If buyers at CES have more spring in their step, it’s small wonder: They’re just coming off what most are calling their best holiday season ever.
Thanks to the convergence of an ideal economy, a slew of must-have digital devices, the arrival of e-commerce and general millennial good cheer, consumers clearly made Christmas 1999 one for the retail record books.
As Sound Advice senior VP Michael Blumberg re-marked during the thick of the holiday rush, “This is my 26th year in the business, and it’s shaping up to be the greatest season I’ve ever seen.”
Blumberg wasn’t alone. According to a mid-December study by Neretin Associates, 144 key CE merchants representing 14,500 storefronts agreed that sales were the strongest ever for the fourth quarter of any year.
But not even CE’s best all-time season was without its share of glitches. Retailers bemoaned missed opportunities in digital-ready TV, blaming bone-dry supplies and surprisingly robust demand. Also, RadioShack took one on the chin from Wall Street for missing its monthly growth goal of 8% to 10% in December. And cyberstores learned that too much of a good thing can lead to stock shortages, spotty service and server meltdowns.
But by and large, consumers bought largely. Topping their shopping lists were such big-ticket items as projection TVs, digital camcorders, home theater systems, PDAs and mobile electronics.
At Best Buy, senior VP/merchandising Mike London saw the writing on the wall early on, based on crowds averaging 500-strong that cued up outside stores back on Black Friday morning.
“Some stores had 1,000, and customers started lining up as early as 7 a.m. to take advantage of the special offers and early hours,” London said. Once inside, shoppers made top sellers of TVs, DVD players, car stereos, digital cameras and all manner of phones, he reported.
For number-two CE merchant Circuit City, “The theme for the year was digital — digital TV, DVD, wireless communication and CD-R,” a spokesman said. Added VP/divisional merchandise manager David Cecil, “DVD players were perhaps the most prevalent addition to home theaters nationwide.”
Despite RadioShack’s rebuke by Wall Street, chairman Len Roberts noted that some 60% of its monthly sales historically occur during the latter half of December, and “the week after Christmas is always important for the company.”
According to merchandise marketing VP Rick Borinstein, leading categories included A/V (“very strong”); wireless phones (“continue to beat our plan”); and PCs (“above plan, too”). Other areas stoking the Shack’s holiday sales were DSS, DVD, traditional phones, gift and novelty electronics and radio-control toys, he said.
At mid-month, Chuck Cebuhar, VP-general manager at Sears, was also expecting glad holiday tidings despite a post-Thanksgiving lull. “It typically comes down to the last three or four days,” he said, echoing a study last month by the International Mass Retail Association showing that one week out from Christmas, only 40% of Americans had completed their shopping.
Topping shoppers’ lists at Sears were big-screen TVs, camcorders, digital cameras, laptops and especially DVDs, said Cebuhar, who was also anticipating a post-Christmas crowd. “Those are the hot buttons. Customers have money to spend, and they’re buying high-end products.”
At Tweeter Home Entertainment Group, merchandising and purchasing VP Bernie Sapienza was “pretty bullish on the season,” thanks to such digital sales drivers as HDTV, camcorders, cellphones, Dolby Digital receivers and digital wireless devices. “All are selling great, although DVD was completely gangbusters, just through the roof.”
What could have made life even sweeter for Tweeter were more TVs. “HDTV and some tube models were a problem in terms of supply,” Sapienza said, noting that Sony flat screens in particular “were a little hard to get.”
Shortages also cropped up at The Wiz, although they were limited to low-end analog VCRs and camcorders, and some top-of-the-line digital camcorders and cameras. “They were mostly spot shortages, and not a big problem as in years past,” reported Tasso Koken, executive VP/merchandising and marketing. All told, however, Koken was “very happy with Christmas. There’s a lot more foot traffic, and it’s a very good holiday season.”
Making the Yuletide bright for the New York metro-area chain was anything and everything video. “The only surprise was that everything did very, very well across the board in video, from high-end HDTVs to DVDs, digital camcorders and cameras,” Koken said. Moreover, products priced within the “better” and “best” range proved to be the “strongest area. People are spending money on high-end goods.”
Warren Mann, executive director of the MARTA Cooperative of America, concurred: “Our guys tend to sell upscale, and the premium areas of the business are extremely good, although that’s because of a price implosion.” As a result, he said, “we were scrambling to get HDTVs. We expected it to be good but not that good.”
Nevertheless, Mann said MARTA members were experiencing a relatively soft December, at least compared to the season’s Thanksgiving start, and wondered whether the pre-Christmas slump wasn’t more widespread.
“The national chains were selling 13-inch TVs for $79, 19-inch TVs for $99 and VCRs for $49,” he recalled. “We never saw the chains selling this low. It was a new, devastating level, and if it was really a necessity, then that means that somebody wasn’t doing well.”