Stores Eye Double-Digit Holiday Gains

By Amy Gilroy On Dec 4 2000 - 8:00am

After a sluggish fall, retailers are hoping for a strong Christmas, with some specialists and regional chains expecting sales increases of approximately 10 percent.

Driving the gains this Christmas will be mobile multimedia, low-end CD players and remote starters. Some specialists are also banking on gift items such as car performance accessories.

Not surprisingly, the biggest increases are expected in mobile video, with many retailers expecting 10 and 50 percent increases over last year's Christmas season in that segment.

Boomer McCloud, Newington, Conn., is expecting a 50 percent increase in mobile video this season; Santa Fe Autosound, Overland Park, Kan., expects a 25-30 percent gain; and Discount Autosound, Virginia Beach, Va., anticipates a 30 percent gain in car video this Christmas over the same period last year.

Myer-Emco, Gaithersburg, Md., expects the segment to increase by about 25 percent, and Ovation Audio, Indianapolis, is planning on double-digit gains in car video this holiday. For the year, Stereo West, Omaha, Neb., will be up 200 percent over 1999-"and we just see it getting bigger," said owner Joe Cavanaugh.

However, retailers are calling for slighter overall gains this holiday, with much of the focus on less profitable low-end CD players. Hot products will include "a new mobile-video-in-a-bag piece from Audiovox, remote starters, and CD players under $200," said Marc Spatz, buyer for Tweeter etc., Canton, Mass.

"Now that El Nino and El Nina are over, we're going to have a cold winter and remote starters will be very popular, more popular than before because the winters have been so mild. So we're going to put a lot of emphasis on that as a gift," said Stereo West's Cavanaugh. "Also, video looks very strong."

Russ Cunningham, an Ovation Audiobuyer, said, "I think it will be a traditional Christmas, we'll see a trend to low-end CD players and low-end merchandise in general."

Retailers are already seeing signs of possible shortages this Christmas in leader CD pieces, due to the dearth of chips experienced by the consumer electronics industry as a whole.

"One vendor is sold completely out. Alpine's low-end piece, the CDE-7853, is gone," said Cunningham. "Mercifully, we're in a position to hedge that, but I know that some dealers are going to find themselves in trouble."

Mark Scrivner, co-owner of Sante Fe Autosound, said, "In-dash AM/FM/CDs are drying up from a lot of vendors, including Clarion and Sony. It's across the price range. Fortunately, I bought heavy and early, so I think we'll be OK."

Some retailers, including Boomer McCloud and Ovation Audio, said they are upping their ad budgets this year, and many specialists are running private sales.

"We're staying with things that worked well in the past," said Scrivner. "We do a preferred holiday sale, after hours, by invitation only. just before Thanksgiving. We can do anywhere from five to 10 days of normal business over two nights. We follow that up with a gift-suggestion mailer in early December, and a radio and cable TV advertising schedule."

Some dealers are trying new ideas. Stereo West, for example, is pushing car/truck accessories particularly aggressively this Christmas and during the first quarter next year. "We think the new blue headlights are going to be extremely popular," said Cavanaugh, explaining, "We've been doing automotive accessories for a year and a half, and we're starting to get very aggressive. What's happening is the typical car audio customer, a male 16 to 24 year old, is getting into the cosmetics of their vehicle. The car is becoming a fashion statement.

"Even the lights, what's very popular now are the clear corners where we replace the taillights with clear corners instead of solid red, they have some red reflective circles and the rest is chrome and clear. It dramatically affects the look of the vehicles. Pedals and shift knobs are perfect for gifts. Kids are color coordinating the pedals and the shift knob, even the dome light."

Though not until March, Cavanaugh is planning to run soundoff-type contests for accessories modifications to the vehicle and will hold "SLAM events"-an acronym for Sound, Look And Modifications-where "we're going to judge cars based on SQ but also on cosmetics and performance of the vehicle. People get points for what they add: cold-air intakes, different headers, customized exhaust, all the things which add horsepower to the vehicles. I see that over a five-year period, this could become 50 percent of our business."

Mike Cofield, president of Custom Sounds, Austin, Texas, said his Christmas strategy is to focus on step-up products and "when the others run out of the low-end products, you can promote good-margin products. So you are making money when everyone is shaving costs."

MERA director Rick Mathies pushes the private sale as a key selling tool for Christmas. Noting that holiday buying usually doesn't start until the 10th of December, he said a private sale that first week of December can help kick start the season.

"If you just advertise on general radio, people are still not in the buying mood," Mathies maintained. "People go to the malls around Thanksgiving but not to the specialist. If you send out a mailing to your database saying, 'we have special prices just for our best customers' it seems to work wonders."

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