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The Consumer Electronics Association (CEA) weighed the strengths and weaknesses of the specialty retailing channel during a presentation at last week's CEA Industry Forum, held at the Four Seasons, here.
The survey shows the loyalty and lucrative nature of the average specialty high-end retail consumer, who spends $1,985 per year on all home A/V products in all retail channels, while 52 percent ($1,032) is spent in the specialty channel. That compares with the average consumer, who spends almost $1,200 a year on home A/V products in the United States, but only 17 percent ($204) is spent at specialty high-end retailers.
While the general public acknowledges that specialty, high-end electronics store have knowledgeable salespeople and offer top-quality products, special-services such as installation and consultation, and the latest products, they also know that these stores are high priced.
According to the survey, the top reason why consumers don't shop at specialty CE stores is high price (51 percent). That is followed by inconvenient store location (30 percent), being unfamiliar with the store location (25 percent) and feeling intimidated by that type of store (16 percent). (See chart for a complete list.)
But those who do shop in specialty electronics stores give the locations uniformly high marks for their sales staffs, past experience, variety of products and brands, information provided about the products and the quality of in-store demos. And according to the survey, those consumers surveyed gave specialty, high-end CE stores either a “good” (50 percent) or “excellent” (27 percent) rating on their most recent visit.
Sean Wargo, industry analysis director for CEA, and Joseph Bates, research director of CEA, noted in their presentation that awareness of specialty, high-end retailers is poor, pricing is not enough and this group of retailers need to “differentiate through value.”
They note that with consumers' time to shop, along with consumer patience, the ability to install the products themselves and other factors are decreasing. But because of product complexity and choices, the emphasis on design integration, the greater role of women in the buying decision and digital rights management issues, consumer needs are shifting.
The conclusions of the study urge specialty, high-end CE retailers to become more service oriented, emphasize design and lifestyle concerns of consumers, and become “solution oriented” and “brand preferred.”
The study showed that greater training and support mean “more sales and more margin” for these retailers. And that the use of distributors, just-in-time inventory philosophies, emphasis on service and “solutions-based showrooms,” like Ikea, could be keys to success.
Primary research was conducted by the CEA Market Research Department using data from studies done on specialty retail in June 2005 polling over 1,000 adults in the United States and featuring a margin error of +/- 3.1 percent.
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.