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With traditional car audio sales on the decline this year, retailers are turning to mobile video as a saving grace. While statistics show that the 12 volt specialty retailer is the hardest hit by sluggish car audio sales, a TWICE poll of more than a dozen stores found that A/V specialists are also hard hit, and both are looking to mobile video to stay in the black.
Several retailers said sales would be down 20 percent to 50 percent for the first half this year compared to 2000, were it not for car video. Instead, some said overall sales this year are slightly down or flat, due to the heftier margins and strong demand for both DVD and VCP based video systems.
"If it were just traditional car audio, I would hate to even speculate how far down we'd be," said car stereo manager Ronnie McCoy of Hi Fi Buys, Atlanta. "We might be down 30 to 40 percent. That's a big portion of our business. Mobile video is the driving factor of high-end product right now. Sales of high-end head units, without video, are almost nonexistent."
"Thank God for video or it would be awful," said Daryl Jenkins, owner of Dashboard, Durham, N.C. "March and April were awful, and the shining light is video. When a DVD player, such as the Kenwood [KVT-910], has a $2,800 retail price, you make good money. It's amazing to a lot of us that people come in and spend it."
Similarly, Jeff Mathews, president of Audio Unlimited, Jonesville, N.C., said, "If you take away video, we'd be down 20 percent for the year, and when you add in the video, we're pretty much flat."
Car Stereo Warehouse, Clearwater, Fla., said sales would be down 50 percent were it not for mobile video and Audio Advisors, West Palm Beach, Fla., said sales would be down 25 percent.
According to NPD Intelect, 12 volt specialists saw a decline in traditional car audio of 25.7 percent from January through April this year, compared to the same period last year. Mobile video sales, however, were up 8 percent for 12 volt specialists for the period.
But the story of mobile video is not as bright for all classes of car audio retailers. A/V specialists actually saw a decline in mobile video sales of 6.5 percent (and a one percent decline in traditional car audio) from January through April, compared to the same period last year, according to NPD. Director of consumer electronics Jim Hirschberg said a possible explanation is that the A/V specialists did not focus on mobile video as heavily as the 12 volt specialists.
All but one of the A/V specialists interviewed by TWICE, however, said mobile video sales were up. Tweeter, Etc., Canton, Mass., said its mobile video sales were up by double digits, compared to triple digits last year, and that car audio was approximately flat. Ovation Audio, Indianapolis, said car video was up 6 percent and traditional car audio down 6 percent. Myer Emco, Gaithersburg, Md., said it was down in mobile video at present, but attributed the decline to one of its stores relocating and having an installation bay not yet completed.
Nebraska Furniture Mart, Omaha, Neb., said mobile video increases were "sky high" this year, since the chain only entered the segment last fall, according to Jay Buchanan, director/ GMM of electronics.
Conversely, electronics/appliance stores, such as Best Buy and Sears, showed the strongest growth, according to NPD, up 615.4 percent in mobile video (as many of these stores only entered the mobile video category last fall) and up .5 percent in car audio. Mass merchants, such as Wal-Mart and Kmart, showed a gain in car audio despite the rough retail environment, with a 2.6 percent increase in sales through April. These stores do a very minimal business in mobile video of less than $100,000 combined, said NPD.
Suppliers note that mobile video is still a relatively small segment of the market, in the range of 5 percent, according to Kenwood VP sales and marketing Bob Law. "But it's concentrated in the specialty channel of distribution, and clearly business in those channels is impacted tremendously by that product. There's no question that the market [for traditional car audio] is tougher than last year and prices have come down."
In other findings, NPD said car DVD dollar sales almost doubled those of VCR sales this year, although VCRs had more than double the volume in units (see chart). While some retailers said that DVD was beginning to replace car VCRs, most said that there are two distinct markets for the products. Many agreed with Dashboard's Jenkins, who said, "We have some people who buy DVD, but most people still buy the VCR if they have kids because most of the kids' tapes are on VHS."Top Mobile Multimedia Brands By Share, January - April 2001
|Brand||Unit share||Dollar share||Avg. price|
|Source: NPD Intelect|
|2001 Sales Jan.-April||Change vs. Jan.-April '00|
|Traditional car audio||$113,681,000||-25.7%|
|Source: NPD Intelect|
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.