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Dealers Decking The Halls — And Display Walls — With Flat-Panel TVs

For CE dealers it’s a no-brainer — flat-panel TV will be the hit product category of the 2006 holiday selling season.

According to several CE chains previewing their holiday wares here last month, including Best Buy, RadioShack and BJ’s Wholesale Club, ample supplies and still-lower prices will further stoke consumer demand for plasma display panels and LCD TVs.

“Flat-panel supplies will be in better shape this year than last year,” observed Mike Vitelli, Best Buy’s CE and product management senior VP, as new production comes online and collaborative forecasting better portends consumer demand. What’s more, he said, “price points are starting to look rational to consumers.”

To ensure that shoppers make their flat-panel purchases at Best Buy, the company is opening an additional 200 Magnolia Home Theater shops, bringing the pre-holiday total to 325 locations, and is rolling out a new home theater display format to some 200 Best Buy locations. The displays, code-named HEET (for Home Entertainment Experience Transformation), feature a prominent flat-panel wall, faux wood fixtures, unobstructed sight lines and a consultation area. Other elements include live high- and standard-definition feeds to demonstrate the difference to shoppers, a home installation display with a cut-away wall, a greater number of complete home theater systems, and stand-alone racks for receivers that allow shoppers to examine their back panels. Three prototypes are currently installed in Minneapolis area stores.

“They’re gorgeous,” Vitelli said of the display areas. “It creates a comfortable, more welcoming environment.”

Meanwhile, Circuit City is preparing to launch an expanded and remodeled home entertainment department of its own, based on tests at a number of prototype stores (see story below), and RadioShack is gearing up for its first flat-panel Christmas. The retailer will begin selling flat-panel LCD HDTVs from LG and Panasonic in 3,000 stores this September, which join an opening price-point assortment of Akai monitors that are currently in 650 locations. The Akai SKUs — a 20W-inch unit retailing for $450, a 27W-inch model priced at $800, a 32W-inch display selling for $1,200 and a $1,700 37W-inch model — will be rolled out to all of RadioShack’s approximately 5,000 company-owned locations in September.

While some industry observers questioned the efficacy of adding a flat-panel assortment, RadioShack says the form factor will make it a good fit — literally — for its stores’ smaller footprint. The TVs will also complement RadioShack’s existing HD adjuncts, including cables, antennas, Dish subscriptions, up-converting DVD players, audio and, most recently, TiVo products and services, while Bank of America retail analyst David Strasser calculates that the company can add 1 percent in comp-store sales by selling just 13 TVs per store.

BJ’s also touted its flat-panel offerings during its holiday preview event in New York, showcasing a Philips 50W-inch plasma for $2,499 and a 40W-inch Sony LCD-TV for $2,199.

But dealers do not live by flat panel alone. Vitelli said other promising categories include gaming, thanks to the rollout of the new PlayStation 3 and Nintendo Wii platforms later this year, and component audio, which has been “up substantially” at the chain, thanks to the improved demo experience provided by the Magnolia in-store shops.

Best Buy is also beefing up its private-label assortment in advance of the holidays with its first Insignia-branded flat-panel TV (see story, p. 1), and may re-introduce Apple computers chain-wide after an eight-year absence, pending the results of a seven-store test begun in May.

RadioShack is also stepping up its private-label activities with the introduction of Accurian-branded audio receivers, loudspeakers, portable DVD players and iPod accessories. Elsewhere, the chain is unleashing a new barrage of wireless handsets, headsets and other Bluetooth accessories, and has high hopes for its two HD radio tabletop receivers: Boston Acoustics’ $300 Recepter and an Accurian-branded unit that will retail for $200.