NEW YORK – Cumulative CE sales for the industry’s 100 largest dealers were flat for the second consecutive year in 2013, edging up just 0.3 percent. According to the annual TWICE Top 100 Retailers Report, produced with market research partner The Stevenson Group, volume held steady at nearly $131.9 billion last year. But the seemingly stable results belie the Sturm und Drang of the marketplace, in which strong performances by a handful of retailers offset single- and double-digit declines for the majority.
Factors at play included the usual suspects: another transitional year for products, absent a big-ticket CE hit; continued shopper migration online; and the lingering effects of the Great Recession.
Compounding the problem was the kind of extreme winter weather that could freeze over hell — which is where holiday sales plans went for dealers in the Midwest, South and North.
For some, the obstacles played to their strengths. Amazon.com, for one, mounted a 21 percent gain last year to $15.6 billion, securing its No. 3 position behind industry leaders Best Buy, which was down 2 percent to $30.1 billion, and Walmart, which was flat at $22.3 billion.
For 12th-ranked Micro Center, which is filling the void left by CompUSA, a 30,000-SKU IT assortment and the pricing power derived from 23 big-box stores and $2.3 billion in sales fueled an 11 percent volume spike last year.
At Conn’s, which moved up three spots to place 32nd, a newfound focus on better TVs, the closing of unproductive stores and expansion into new markets helped fuel a 31 percent sales gain.
And outside forces were at play for Simply Mac (No. 54 with a bullet), which was acquired by GameStop, tripled its store count, and delivered sales growth of 159 percent, the most for any Top 100 chain.
Conversely, CE in general and mobile in particular was an albatross for hhgregg (No. 18), which shunned promotions and suffered the consequences, as sales dropped 19 percent.
Also taking it on the chin was Systemax’s TigerDirect retail business (No. 16), which was down 17 percent last year and has since decided to broaden its assortment well beyond CE.
Other precipitous drops were seen at Vann’s, which closed three of its five stores last year; Barnes & Noble, whose Nook business continues to lose steam; and J&R Music and American TV, both of which gave up the ghost this spring.
Within the top 10, ongoing CE softness at Costco (No. 6) and a challenging transformation at RadioShack (No. 8) offset tepid 1.3 percent gains by No. 5 Target and fourth-place Apple, whose latest iPhone iterations received a cooler reception than their predecessor one year prior.
And ninth-place Dell, which is busy building its non-consumer businesses and was distracted by a bitter bidding war, posted a 4 percent decline.
That said, the top-10 tier, and Amazon ostensibly, continued to suck market share from lower-ranked retailers and now accounts for nearly 79 percent of all CE sell-through, or about $103.7 billion.
Broken out by distribution channel, the Amazonled consumer direct sector enjoyed the great share gains last year, edging up 1.6 percentage points to garner over 19 percent of CE sales.
Computer stores also extended their sales turf, showing a 0.2 percent gain, to a 5.2 percent share, on Micro Center’s and Simply Mac’s strength.
But the vast bulk of CE business is still done through multiregional big-box specialty chains and national discount stores, which together controlled close to half of all volume last year.
Absent from this year’s list is Electronics Expo, which closed all but one showroom last year; Ritz Camera, which lives on through Ritz Interactive (No. 64); Pamida, which was absorbed by sister discounter Shopko; Boscov’s, which dropped CE; and Alienware, whose figures were folded into Dell’s.
That made room for newcomer Jetson TV (No. 99), a regular on our Top 100 majap chart, and Bjorn’s (No. 100), which returns to the fold following a nine-year absence.
Methodology
The TWICE Top 100 CE Retailers Report ranks the leading domestic CE dealers by sales of consumer electronics.
Sales figures are based on information that was supplied by retailers responding to a 300-dealer survey by TWICE and research partner The Stevenson Company. Absent retailers’ input, estimates were developed from Stevenson’s internal market tracking surveys (TraQline), industry sizing based on wholesale shipment figures from the Consumer Electronics Association (CEA) and other sources, and average retail price points by product.
All estimates were further refined through the use of public filings with the Securities and Exchange Commission (SEC), TWICE industry analyses, retail analysts’ financial reports, published data and other external sources.
Once the estimate was determined to be a reasonable assumption of the retailer’s CE sales, the figure was broken out by product category based on the TraQline surveys.
Sales figures by total and by category for 2013 were then compared to 2013 sales tallies, and adjusted if necessary to more closely track total reported revenue growth.
Businesses must meet the following criteria to be considered consumer electronics retailers and to qualify for inclusion in the Top 100 report:
• sells new products directly to consumers;
• has physical retail store locations, or has a significant online presence;
• sells consumer electronic products as one of its principal lines of business;
• does not offer consumer electronics products primarily to sell its transmission services, i.e. wireless carriers, cable operators, satellite radio/TV providers; and
• sells merchandise that is considered consumer electronics products as defined by the CEA (see product definitions at right).
Sales are considered to be the revenue received for the products sold primarily to consumers, including CE hardware and accessories; personal computers, peripherals and software; and video game platforms and software.
Sales of prerecorded music CDs and movie DVDs and Blu-ray discs are excluded from the report.
Respondents were also instructed to exclude revenues received for installation services, repair services, rentals, extended-service contracts and vendor marketing support, as well as sales to the business, government and education channels.
Based on The Stevenson Company’s proprietary methodology, a refined baseline was developed for this annual project effective with the 2005 Top 100 CE Retailers Report, our first collaboration, covering the years 2003 and 2004. Therefore, comparisons with Top 100 reports issued prior to 2005 would be imprecise.
The Stevenson Company, based in Louisville, Ky., began as the global economic analysis and research department of GE Appliances. Now independent, the market research firm has served the consumer electronics and major appliances industries for the past 18 years by developing markets sizing and market share estimates.
Its TraQline syndicated quarterly survey of 150,000 shoppers measures retail purchases of consumer durables and provides estimates of unit and dollar market share and other key measures.
What Is a CE Product?
As defined by the Consumer Electronics Association, here is a breakdown of what constitutes a consumer electronics product and what was included in the Top 100’s sales totals:
Accessories: batteries, cables, headphones, screen cleaners, wearables
Audio products: wired and wireless speakers and soundbars, receivers, CD players (home and portable), home theater in a box, pocket and portable radios, boomboxes, MP3 players, docking stations, distributed audio products, mini stereos, clock radios, headphones, blank recordable audio media
Car electronics: Speakers, in-dash radio/audio/ video receivers, amps, satellite radios, radar detectors, alarms, GPS, mobile TVs, video monitors, backup/night vision camera kits, DVD/Blu-Ray Disc players, CB radios
Communications products: corded and cordless phones, answering machines, fax machines, cellphones and smartphones, PDAs, CB radios
Video products: Blu-ray Disc and DVD players (home and portable), cameras, camcorders, DVD recorders, hard-disk recorders, satellite TV dishes and systems, TVs and TV/VCRs/DVD/Blu-ray combos, blank recordable video media, video game consoles, video games, digital media players
Information technology: Cellphones, desktop/ notebook/netbook/tablet PCs, e-readers, external drives, flash media, monitors, networking products, optical drives, printers, software, tablets, accessory hardware (cards, hard drives, keyboards, mice, memory, desktop speakers, etc.), home automation
