CEA/TraQline: Amazon, Consumers Gain Over Retailers


New York - A presentation from the Consumer Electronics Association (CEA) and Stevenson's TraQline unit confirmed two main CE retail trends -- consumers have the upper hand over retailers, and Amazon is taking market share.


During the CEA Research Summit held at the Samsung Experience in the Time Warner building, here, on June 23, Steve Koenig, industry analysis director of CEA, and Eric Voyer, VP of Stevenson's TraQline unit, said 2011 will be the year of the consumer due to consumer empowerment. This will namely be because of the ability of consumers via the technology -- smartphones, tablets and laptops -- to research pricing, features and reviews to get the best products for the best price from retailers who provide the best prices, selection and service.

Voyer said that while Best Buy and Walmart still generate the most sales in CE, "more people are shopping at Amazon than the past," and that is a positive in the favor of the industry.

He added that there are no huge swings in retail pricing right now.

Consumer perception of retailers has specialists, general electronics dealers like Best Buy, mass merchants, online retailers and general retailers winning on services, staff, and selection of brands and products.

However, when CEA and TraQline polled consumers on their motivations to buy at Best Buy, Amazon, Walmart, Target and the rest of the industry, the three responses were: competitive price, previous store experience and good selection of products.

Amazon was on top in all three areas, with Best Buy a close fourth in good selection of products.

Walmart and Target were almost tied for second place when it came to competitive price, and were way down on the list for previous store experience.

Not surprisingly, the research shows that more consumers are shopping at Best Buy and Walmart and then purchasing with Amazon for the four quarters ending at the end of this year's first quarter.

For Best Buy, the number has gone up from 2.6 percent in 2009, to 2.6 percent in 2010, to 4 percent this year. Walmart's losses to Amazon have doubled in three years, from 1.3 percent in 2009 and 2010, to 2.7 this year.

Still, Amazon's market share of total CE dollars spent is only up slightly, from 4 percent for the four quarters ended in the first quarter of 2010 at 4 percent to this year's 5.1 percent.

Best Buy still holds 26.1 percent of all CE dollars spent as of the first quarter of this year, down 0.7 percent from the previous year. Walmart is up slightly this year, up 0.2 percent to 11.7 percent of all CE dollars spent.

Koenig said the technology the industry sells enables consumers to check on pricing, performance of the products and retail service to make their purchases, and that retailers now have to acknowledge that and act upon the trends.

The recession of 2008 and the overall economic downturn since then have helped accelerate the consumers' ability to check pricing on mobile devices of all types in store and at home.

Koenig said for retailers to deal with the new phenomenon they must embrace social media and "hop onto the connected bandwagon, revive and restore relationship building [with consumers] and create and maintain open and exciting sales floors."

Here are some of the numbers:

  • Wholesale pricing from 2008 to 2011 year to date for leading categories was down mostly in double-digits. Camcorders top the list with 56.8 percent. Only MP3, thanks to Apple, is up 24.3 percent.
  • Key margin rates are improving from 2009 to year-to-date 2011. The best category is digital cameras, up more than 5 percent.
  • Best brands do vary by category. In flat panel, Samsung is tops; Sony is best in home audio; Canon is No. 1 in digicams; and Apple is No. 1 in tablets, all in the last four quarters.
  • For top retailers in terms of dollar market share in the past four quarters, Best Buy is tops and Walmart is second for flat panel, home audio and digicams. Apple is No. 1 in tablets, and Best Buy is No. 2.
  • In flat panels, ASPs are declining rapidly, but the biggest drops are from 26 inches to 31 inches (41 percent) to 50 to 53 inches (down 45 percent).
  • At retail, ASPs were up in 2010 by 3 percent, and so far they are up 10 percent this year.


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