advertised category — HTiB systems — by a ratio of about 3:2. That’s logical. Factory-level sales of MP3 players will hit about $6 billion in 2008, up from only $424 million in 2003, whereas HTiB sales will hit only about $940 million, according to CEA’s mid-year forecasts. Retailers are logically spending more to advertise a larger, high-growth category that will generate more traffic.
Using the same criteria, you’d think retailers would be advertising MP3-docking speaker systems more aggressively than they have been, but they’re not. MP3 docking speaker systems were advertised only 43 percent as often as HTiBs, IFR found, yet the docking-speaker market is larger than the HTiB market ($1.1 billion vs. $940 million at the factory level, based on CEA’s forecasts for 2008.) Retailers are certainly getting a lot for their advertising buck when they advertise docking speaker systems, but how many more speaker docks could they sell if they advertised the high-demand products more aggressively.
What are your thoughts?
Retailers’ Audio Promotion Priorities
| 12 Months | 12 Months | ||||
| Ending Sept. 2008 | Ending Sept. 2007 | ||||
| MP3 Players | |||||
| Total Ads | 93,623 | -10% | 104,003 | ||
| Total Brands | 77 | 1% | 76 | ||
| HTiBs | |||||
| Total Ads | 54,367 | 0% | 54,399 | ||
| Total Brands | 32 | -29% | 45 | ||
| AVRs | |||||
| Total Ads | 27,758 | 5.30% | 26,371 | ||
| Total Brands | 23 | -11.50% | 26 | ||
| MP3 Speaker Docks | |||||
| Total Ads | 26,730 | 17.00% | 22,927 | ||
| Total Brands | 86 | -7.00% | 92 | ||
| Source: IFR Monitoring, Niagara Falls, N.Y. | |||||
| Based on newspaper-ad placements (ROP and inserts) by more than 2,000 retailers in the U.S. and Canada. | |||||
Chief commented:
It's clear that portable digital media players and video-based
products are driving sales, which is why retailers are gravitating
in that direction. iPod speaker docks, while profitable, are not
driving people into the stores at the same rate as AV products and
accessories. I think the retailers have it right this time.
Chief commented:
paul commented:
Think beyond audio! Sure it's not high-end surround sound, but an
HTIB system is connected to a high definition television and also
provides an upselling opportunity to an AVR and speaker system for
those customers with more advanced needs. And then there are the
add-ons such as a Blu-ray Disc player and lots of accessories such
as connection cables, surge protection, furniture, and installation
services.
paul commented:



















