Big-Box CE Specialists Remain Channel Champions

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According to the TWICE Top 100 CE Retailers rankings, reports of the death of the big-box store have been greatly exaggerated.

Despite the inexorable rise of

and Apple to the top of the charts, and the impending demise of the big-box store as predicted by bloggers, pundits, and other prognosticators, the category killer still reigns supreme.

Examined by channel of distribution, the multiregional big-box specialty chains – Best Buy, Fry’s and hhgregg – accounted for more CE sell-through than any other retail classification, with more than a quarter of Top 100 sales, or $35.4 billion.

Add in the $4 billion contribution of the office-supply chains; the $2 billion sales heft of regional CE/majap boxes like P.C. Richard and BrandsMart; the $600 million from homefurnishings emporiums like Nebraska Furniture Mart; and the $30 billion generated by the mass-merchant crowd, i.e., Walmart, Target, Kmart and company, and you can see that this $68 billion channel ain’t going away any time soon.

That said, virtually all of the growth in consumer electronics retail last year was concentrated in the consumer-direct channel, led of course by Amazon (No. 3). Total channel sales edged up 17 percent to $23.6 billion, representing 17.7 percent of total Top 100 dollar volume, up from the prior year’s 15.9 percent share. But despite the advent of mobile shopping apps that are diverting purchases from showroom floors, the direct- to-consumer channel is no retail juggernaut: Almost half of the 22 companies included in the segment showed CE sales declines last year, including ecommerce pioneer

(No. 37). Indeed, the channel was buoyed largely by Jeff Bezos’ brainchild, whose electronics sales spiked more than 51 percent to $12 billion on increases in Kindle, traffic, and third-party marketplace commerce.

By comparison, A/V specialists like Bose, Magnolia and Sony Stores saw their cumulative sales volume increase 15 percent to $16.7 billion, representing 12.5 percent of the Top 100 rankings, up from 11.4 percent in the prior year. Like the direct channel, most of that momentum came from one company whose name begins with an “A.” Sell-through at Apple Stores (No. 4) increased 29.1 percent to $11.2 billion amid America’s unending love affair with the company’s cool devices, engaging retail stores, and top-flight sales and tech support. The increases, along with a solid 12 percent gain at 30th-ranked Bose, helped offset declines at RadioShack and the 67 percent death spiral at Sixth Avenue Electronics.

The picture was mixed for other distribution channels. Computer specialty retailers like Microcenter edged up 2 percent, to comprise 5 percent of total Top 100 sales volume, but the warehouse clubs conceded 6 percent of their combined market share on a 4.4 percent decline in Sam’s Club sales. The channel now comprises 6.2 percent of Top 100 volume.

The $30 billion mass merchant channel – once the most feared A/V specialty slayer until e-commerce came unto its own – also increased its Top 100 share by 2 percent amid a 5 percent sales spike at Walmart. But the aforementioned big-box segments, including the large CE/appliance chains and office-supply axis of Staples, Office Depot and OfficeMax, were essentially flat, fueling bearish arguments for the future wellbeing of the format. Whether these chains can rightsize their real estate and find a winning mix of online, mobile, and brick-and-mortar sales and services still remains to be seen.


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