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Better Fatten Up The Reindeer: Retailers See A Busy Q4 Ahead

TV, connected home to lead the holiday hit parade 7/10/2017 08:00:00 AM Eastern

For born-and-raised New Yawkers old enough to remember Crazy Eddie, the long-gone retailer’s “Christmas In August” ads are indelible.

The spots featured radio DJ and pitchman Jerry Carroll on a beach in a Santa suit, surrounded by stacks of inventory. To paraphrase his hysterical rant, “The sidewalks are melting, the sun is hot, so what better time for a Christmas In August super blowout sale!”

But as retailers and consumer goods manufacturers are aware, summertime and the holiday season are only incongruent to civilians. For the rest of us industry types, sun and surf are simply reminders that Black Friday is just around the corner, and that there’s no time like the present to start thinking budgets, strategies and buy-in plans for the quarter to come.

Taking a cue from Eddie and moving it up a month, TWICE herein presents its annual “Christmas In July” feature, in which industry retailers, buying group execs and national distributors share their pre-holiday thoughts and expectations. While there’s no telling which way the tech and appliance winds will blow by December, one thing’s for sure: There will be a holiday season, and retailers had better be ready.

TV, Connected Home To Lead The Holiday Hit Parade

TWICE: Which product categories will be the top-sellers this coming holiday season?
Chad Harper, buyer, Bjorn’s Audio Video: We are expecting TVs and wireless audio to be some of the strongest categories during the holidays. The trend we anticipate most will be the continued increase in size of the “regular-size” TV. Most of our customers now go for a 65-inch TV for their main TV.

Outside of a new product that has yet to come to light, we don’t expect a breakout product or category this year. We have seen more of an overall surge across all categories during the holidays in recent years.

Trevor May, executive director, vendor management, D&H Distributing: From a sheer dollar volume standpoint, we expect laptops, televisions and gaming to be the winning categories. I also expect to see strong demand for voice-command products, connected home, and virtual reality this holiday season.

Hank Alexander, director, Home Technology Specialists Nationwide (HTSN): The connected home in general, and specifically Nest, the Works with Nest partners, and voice-controlled AI like Amazon Alexa and Google Home, will lead the way as top-sellers this coming holiday season.

Brick-and-mortar retail will be critical for sales of products in the connected-home category. The value our members bring to the space integrates much more than the products themselves. Our focus is on the experience, and on helping the consumer understand how the parts and pieces work together. Showing the experience and telling the story of how these products all work together will help our retail members capitalize on this fast-growing market.

Rick Souder, merchandising executive VP, Crutchfield: High-end TV, Apple CarPlay and Android auto car receivers, and voice-controlled multi-room speakers.

Fred Towns, president, New Age Electronics: We have high expectations for the connected-home category this holiday, especially around voice assistants like the Amazon Echo and Google Home and add-ons that connect to them. Gaming will be another hot category with manufacturers releasing new products in both PC and console gaming.

Within the personal computing category overall, gaming computers are one of the fastest growth areas and will be an exciting component of the holiday season. We also expect new drones to be released, which will help bring consumers in stores and create a buzz at retail.

Dave Workman, president/CEO, ProSource: The top sellers this season will be DIY home automation products and specifically the voice- control products from Apple, Google and Amazon. In addition the 10th generation iPhone will be a huge seller.

We will see some incremental growth in the high-performance TV products as the promotional calendars kick into high gear, with a specific emphasis on OLED and the new Samsung Frame models. I also believe we should see some incremental gains in 4K Blu-ray, as early adopters make purchases to gain access to this content. Multi-room and Bluetooth audio products, including headphones, should have another strong season as well, as people are trading up from their wired product to wireless in significant numbers.

Warren Chaiken, president/CEO, Almo: Historically, small appliances and TV are our top sellers for the holiday season and we anticipate this will continue for the 2017 season.

The major appliance category is another strong holiday seller. Due to extended promotional periods and with current housing trends, we believe major appliances, particularly laundry and refrigeration, will achieve top-seller status again this year.

Doug Wrede, electronics director, Nationwide Marketing Group: We anticipate that TV will continue to be top-of-mind with the consumer this holiday, followed by the connected-home space gaining significant momentum. We also believe wireless audio will have a larger role year-over-year in holiday sales.

Merchants Preparing For A Robust Q4

TWICE: Will you be planning aggressively, conservatively or somewhere in between?

Wrede: We’ll be planning aggressively, as the holiday season is an important time of the year for our retailers. We plan to be the destination for holiday sales, and we won’t take any days off .

Chaiken: We anticipate Q4 will be somewhere in between. Based on solid first-half performance of the brands we represent, and the current calendar year 2017 industry growth trends, we have planned for solid holiday sales results.

Harper: [We’re] aiming for more of an in-between approach. We anticipate some aggressively-targeted specials from partner manufacturers that we’ll participate in deeply. Otherwise we’ll have a more realistic and measured approach in line with general business trends.

Alexander: I see an aggressive plan in place for Black Friday in the connected home. Recent reports show that big-box retailers like Best Buy are doubling down on this category, and they’re starting to see the importance in connected home that we’ve seen and been attacking for years. This year for Black Friday, I suspect you’ll see a big push from everyone, with our retailers using their years-long head start to lead the way.

Towns: Our approach to holiday planning is driven by what manufacturers are doing and aligns with overall industry expectations for the season. Given the diverse product mix coming for holiday, and exciting new product launches from leading manufacturers, we’re planning for a strong holiday season both in stores and online.

Workman: Dealers will plan according to the trends they see through September. If the momentum which is currently in place continues through the summer months and into early fall, then dealers will plan the holiday sales season according to these trends.

May: D&H plans to work aggressively with its vendor partners to bring our customers the best deals possible so everyone involved achieves their targeted goals over this crucial period. That includes retailers, e-tailers, dealers, vendor partners, and D&H as a distribution partner.

Black Friday Becoming A Holiday Casualty

TWICE: Will traffic on Black Friday proper be diminished by what’s become a month-long series of November promotions?

Chaiken: Absolutely. For retailers, we now refer to this promotional period as Black November, experiencing month-long promotions particularly in appliances and CE. Cyber Monday has become the large single-day sales event for our online fulfillment partners.

Wrede: There’s no certainty that traffic will be diminished on Black Friday, despite “Black November” now becoming a theme. Retailers will still be able to [count] on doorbusters and last-minute deals to drive foot traffic over the course of the weekend.

Workman: Black Friday traffic has already been diminishing due to the month-long promotions through November, and retailers’ positioning of Thanksgiving Day as the key doorbuster event day of the weekend. I expect that this will continue this year as it has before.

Black Friday weekend is challenging for brick-and-mortar dealers to post meaningful increases due to price compression, and as online has transferred so much of the momentum of this sales period without necessarily growing the business overall.

Towns: We’ve seen Black Friday momentum gradually diminish in past years with promotions starting earlier and running into December. This year will be no different. However, we’ll still see a strong group coming out on Black Friday itself due to holiday specials and new product launches across the hottest categories.

Souder: Black Friday traffic will be diminished but still substantial. Customers don’t seem to realize that absent a few doorbusters, most of the “Black Friday” deals are available for one to two weeks surrounding Thanksgiving. Yes, there are some headline-grabbing deals on Black Friday, but most of the volume is done in supporting deals that run for more than one day. I imagine that will continue this year.

May: Store-based brick-and-mortar traffic could be down in the wake of the numerous other promotions that now take place leading up to Black Friday/Cyber Monday. The main reason traffic may diminish in physical stores is the continued momentum of online sales. Retailers need to stay diligent in the dotcom space to avoid feeling that burden of soft sales.

We’re looking to support our customers in developing strong e-commerce strategies, serving as an online warehouse so to speak, that can help address these ongoing market forces.
Harper: I say yes. As you’ve noted, this has already begun over recent years and we don’t expect it to be different this year.

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