In our May 18 print edition I used the term “Good Riddance” in the headline for my column, and it was accurate. I wrote about 2008. But that was last year.
This column is about 2009 and it’s a different story. Things have begun to turn around in CE.
How do I know? Well it’s rare that you get to talk to a good selection of distributors, PRO Group retailers and vendors attending PRO’s event in a short period of time, but this reporter had that opportunity in May.
What’s even rarer is that the industry’s three key constituencies all agree on something: Business, by no means booming, is improving.
Here is what many of these executives told me:
- Demand for CE products at retail has been steady, and in some cases strong so far this year, especially in TVs.
- Manufacturers and distributors both confirm that existing regional and independent CE retailers have picked up a nice portion of Circuit City’s old market share.
- Product shortages, in TVs and a variety of categories, either are happening now or are about to happen, based on conservative forecasts by vendors and dealers and increased demand.
While no one wants to see companies exit the industry or experience product shortages, it is comforting to know that seemingly under the radar retail activity is building again for CE products. (Maybe independents are no longer “under the radar” since last week The Wall Street Journal actually acknowledged they exist and are doing better than expected.)
As for economists, well, I don’t take what this other group says as the Gospel. But last week a survey of that profession’s best indicated that the recession will end in the second half, growth will be moderate and by 2010 there will be modest gains in employment.
On unemployment, while none of the industry executives I spoke to are economists several said it was a factor in the economy that was a concern, since it usually lags on after an economic recovery is under way. And the problems in real estate, banking and car industries are not just going to disappear.
But there are opportunities in this environment. With Pioneer’s departure from TV, several established makers have introduced product for A/V specialists. In certain areas of the country, strong local retailers are planning to expand and to take advantage of Circuit’s exit and good deals on commercial real estate.
I’ll exit from with some pretty good advice from Walt Stinson of ListenUp, who is not only a member of the PRO Group board but is also a member of the Class of 2009 CE Hall Of Fame.
In speaking of any downturn, he said, “you want to cut fat, but not muscle.” But Stinson added, “The best companies are going to take advantage of the coming recovery, not the recession. To do the latter is not a long-term solution for your business.”