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, â€˜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 â€˜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."