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NPD: CE Growth Will Be Slow

8/27/2008 02:13:00 PM Eastern

San Diego — After a decade of healthy growth, consumer electronics will see only a minor increase this holiday season and through all of 2009, due not only to a shaky economy but to changes in the industry itself.

That is what Steve Baker, industry analysis VP for the NPD Group said in a in a keynote address at Fall RetailVision 2008, which ends here today.

As key products such as home DVD players, printers, desktop PCs and even MP3s players near peak household-penetration levels, the industry is left wanting new technology to drive growth in the future, Baker said.

He predicted 1 percent to 3 percent growth for the fourth quarter this year and all of 2009, which is slower than the annual 6 percent and higher increases enjoyed by CE for the past 10 or 12 years.

Home DVD players are now at a household penetration level of 85 percent, printers at 85 percent, desktop PCs at 84 percent, MP3 players at 50 percent, flat-panel TVs at 53 percent and notebook PCs at 48 percent, said Baker, adding the average home has 2.2 PCs.

The remarks at RetailVision signified the event’s new focus on industry education and research in addition to its role as a place to introduce new accessories to retailers. The show attracted more than 550 participants including 200 retailers — about the same number as last year.

The Consumer Electronics Association (CEA) also presented a study at RetailVision showing that electronics retailers are shifting toward such non-traditional chains as Cabela's, a sporting goods store.

A CEA study found that 25 percent of people would be willing to buy their CE products from Starbucks, 30 percent from Ikea, 40 percent from Bed, Bath and Beyond and almost 60 percent from Home Depot.

"Electronics have become so pervasive that consumers are looking to buy these devices wherever they want,” said Tim Herbert CEA research senior director, adding, "No [retailer] is safe. If you don't reinvent yourself, there are retailers looking to capitalize on the vulnerability of CE retailers."

But RetailVision is also about products and retailers. Some of the key new products just hitting the market include a $159 computer keyboard with a built-in scanner from Keyscan, one of the first notebook stands with built-in iPod dock and speakers from Lifeworks, and an accessory that adds voice activation to an iPod (with an iPhone version in the works) from Innotek.

Retailers recognized at the event included Micro Center, Hilliard, Ohio, which won the Retailer of the Year award after posting 150 percent growth in revenue from 2005 to 2007. Other award winners included e-tailer Newegg.com, City of Industry, Calif.; Datavision, New York; PC Universe, Boca Raton, Fla.; ProVantage, North Canton, Ohio; and Ritz Interactive, Irvine, Calif.  Please visit www.TWICE.com and see our next print issue for more details on RetailVision.

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