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Retailers Need To Look Beyond Core Consumer Electronics Categories

The TWICE Top 100 CE Retailers Report has arrived, and while some in the industry described last year as a “comeback” year of sorts, the final figures show sales were off 0.3 percent for the year, or just about flat.

Of course, the usual suspects will get plenty of attention: (No. 3) saw an increase of 15.4 percent in sales while Apple Retail Stores were up 4.4 percent. And it was no surprise that the late RadioShack (No. 10) had sales tumbling 17 percent, with Sears’ CE sales continuing to drop, this time by off 4 percent.

But I think you need to take a step back to review the nature of this famous Top 100 list itself. Remember, it includes sales of all types of CE products: 4K TVs, high-end audio and homenetworking systems, smartphones and tablets, commodity categories, batteries and accessories for all that hardware, and more.

And the retailers that sell the products run the gamut, from traditional electronics/ appliance retailers, CE specialists, mass merchants, e-tailers, manufacturers, drug stores … you name it. The type of stores goes on and on. Compared with the industry of 20 or 30 years ago, CE products are ubiquitous now and are sold just about everywhere.

With the universal acceptance of smartphones and tablets, and now with wearables of all types, these new technologies will continue to broaden CE’s reach into different types of retailers.

But what is significantly different today is that retailers can no longer just sell CE products to make their business plans profitable. Margins are as thin as ever. Demand for long-established categories evaporated as new technologies have replaced them. That’s nothing new.

I have always felt that for traditional electronics/appliance retailers, carrying CE provided their stores with “sex appeal” and a draw to get into their stores, while its profits came from white goods. CE products can continue to be used as a draw to get customers into stores, but it has to be part of a mix of products for the home that retailers can offer.

CE today — in all of its forms, including anything from wearables to home networking — should be part of a retailers’ lineup, which could also include majaps, furniture, mattresses, housewares, outdoor cooking, furniture products and plenty more.

Of course, none of this is new; the change has been around for the past several years with notable regional players like Cowboy Maloney’s and Conn’s relying on other products.

In my backyard in the New York metropolitan area, P.C. Richard is now the “appliance, TV and mattress giant.” It has now has 50 bedding showrooms throughout the chain.

In addition, I saw the other day that Staples (No. 15 on this year’s list and a 12.2 percent drop in CE sales) featured its coffee and refreshment services for offices in its TV commercials.

And, of course, I would be remiss if I did not say that based on an ad like that, the CE industry should wake up and smell the coffee and try to increase margins. That might encourage retailers to make CE a larger part of their mix.

Steve Smith is editor at large of TWICE and was its longtime editor in chief.