Distributors Discern The Top Growth Categories For 2012

By TWICE Staff On Mar 12 2012 - 4:01am




TWICE: Which categories will provide growth and profit opportunities for retailers in the first half and why?

Warren Chaiken, Almo: I believe the best opportunity for profit and sales growth in the first half will be in appliances. Instead of buying new homes, consumers are remodeling and upgrading. The replacement market right now is quite strong, particularly for higher-end appliances, which provide a better profit opportunity for dealers.

In electronics, the new MAP policies will help increase profit opportunities for TV retailers.

Rob Eby, D&H Distributing: Tablets and thin and light notebooks (Ultrabooks) will be hot growth categories. By virtue of the smartphone, the typical customer is getting used to thin, light devices with instant-on capability and all-day battery life. They want those characteristics to extend to other form factors, including tablets and notebooks.

Accessories for these items are a profit center as well, since they provide higher-margins and can be easily upsold alongside these devices. Also, as apps become more of a way of life, we see that paradigm infiltrating the television experience as well. TVs and DVD players now have built-in apps that provide easy access to You- Tube, Netflix, Pandora and more.

Fred Towns, New Age Electronics/Jack of All Games: Consumers are looking for products that are thin, light and fast, making tablets and Ultrabooks ideal categories for growth. Retailers will see strong tablet sales with new product releases, refreshing the consumer’s need for the latest in technology. The new Ultrabook category will generate growth opportunities and re-stimulate the PC category.

Devices in both these categories will have higher [average selling prices], allowing for higher margin as well as a renewed interest in equipping the latest and greatest with multiple attach offerings.

Stephen Bodnarchuk, M. Rothman & Co.: Once again the emerging growth category of tablets and tablet accessories is still upward trending. First-half 2012 revenue and profitability forecasts for these two categories are projected upward.

We at M. Rothman are continuing to expand focus on these growing products and there are some exciting developments in this space we feel will contribute to increased sales. The new Android Ice Cream Sandwich 4.0 OS delivering late in the first quarter, as well as the new Apple iPad announcement and introduction, will continue to keep the category hot. The increased tablet install supply base will also only help improve sales of related accessories across the board.

Rob Kalman, SED International: Since we had a fairly strong holiday shopping season, the first half of the year is a good time to focus on add-ons with high-margin accessory items and extended warranty products. Those CE retailers who are not yet in the PC space should consider expanding in order to capitalize on the opportunities technology convergence presents. For example, offer wireless routers and tablets along with TVs and stereos and help the end-user put it all together.

Jerry Satoren, DSI Systems: Like last year, 60-inch and larger flat panels will continue to be a huge growth opportunity for retailers. For TV in general I expect the profit opportunity to come from the vendors that take their new policies seriously, stick with them, and maintain orderly sales and marketing strategies.

Growth will also continue to come in the tablet and home networking space but much of the profit will be driven by the ability to attach accessories and sell a full basket. As always, retailers that provide attachment offerings and execute on the sales floor will be the winners.

Bill Stewart, Petra Industries: The great thing about this industry is that amazing manufacturer innovations always provide new opportunities for retail growth. Categories like iPad, iPhone and smartphone should all have a positive impact for the period, especially with the impending release of iPad 3. These categories not only help retailers on the hardware side, but open up a ton of opportunities for add-on accessories — headphones, Bluetooth, docks, cases, sleeves, screen protectors, and others — which provide a lot of increased profit margin opportunity.

The first half of the year is also a good time for categories such as mobile A/V, photo/video and home theater. We are also seeing growth in our appliance category, with an increased demand for retail-packaged appliance hook-up accessories that can be merchandised on the sales floor.

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