CEA, TraQline Discuss CE Retail Trends

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New York. — Steve Koenig, The Consumer Electronics Association’s (CEA) industry analysis director, and Eric Voyer, TraQline VP, today gave a presentation on trends found in CE retailing at the CEA Industry Update at Digital Downtown event.

The presentation was called “The State of CE Retail: Five Key Trends Changing the Way CE is Sold.”

Koenig and Voyer presented five trends they find in CE retailing today:

  • Channel options: The presenters said there are more non-traditional CE shopping options available to consumers today, but that the majority of consumers still make their CE purchases through traditional outlets.
  • Service: On the one hand, there is less service available at “low-touch outlets like Costco, selling on assortment and price,” Koenig said, while traditional CE retailers appear to be making more of an effort to attach services to their sales.
  • Revenue sources: Koenig said margins for hardware are “drying up” due to factors like price deflation, but that there is still opportunity for new revenue from attachment sales of services and accessories at retail.
  • The role of technology: Technology tools both for the consumer and the retailer are playing a major role in the process of making of a sale today, Koenig noted. Retailers easily collect customer data to target their customers more effectively than ever before. On the customer’s side, the Web makes them more educated about products and more able to comparison shop than ever before.
  • Innovation: Koenig said there is “more experimentation, creativity and innovation with merchandising, store concepts and selling.” Examples he cited were the reformatting of Wal-Mart’s CE departments and Circuit City’s The City stores, among others.

    TraQline is a retail tracking survey that queries 150,000 U.S. consumers quarterly about their online and in-store purchasing habits. The survey is a product of market research firm The Stevenson Company, the same firm that partners with TWICE each year to compile our annual Top 100 CE Retailer Report along with all of its various other category-specific annual reports. The presenters used the TWICE report along with CEA market data in the presentation as well.

In addition to their five main points, the duo also highlighted some of TraQline’s key findings.

For instance, the survey found that consumers are spending more on discounters and that their spending in such stores went up 2.6 percent in a year. It also found that the majority of electronics/appliance stores and computer specialty stores saw declines over the past year. The presenters credited the computer specialty category’s suffering with “losses at CompUSA and with Dell’s weakening brand and changes in distribution.”

The presenters also discussed CEA data collected from consumers on what kinds of stores they’re willing to buy CE products from. While big-box stores Best Buy, Target, and Wal-Mart held the lead among consumers a respective 70 percent, 63 percent and 63 percent of shoppers reporting willingness to buy CE products from those stores, Koenig and Voyer also pointed out that non-traditional stores, such as The Home Depot and Bed, Bath and Beyond, as well as Ikea, also ranked significantly with consumers with 59 percent, 41 percent and 30 percent of consumers respectively reporting willingness to shop for CE in those stores. The presenters suggested that there is a tremendous amount of untapped market potential for non-traditional retailers.

TraQline also found that CE consumers are shopping around slightly more than they were a few years ago. For instance, three years ago 36 percent of respondents said they shopped in two or more stores for CE while 64 percent said they shopped in one store only; this year 38 percent of respondents shopped in two or more stores, and 62 percent shopped in only one.

Of those consumers who said they shopped in more than one store, the survey found they spent more money on average. According to TraQline, in the past year, those who shopped in only one store spent an average of $272, while those who shopped in two or more stores said they spent an average of $357.

Another key finding for TraQline’s survey related to online shopping. It found that the numbers of consumers who shopped online and bought online increased from 40.8 percent, to 49 percent, and 17.7 percent, to 22.6 percent, respectively. While it found that the flat-panel and audio categories were trending upward online, it found that the amount of consumers who reported shopping for and buying computers online actually dropped. The presenters attributed the falloff of online computer shopping to Apple’s growing brick-and-mortar retail presence, changes in Dell’s distribution (the company’s products are now available through select big-box retailers) and the increasing availability of low-cost notebooks.

Other notable survey findings included “shrinking price gaps between [electronics/appliance retailers] and discounters,” and “retail price erosion among hottest-selling products” like notebooks, flat panels, digital cameras and more.

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