Chicago – New Age
Electronics held its first Dealer Summit here this week, drawing 25 suppliers
and 60 retailers to review products and discuss market trends as attention
turns to the fall.
Fred Towns,
president of New Age Electronics, a division of Synnex, told TWICE the goal of
the Wednesday through Friday Summit is to “look at the fall selling season and
say to customers, ‘Are you prepared?’ And if not, there is still time.”
Towns said that
New Age brought together “what we believe are some of the hot categories”
starting with tablets and including video games, which is a specialty of Jack
of All Trades, the Synnex game division.
Kevin Murai,
president/CEO of Synnex, which reported strong double-digit year-on-year sales
growth, said that the emphasis of the $8.6 billion parent company is “the Cloud,
mobility and the converged home.”
He noted that 20
percent of Synnex annual sales are from New Age, and he claimed that makes it
“the largest CE distributor in the U.S.”
The tablet market
received special emphasis at the Summit, with Towns commenting that he knew
last holiday season that the category was going to take off this year. “We saw
very few third-party tablets, but we sold anything we could get our hands on,
and they went out the door.”
This year, since
New Age does not carry Apple, “We wanted to make sure we at least had best of
class. We want to make sure our retailers have as many good choices as
possible. We want them to understand the market and make sure they can partner
with right brands so they can be successful.”
As part of a
special panel discussion at the Summit, Acer, Hewlett-Packard and Motorola were
in attendance, along with Microsoft and McAfee. (See next week for more
coverage on that panel.)
When asked how
important it is for retailers that don’t carry computers to enter the tablet
market, Towns said, “Consumers have found out how [tablets] work great with
existing [home] systems. They can be used in a smart home setting, to control
lighting, audio/video and security, yet they are still tablets. They are
reaching the whole world of entertainment.”
He noted that when
you see “Best Buy downsizing their stores, what will they [and other retailers]
do with the extra space?” He suggested that Best Buy and other retailers that
may be dropping other categories may “reposition their stores and put [tablets]
there so they can touch and play with them” in a streamlined setting.
Towns acknowledged
the slow summer sales at retail for a second year in a row, and noted it is
because retailers “are not carrying a ridiculous amount of inventory” and being
“careful to make manageable turns” while consumers “are being penny-wise and
cautious” waiting for deals.
“Some dealers have
been saying ‘maybe I will delay by back-to-school computer promotions’ because
they are still selling spring product. Some of them are in a better, healthier
position now to take goods in due to that strategy,” he noted.
In discussing the
general economic situation and how it is affecting consumer shopping habits,
Towns suggested that stimulus packages, “like last year’s major appliance
effect to buy more energy efficient products, were very successful.”
He noted that
while states are “challenged with getting taxes on the retail side ” due to the
loss of revenue from Internet sales, if that can be solved, some states could
afford to cut sales taxes around certain periods like Black Friday, which would
increase retail sales and economic activity. It could be a win-win.”
Towns also noted
that supply-chain problems due to the disaster in Japan have been handled for
the most part by suppliers, except for printing type products and some higher-end
camera categories. In the camera category, the supply problems, “helped bring
more value” to the category.
As for the overall
holiday season in CE, Towns sees single-digit growth for many individual
categories.
In TV, Towns mentioned
an opportunity in the 37-inch to 42-inch market where “there are still a lot of
old tube sets being used,” at homes and businesses. Some consumers won’t go for
a larger set because “they don’t want to get rid of furniture for them.”
What he suggests
is for retailers to partner with local recyclers and “take back old TVs, give
consumers credit for the units to be recycled and sell them new HD sets. It is
an opportunity you could do in the mid-price-point part of the market.”
