By Lisa Johnston
New products on display at the American International Toy Fair, held in N
The controversy over new FRS/GMRS radios that offer 2-mile vs. 5-mile range is having little impact on the retail sales floor, according to leading buyers.
While GMRS has always signified 5-mile range, the definition of GMRS has been muddied recently with the launch of new 22-channel combination FRS/GMRS units that have only ½-watt power or 2-mile range even on the GMRS channels. They also sell at only $25 per pair compared to $59 to $79 for true 5-miles GMRS units.
Suppliers are concerned that these new units will dilute the margins in GMRS and confuse customers who expect a full 5-mile range (see TWICE, June 24, 2002). But retailers say this has not yet happened as most consumers don't know what GMRS is, let alone what its range is.
John Normand, communications buyer for Kmart said, "What people are buying is 2-mile range and 5-mile range, so they are looking at the range, not whether it's GMRS or FRS. When we advertise the ½-watt FRS/GMRS we just define them as FRS; we don't call them FRS/GMRS." He added that the units are selling at about the same rate as typical FRS products and that they are not diluting the price of GMRS radios. "People know they are paying for range," he said.
Best Buy says it has been selling the Uniden model 520 ½-watt FRS/GMRS since April and that "sales are brisk," according to Todd Kozee, wireless communications senior buyer. He said that it is not causing confusion, nor has the company experienced any unusual returns. "Our salespeople are trained well enough to differentiate between them," he added.
BellSouth, which sells ½-watt FRS/GMRS radios says the company has not experienced any increase in returns from customers who had expected longer range.
Rex Leatham, buyer for R.C. Willey Home Furnishings, Salt Lake City, said, "I don't think there's any public awareness that GMRS means 5 miles. Nobody's licensing them. I think on the packaging, the vendors that are selling the true 5-mile range are touting it as 5 miles."
But some suppliers say there may still be problems. For example, a 5-mile GMRS will not be able to fully communicate with a 2-mile GMRS. Said Audiovox VP of consumer goods Ralph Etna: "While there may not be an immediate problem, the range issue will certainly surface as the consumer becomes more aware that, in many cases, his low-powered GMRS units will not be able to communicate effectively with 1-, 2- and 3-watt units. Further, there is an issue regarding FCC licensing requirements for GMRS in that it is incumbent upon the manufacturers and retailers to properly identify licensing requirements, at least on outside packaging. In some cases, this is not being addressed by some producers."
Cobra senior VP Tony Mirabelli, however, took a different approach, saying Cobra will begin offering ½-watt FRS/
GMRS units with 2-mile range in limited quantities during the third and fourth quarters. He countered the notion that 2-mile radios will not be able to communicate fully with 5-mile noting this has always been an issue with 2-way communication.
"When we started off with the 15-channel GMRS radio, 7 channels were also FRS and so there was a difference in power output. Obviously the 2-watt GMRS can be farther away from the ½ watt and that's always been the case, and its never been an issue in returns or customer complaints. So we don't see any confusion," he said.
Midland, Topaz 3 and Audiovox said they will not offer ½-watt radios in the near future, with Midland claiming that most consumers would prefer the distance capability that a full 5-mile GMRS offers.
Separately, retailers said they are finding strong success with dual FRS and GMRS packs that include battery chargers or other accessories. A strong proponent of this approach is Toys 'R' Us, which said sales are brisk on an "Adventure Kit" blister pack from TT Systems that comes with two 14-channel FRS with 38 subcodes, and built-in compass and flashlight at $49.99.
R.C. Willey said it is seeing an increase in FRS bundles and claims it is doing very well with a Uniden 522 pack with charger. "This is where we're having our success, with the bundles with batteries. It helps keep the average ticket up," noted Leatham.
Best Buy also said it did very well with a dual FRS and battery charger pack last year at $70 and a current package at $60. "I think people see it as a convenience that they can get the whole package right there," Kozee said.
Suppliers also confirmed the trend, with Midland noting that it plans to expand its value pack offering next year.
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.