Stan Glasgow, president of Sony Electronics, commented during last week’s media roundtable in New York that while Warren Buffett may think the economy is in a recession, there isn’t one in the CE industry. “The bottom line is that consumers are buying CE products,” Glasgow said. He later noted that a premium brand like Sony “holds up in tough economic times.”
His comment reminded me of other economic downturns. Other industry execs have said in the past that when times get tough, consumers will cut back on vacations, eating out and the like, and entertain themselves at home with consumer electronics by replacing some products, buying accessories to upgrade existing items, or buying music or videos. Relating this story to more than one Wall Street analyst during a previous downturn, their responses went something like this, “Do you believe that horse$!%t?”
Well, one month may not be a trend, but Wal-Mart, Sam’s Club and BJ’s Wholesale said in their February’s retail sales reports last week that consumer electronics was one of the bright spots in their businesses.
During this downturn, or recession, CE has something going for it — the digital TV transition to hit next February. Hopefully, as educational efforts, public-service ads, advertising by retailers and manufacturers, and coverage by the consumer media build as the deadline approaches, more consumers will be aware of the change. Glasgow said last week, “The transition to HD is a major factor” in Sony’s higher sales.
Don’t get me wrong; times are going to be tough until we get through this downturn and strength in overall CE sales won’t help every retailer, distributor or manufacturer. You still have to react more quickly to market trends than ever before. But it is comforting that in changing times CE products are still coveted by consumers.