By Lisa Johnston
New products on display at the American International Toy Fair, held in N
Guys, despite what you’ve been told you, size does matter.
When you emptied your bank account to buy her that diamond ring, did she say, “Honey, that diamond is just too big. Let’s trade it in for a smaller one.” No way. Bigger is better.
Well, the same holds true for home entertainment. Size does matter. And consumers consistently follow this rule when it comes to television purchases. The average screen size has climbed each year for the past two decades. When the price of a 46-inch LCD TV approaches the price of a 42-inch LCD, 46-inch sales accelerate. When the price of a 52-inch LCD approaches the price of a 46-inch, 52-inch sales accelerate. When consumers are given the choice of a larger screen size at a not-so-much-larger price, they more often than not buy bigger. In fact, according to The NPD Group, from January (four weeks) to February 2009, retail sales of 60-inch and larger TVs have grown by 24 percent.
More than 80 percent of unit sales in the 60-inch and larger category are DLP TVs. For the consumer looking for a true home entertainment experience, large screen DLP TV provides incredible value. Whether for games or movies or sports, large-screen home-theater TV has never been so affordable. In these difficult economic times consumers are canceling vacation plans and eliminating expensive dinners out to save money. They are staying home, spending more time with their families and are looking for ways to entertain and socialize. Hence, more and more consumers are upgrading their entertainment systems and investing in a large-screen home-theater television.
Large-screen (60 inches and larger) DLP TVs have been selling extremely well in 2009, with retail sales up 35 percent in February vs. January. DLP TV is the large screen of choice for the consumer, outselling large flat panels 5-to-1. No wonder — the average selling price of a large screen DLP is $1,545, as compared with $3785 for a large-screen flat panel. Not to mention, only about 10 percent to 15 percent of flat panel TVs are wall mounted. So for many consumers the added premium for flat is simply not justified. In addition, DLP TVs consume about one-half the energy of similarly sized flat-panel TV,s providing the consumer as much as $65/year in energy savings.
Smart retailers are capitalizing on the trend toward larger screen sizes and the performance and value advantage that large-screen DLP TV provides. Independent retailers can differentiate themselves from the big-box stores by offering their customers a complete large-screen home-theater experience. When the consumer buys a large-screen DLP TV they are more likely to attach audio and other components, such as Blu-ray, to the overall purchase. For the same amount of money as a flat-panel TV, the consumer can buy a large-screen DLP TV as well as the audio and video components that complete the home-theater package. This creates strong value, which clearly resonates with consumers in this tough economic climate. Not to mention, these audio and video attachments require cables, installation and perhaps other accessories, all of which raise the overall margin on the sale for the retailer. So the retailer increases their margin, and at the same time the consumer gets more than just a TV. They get the satisfaction of a complete home-theater experience.
So the next time your wife tells you, “Size doesn’t matter,” you can confidently show her your new “large-screen” home-theater TV and let her know: “In the living room, size does matter.”
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.