Whenever you speak to a lot of distributors in this business, you get plenty of opinions on what’s hot, what’s not and what are opportunities for their retail customers.
The TWICE Distributor Holiday Preview, which begins on p. 16, is an exception. The nine executives we spoke with were uniformly positive about prospects for sales growth and, yes, profitability during the fourth quarter.
Five years after the economic meltdown, which Wall Street and Washington greedily stumbled into, distributors expect holiday sales to be at least good, if not strong. That’s based on continued demand for smartphones, tablets, headphones and new gaming formats. TV sales will get a boost from new OLED models, as well as Ultra HD, as they roll out at premium prices for the first time.
Speaking of pricing, distributors think Black Friday will be Black Friday — plenty of promotions but no more than last year. Unilateral pricing policies (UPP) of top brands are working, due to ongoing policing by suppliers and adherence by retailers.
It isn’t just distributors that are looking on the bright side. Three stories we reported on TWICE.com last week show that.
The Consumer Electronics Association is predicting total retail sales for the November through December holiday sales period are expected to increase by 4 percent over last year. And the International Council of Shopping Centers reported that holiday sales are expected to rise 3.4 percent year over year.
Looking beyond the fourth quarter, specialty electronics retailers and custom installers seem more bullish about their prospects, if CEDIA Expo was any indication. Attendance at the show was up 5.9 percent compared with last year. CEDIA said systems integrators reported they expect gross revenues to be up 16 percent during calendar year 2013.
Even the ever-cautious Dave Workman, Pro- Source president and CEO, told TWICE at CEDIA that the overall selling season may be “a little bumpy this holiday season,” yet he noted, “The overall numbers, I think, will show well, but it depends on the categories you’re playing in.”
Speaking of categories, distributors are adding new products — both CE and non-CE categories — with everything from wearable electronics to mattresses, outdoor home goods, health and fitness and a few categories in between.
The distributors are reflecting the wants and needs of their retail customers, who have learned since the economic crash of 2008, which we are still digging out of, that diversification is the key.
In discussions the past couple of weeks, industry executives from a wide variety of political persuasions hardly mentioned the possible harm a government shutdown or the implementation of Obamacare as hurting holiday sales prospects or the economy as a whole.
But it seems as if a prolonged shutdown of the federal government may be the only cloud on the horizon. Let’s hope for the impossible — that cooler heads prevail in Congress and that they finally do their job and pass a budget everyone can live with. Now that would be a holiday gift everyone would welcome about now.