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Filling The CE Voids

“Nature abhors a vacuum,” the saying goes. The same is true in business, and we’re seeing it now in the consumer electronics industry.

When Circuit City and Tweeter departed and Pioneer revealed its decision to pull out of the TV business altogether, there were many dire predictions intially made about the industry’s fate.

I mentioned in a blog on recently that J.D. Power & Associates said that national chains — really they meant Best Buy and Wal-Mart — would pick up the overwhelming share of Circuit’s volume. J.D. Power didn’t factor in independent retailers, to their annoyance.

Well, discussing the post-Circuit/Tweeter marketplace with these independent retailers before and during the recent Brand Source and Nationwide buying group meetings, not only are they benefitting from the departed retailers in this recession, they are aggressively targeting former customers of those chains. For instance, New York’s P.C. Richard & Son ran subtle ads in the New York Daily News in late March blaring, “Wanted! Circuit City Customers,” as they touted their 99-year history in the market.

Both Brand Source and Nationwide members told our senior editor Alan Wolf that their sales may have turned a corner. They aren’t claiming a booming market, but any good news is welcome in this economy.

As for Pioneer’s exit from the TV business with its upscale Kuro line, many of its dealers were, understandably, mourning its departure. Many felt that they would not be able to easily, if at all, replace the upscale sales that Pioneer’s Kuro brand provides.

Well, as another well-worn saying goes, never say never, especially in this industry as two major brands said that they are positioning their lines to fill the void Kuro leaves in the marketplace.

Executive editor Greg Tarr spoke with Panasonic’s Bob Perry last month and Samsung’s Tim Baxter last week at line previews for each company. Both executives spoke about their brands as alternatives to Pioneer’s Kuro.

Perry said that Panasonic would be picking up some of those A/V specialty accounts and will be implementing a minimum advertised pricing policy (MAP) tied to advertising support and issuing guidelines on how to properly demonstrate and sell the upscale TVs in its line.

Samsung’s Baxter highlighted the high-performance plasma and 240Hz LED LCD TVs in its new line that could increase its relationships with upscale CE retailers and custom installers. And, he added, Samsung is re-examining its MAP policies for retailers.

However, more than one retailer TWICE spoke to when Pioneer made its fateful decision in February commented that any major brands that want to replace Kuro will have to make a long-term commitment to the category.

“This isn’t about a short-term gain in market share for six months or a year,” one well-known A/V specialist told TWICE. “If they make a long-term commitment over time, it will improve their brand image and profitability. But they have to stay the course.”

Panasonic and Samsung showing interest in the small-but-profitable upscale TV market just shows that CE, like nature, really does abhor a vacuum.