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Numbers Can Be Deceiving

5/23/2011 12:01:00 AM Eastern
That’s a heck of a headline to put on this column considering all the work TWICE, in partnership with The Stevenson Company, did in preparing this year’s TWICE Top 100 CE Retailers Report, which is traditionally one of the most awaited features we do each year.

But more than a few of you know what I’m getting at.

 Amazingly this year’s Top 100 CE Retailers rankings, which track the prior year’s annual sales, show that about two and a half years into the “new normal” economy CE sales grew 5.8 percent at retail during 2010.

More than a few of you – retailers, manufacturers and distributors – have to be scratching your collective heads saying, “How can that be possible? Our business was ‘X’ last year? How can it be in a year that Bernie’s, Ken Crane’s, GameCrazy, MeyerEmco, not to mention Flanner’s and most recently Ultimate Electronics have bitten the dust?”

No, believe me, I am not second-guessing the great work that Bob Tancula and his team at Stevenson, or our own Alan Wolf, or even yours truly did in gathering and vetting this list. Remember every year our Top 100 measures the entire CE retail industry, not just the usual suspects.

The industry has changed, once again, to no one’s surprise. But the new products that were ascendant in 2010 and continue to be are smartphones and iPads. What’s different about the industry’s technological changeover this time as compared to many others we have seen is that more new suppliers have come in to dominate, vs. traditional brands.

The same thing is true on the retail side. Barnes & Noble, on the strength of its Nook e-reader, in the words of Alan Wolf  “blasted its way onto the rankings,” at No. 66. But that’s nothing compared to the new No. 4 on our list, Amazon. com, with a 72 percent increase in sales that now has both Walmart and Best Buy looking over its shoulders.

And of course the company from Cupertino, Calif. that seems to be an industry inside of an industry. It had a 26 percent gain in CE sales based on the popularity of iPad, iPhone, iPod Touch, etc., making it the No. 3 retailer in our Top 100.

Since International CES in January, almost starting with our annual retail roundtable in Las Vegas (which appeared in our Feb. 21 issue), in just about any discussion TWICE has had with industry leaders, some lament at the state of the industry. Others have said – and shown with their actions – that companies have to embrace this change to survive and thrive.

You can’t do anything about macro-economic trends, or the rising price of gasoline and other commodities, and you can’t do much about unemployment. (Although hhgregg is doing a helluva job on its own, hiring plenty in its expansion drive, isn’t it?) Here’s a reminder about the nature of this industry from CE Hall of Famer Joe Clayton, who was just hired as DISH Network’s president/CEO (see p. 4). He told TWICE last week, “Technology always changes the landscape so that is nothing new... But for the consumer we have to provide better value, enhanced services … really adding additional services to the equation. I see these technology changes … as an evolution.”

Amen.
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