That Was The Year That Was: A 2013 Retail Retrospective

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NEW YORK – It’s springtime in America for consumer electronics, and the seeds of its rebirth were planted throughout the year.

After years of consolidation, recessionary woes and a downward price spiral, 2013 marked a period of hope and rejuvenation for retailers. Representative of the resurgence is Best Buy CEO Hubert Joly, whose CE chain came to symbolize, rightly or wrongly, the decline of big-box brick-and-mortar. With intelligence and charm he made good on his “Renew Blue” pledges by cutting costs, revamping systems, remerchandising the sales floor, and making showrooms relevant again. In the process, he also managed to turn a profit.

While the jury’s still out on RadioShack, CEO Joe Magnacca brought the same kind of energy and enthusiasm to his own unique task – that of reviving an iconic retailer in search of its place in 21st century CE. In less than a year on the job he rationalized the assortment, repositioned the brand for a new generation of customers, and began rolling out a spate of new-format stores that made shopping there fun, and would serve as the chain-wide template.

On the other side of a turnaround, Theo Wright and his team at Conn’s continued to astound investors with skyrocketing financial results from a focus on furniture and market expansion.

On the product front, retailers learned to embrace restrictive vendor pricing policies, which helped restore profitability to beat-up CE categories, and found even greater margin opportunities outside the industry in such decidedly low-tech businesses as mattresses and furniture.

Meanwhile, appliances took on a new sheen as a recovering housing market and stately $2,000 four-door refrigerators made the once-staid sector shine, and even audio enjoyed a comeback, albeit in the form of wireless Bluetooth speakers and soundbars.

Perhaps most important was the introduction of new video technologies, namely Ultra HD and OLED displays. Unlike 3D before it, these next-gen sets could reclaim consumer expenditures on low-margin tablets and phones, and truly return TV to its traditional role as the tent pole of CE retail.

What follows is a last look back at what may prove to have been a pivotal year for dealers.

JANUARY

Holiday Sales Ho-Hum

The final sales tallies from Holiday 2012 revealed a mixed bag for CE retailers, which battled storms (Sandy), a national tragedy (Sandy Hook) and fiscalcliff concerns on top of the industry’s own challenges. TV weakness in particular put a damper on dealer sales, although major appliances continued their winning streak from Black Friday. For Best Buy, strength in majaps and mobile devices couldn’t offset declines in TV, computing and music and movies, which led to flat comps and a 1.2 percent dip in revenue for the nine weeks, ended Jan. 5. All told, CE retail sales fell 7 percent industrywide during the Nov. 18 to Dec. 22 period, The NPD Group reported.

CES Books Record Exhibit Space

The 2013 International CES set a new record for exhibit space, with 1.92 million net square feet. The 3,250-vendor turnout could portend good things for the industry in the new year, said Consumer Electronics Association (CEA) president/CEO Gary Shapiro in his CES keynote address, as the trade association projected a 2.7 percent increase in factory-level sales, to $209.6 billion. Meanwhile, home appliances were also touted at the CE show, from a growing contingent of majap makers including Dacor, Haier, LG, Samsung and Whirlpool.

Elsewhere At CES …

No. 1 retailer Walmart maintained an unusually high profile at International CES, where it announced an expansion of its disc-to-digital service, added iPhones 4 and 5 to its Straight Talk prepaid cellular program, and copped top video disc sales honors from the Digital Entertainment Group. But CES was also the swan song for the discounter’s CE chief Seong Ohm, who returned to sister chain Sam’s Club soon after the show. Meanwhile, at TWICE’s annual Retail Roundtable, executives from Amazon.com, Best Buy, Nebraska Furniture Mart and Sam’s Club, among other CE merchants, looked past the tepid 2012 holiday season toward a choppy 2013 that will be led by a series of small hits vs. home runs.

FEBRUARY

Super Bowl Drove Big-TV Demand

Retailers and manufacturers enjoyed a big-TV bonanza during Super Bowl season, as demand for 55-inch and larger models provided the industry with a solid kick-off to the new year. To make hay during what is traditionally the second most critical sales period after the holidays, retailers steeply discounted year-end models, including a 55-inch Samsung LED for $900 (Best Buy); a 60-inch Vizio smart LED for $888 (Walmart); and a 70-inch Sharp Aquos LED for $1,700. NPD Group analyst Ben Arnold said 60- to 70-inch panels would prove “the true MVPs of the increasingly challenged TV market,” with unit sales doubling to 7 percent of all TV sales in the first three weeks of the year.

Retailers Report Strength In Non-CE Categories

In what would become a theme in 2013, CE retailers reported that fourth-quarter and full-year results were buoyed by non-CE categories like furniture and mattresses. For Conn’s, the latter spiked 40 percent in comp sales during its fiscal fourth quarter, ended Jan. 31, and majap comps increased 12 percent, which helped offset an 11 percent comp decline in CE. Similarly, h.h.gregg said it will expand its furniture assortment, develop the fitness category, and increase majap market share in lieu of dwindling TV demand — which contributed to a nearly 10 percent decline in total comps for the third fiscal quarter, ended Dec. 31.

Meanwhile Amazon.com reported a full-year loss of $39 million on net sales of $61 billion – an increase of 27 percent – as the e-tailer continued to invest in distribution centers, fulfillment systems and digital content.

Office-Supply Chains Announce Merger Plans

Office Depot and OfficeMax, the second- and third-largest office-supply chains, announced plans to merge by year’s end, resulting in a stronger, $18 billion challenger to top-dog Staples. Projected benefits would include upward of $600 million in annual cost savings by the third year, increased scale and financial strength, and an improved customer experience, the companies said.

Walmart’s CE Share Rises

Walmart U.S. president/CEO Bill Simon said the chain’s CE share edged up 50 basis points during its fiscal fourth, ended Jan. 31, as determined by The NPD Group. The share gain came despite a mid-single-digit decline in CE comps, which he attributed to continued overall deflation in the tech industry and the conversion to digital. The results were balanced by “strong performance” in mobile, as the additions of Apple’s iPhone 5 and Samsung’s Galaxy S II smartphones to its prepaid Straight Talk program drove double-digit comp gains for the category.

MARCH

Best Buy Ends Schulze Squabble, Focuses On Cost Cuts, Dot-Com

Best Buy’s new management team, led by CEO Hubert Joly and star chief financial officer Sharon Mc- Collam, said the company will continue to drive down costs while investing in its online and multichannel capabilities in pursuit of greater profits and revenue. On a fourth-quarter earnings call, Joly said the chain will continue to “aggressively and systematically” attack costs with the goal of cutting $725 million in expenses, while accelerating online growth and optimizing its brick-and-mortar floor space.

Meanwhile, Joly passed another hurdle after founder Dick Schulze’s six-month effort to buy or regain control of the company was foiled. The former chairman was unable to raise the needed capital to take the chain private, and an 11th-hour effort to gain additional seats on the board was blocked by Best Buy’s directors. Joly ultimately extended an olive branch to Schulze, who was named chairman emeritus while his two top lieutenants, former CEO and vice chair Brad Anderson and past president/COO Al Lenzmeier, joined him on the board.

Buying Groups Ebullient About New Opportunities

At their respective spring conventions, the industry’s two largest buying groups, BrandSource and Nationwide, were both bullish about the outlook for independent dealers’ in the new year, thanks to their staying power and new growth opportunities. BrandSource CEO Bob Lawrence said independents have proven to be the healthiest and most stable retail channel, but must stay ahead of the multichannel curve as consumers increasingly embrace mobile commerce. Similarly, Nationwide encouraged its members to embrace new technologies like wireless, connectivity and home automation, and provided a new tool – sales floor tablets – to help them plug into a digital infrastructure that now encompasses such key retail functions as purchasing, merchandising, marketing, training and rebate tracking.

A Changing Of The Guard At TWICE

Longtime TWICE publisher Marcia Grand retired after 27 years with the publication and was succeeded by VP/publisher Ed Hecht. Hecht came to TWICE by way of Meredith Corporation, where he was associate publisher for Midwest Living, and before that held the same post at Entertainment Weekly.

In Memoriam

CE retail bid adieu to three leaders in recent weeks. Louie Blumkin, son of Nebraska Furniture Mart founder Rose Blumkin and head of the family business for nearly 40 years, passed at age 93. During his tenure the World War II veteran built his mother’s fledgling furniture store into the nation’s largest home furnishings emporium, and arranged its sale to billionaire Warren Buffet. Also departed was Richard David “Dick” Lewis, 83, co-founder of the New York CE chain Newmark & Lewis, which he ran for 36 years. The company’s quirky TV commercials, featured the tagline “Dick Lewis Is Watching” – ostensibly the competitor’s prices – made him a regional household name.

Also gone was Rich Woolfson, 54, who served as executive director of Long Island majap and CE buying coop Intercounty Appliance, which is a member of the Nationwide Marketing Group’s NECO Alliance chapter.

APRIL

Best Buy To Launch Samsung Boutiques

Best Buy and Samsung announced a deal to roll out dedicated in-store shops where Samsung hires would sell the manufacturer’s cellphones, tablets, laptops, cameras and accessories. For Samsung, the deal provides a high-profile platform to showcase its wares, while Best Buy will be able to remerchandise its floor space with a concentration of higher-margin merchandise, a key tenet of CEO Hubert Joly’s “Renew Blue” turnaround strategy for the No. 1 CE chain. Plans called for the installation of some 900 Samsung Experience Shops in Best Buy’s flagship and mobile specialty stores by May.

RadioShack Reveals Turnaround Plans

RadioShack’s recently installed CEO Joe Magnacca outlined his strategic plan to return RadioShack to growth and profitability. The roadmap calls for refreshing the brand, assortment and stores. Specifically, a new branding campaign themed “Let’s Play” and a provocative music video TV spot were aimed at a new, younger generation of customers; redundant SKUs are being culled and more private-label product is being added; and new store formats are being piloted that better utilize space and create a more inviting shopping experience. “There is significant opportunity to refresh and improve how we present the brand, how we deliver on our brand promise, and how our customer experiences shopping with us,” the former Walgreens exec said.

Electronics Expo Files Chapter 11

Electronics Expo, the northern New Jersey A/V specialty chain, filed for Chapter 11 bankruptcy protection on Easter Sunday, blaming stricter vendor pricing policies and delayed instant-rebate credits for its woes. President/CEO Leon Temiz said in court papers that new MAP and UPP strictures by Expo’s biggest TV suppliers — plus limits on which lines and models can be sold through third-party websites — led to declining revenue and cash flow and growing operating losses beginning in 2012.

The chain was also impacted by vendor delays in issuing credit for instant rebates, which tied up his company’s working capital and choked cash flow. Compounding the problem was a sharp decline in vendor promotional support as TV manufacturers contended with steep losses of their own, he said. Temiz founded Electronics Expo in 2003 after leaving Sixth Avenue Electronics, the now-shuttered New York area A/V chain that he ran with his brothers Billy and Mike. Expo had two remaining stores, down from seven at its peak.

MAY

CE Sales Flat For Top 100 Dealers

Bankruptcies and steep declines kept total sales in check for the nation’s 100 largest CE dealers, which posted a combined 0.3 increase in 2012 following the prior year’s 5.2 percent gains. Topping the charts in TWICE’s annual Top 100 CE Retailers Report were Best Buy, Walmart, Amazon.com, Apple Stores and Target. Broken out by distribution channel, mass merchants led by Walmart and Kmart saw the greatest CE sales growth last year, up 4 percent, while CE and appliance specialty retailers, led by Best Buy, Fry’s and h.h.gregg, experienced a 3.6 percent decline while remaining the dominant CE channel.

PRO, HES Realign Under ProSource Banner

The Progressive Retailers Organization (PRO Group) and its sister buying collective Home Entertainment Source (HES) began a reorganization under the ProSource name and will focus on four key product categories going forward. The new game plan, outlined during PRO’s annual spring meeting, calls for current PRO and HES members to be organized by size and expertise around four core product categories — stepup TV, legacy audio, “new” audio, and home and commercial control and automation.

ProSource, the three-year-old, $3 billion umbrella organization for the two BrandSource buying divisions, would become the forward-facing franchise for the sister groups under president/CEO Dave Workman. Grouping the members by size and business model will help ProSource better develop tailored strategic programs with manufacturers that include exclusive runs, product launches and promotional sets, executive VP Jim Ristow said.

Senate Passes Online Tax Bill

The U.S. Senate passed the Marketplace Fairness Act, which would compel retailers to collect and remit state and local sales tax on all online transactions. The bill, which was approved by a vote of 69-27 with bipartisan support in the Senate and the endorsement of President Obama, would put an estimated $23 billion into government coffers and exempt e-tailers with outof- state sales less than $1 million.

Supporters, including national retail chains and the CEA, argued that standardized e-commerce tax collection will “level the playing field,” which currently favors online-only merchants. Others, including eBay and House Republican leaders, believe the tax collection apparatus is too complex and would harm small businesses. The measure moved onto the House for review and possible revision.

JUNE

CE Biz In Recovery Mode: CEA

After five punishing years of recession, devaluation and consolidation, the CE industry has begun to rebound and is poised for long-term growth. In a presentation by CEA chief economist and senior research director Shawn DuBravac at the trade group’s CE Week Research Summit, tablets, smartphones and Gen Y audio devices were cited as near-term sales drivers, along with new gaming systems and the trend toward extra-larger-screen TVs. Together they will fuel a 2.7 percent increase in 2013 CE sales, DuBravac projected, while Ultra HD TV and OLED displays will further invigorate video over the next two years as manufacturers ramp up production.

Top 100 Majap Dealers Gaining Steam

Major appliance retailers rode out the worst of the recession with the 100 largest returning to growth mode last year following a flat performance in 2011. According to TWICE’s annual Top 100 Major Appliance Retailers Report, the nation’s largest whitegoods dealers posted a cumulative $24.7 billion in majap sales in 2012, representing a 2.1 percent increase year over year. Contributing to the gains was the start of the housing market recovery and greater pricing discipline by manufacturers and national chains. Leading the list was Sears with $7.1 billion in appliance sales; Lowe’s, racking up $5.3 billion; The Home Depot with $3.7 billion in white-goods revenue; Best Buy with $1.8 billion; and h.h.gregg pulling in $935 million. But the distinction of greatest percentage growth went to Appliance Connection, ranked 91st. The family-owned discount business with a single store in Woodbridge, Va., generated $11 million in majap sales, representing a 37.5 percent increase.

Distributors Discern New Growth Opportunities

Distributors cited new categories, and one traditional one, that could help lift retail businesses this year and next. In a special TWICE report, top execs looked to updated gaming platforms from Microsoft and Sony to help revive that sector, and see promising long-term prospects for Ultra HD TV once price points hit the mainstream mark. Until then, those that carry major appliances are enjoying the upsurge in whitegoods demand as the U.S. housing market recovers and the economy continues to firm.

Expo Back From Bankruptcy

Electronics Expo exited Chapter 11 bankruptcy protection after its owner Leon Temiz essentially bought his company back from creditors for $1.5 million. The reborn business, operating under the newly created parent company Glamazon, will open small, 4,000-square-foot boutiques rather than its traditional 10,000- to 16,000-square foot boxes, he told TWICE, and will place greater emphasis on brick-andmortar vs. online sales.

JULY

Dealers Prep For Positive Q4

Merchants predicted a merry, though hardly miraculous, fourth quarter as they begin to lay in their plans for the holiday selling season. Top categories would likely include gift-friendly tablets, fashion headphones, wireless speakers and next-gen gaming consoles, although continued softness in the core TV category continues to vex dealers, retailing execs told TWICE. Merchants were also hopeful that the recent pricing restraints put in place by manufacturers would hold through the holidays, and that Black Friday sales would be limited to pre-planned promotional events.

Conn’s Looks Beyond Its Borders

The multiregional furniture, CE and appliance chain revealed in an investor presentation its plans for a major build-out from its Texas base. Fueled by a new store format that has accelerated sales of high-margin furniture and mattresses, the company envisioned a 200-store chain that spans the country’s southern tier, from Nevada and Colorado in the Wests to Georgia and the Carolinas in the East. Chairman/ CEO Theo Wright assured investors that the company has the resources and wherewithal to support the expansion, and that it would step up the pace of store openings in 2015.

Camera Sales In Decline For Top Dealers

A crippled global economy and disruptive smartphone sales continued to press on the once-thriving point-andshoot camera business. The impact could be seen in the cumulative 1.7 percent sales decline for the country’s leading digicam and accessories dealers last year, as discerned by TWICE’s third annual Top 25 Digital Imaging Retailers Report. A bright spot came from the margin-rich DSLR camera segment, which grew 25 percent in 2012 and helped ranking dealers recover from their 7.2 percent drop the year prior. The direct channel, which includes retailers like Amazon.com, Newegg, QVC and HSN, enjoyed the biggest share gain – 1.7 percentage points – giving it control overly nearly 23 percent of the market as consumers surfed for bargains. In contrast, multiregional CE and appliance chains including Best Buy, h.h.gregg and Fry’s relinquished 2.7 percentage points of camera share, to 29 percent of the market.

AUGUST

Best Buy’s Prospects Rebound

Best Buy turned a major page with a surprise second- quarter earnings increase that stunned investors and silenced critics who had written off both the retailer and big-box CE retail. The chain’s better than 2,000 percent profit spike sent Best Buy’s stock 13.2 percent higher the day of the earnings announcement and also boosted shares of regional contemporaries h.h.gregg and Conn’s. But beyond the income increase and stabilizing sales, Wall Street was also wowed by the ability of CEO Hubert Joly and celebrated chief financial officer Sharon McCollam to make good on their turnaround promises under the “Renew Blue” banner.

h.h.gregg Evolving Product Mix

h.h.gregg transformed its CE assortment as legacy categories like cameras, camcorders, GPS devices and MP3 players are supplanted by smartphones and tablets. On an earnings call, president/ CEO Dennis May cited an industry shift from traditional non-connected devices to connected IT and mobility products like tablets. To capitalize on the trend, the multiregional majap, CE and bedding chain is rationalizing SKU counts in traditional CE categories and will downsize its laptop and desktop selection while reallocating additional floor space to tablets.

The company also cut its TV assortment 10 percent by dropping entry-level and 40-inch and smaller screen sizes, and increased its assortment of fully featured models in screen sizes of 60 inches and larger by 15 percent. The moves came as the retailer posted a $1.3 million loss for the fiscal first quarter.

Nationwide Cites Solid CE Sales

CE sales for the Nationwide Marketing Group have been robust, executives reported during the group’s fall show, with new display technologies and attachment sales leading the recovery. CEO Robert Weisner noted that CE sales “stopped in 2007 and 2008” amidst the Great Recession, but that consumers are now “coming back to the marketplace” in pursuit of big-screen TV deals and the new Ultra HD and OLED entries. CE comprises about 20 percent of the group’s $14 billion in annual sales.

Big-Screen OLEDs Bow At Best Buy

The first consumer big-screen OLED displays reached the market when LG Electronics officially launched the category’s debut model at a Best Buy Design Center showroom and sold the first sets through its Magnolia store-instore departments. The TV has a 55- inch curved-screen large-format OLED FullHD 1080p display, and carried a UPP sales ticket of $14,999. LG made the controversial decision to launch the set exclusively through select Best Buy Designer Showrooms due to very limited availability and the desire to get the word out on a national level. Samsung similarly began to sell its Ultra HD models through Best Buy’s Magnolia shops this month.

UHD Prices Plummet

Pricing on new big-ticket Ultra HD TVs started plummeting faster than the consumer confidence index, with word from retailers that Samsung followed Sony’s lead in making price reductions on recently introduced Ultra HD LCD TVs. Similarly, LG released a statement from Korea that it was planning to soon introduce new lesser-featured 55- and 65-inch Ultra HD TVs that potentially could also impact current price thresholds. Retailers said Samsung’s UN55F9000 55-inch Ultra HD set will now carry a new $4,499 UPP tag, down $1,000 from its previously listed price.

SEPTEMBER

UHD Prices Continue To Slide

The Ultra HD TV category may be setting a new record for price declines on new CE technologies, as top-line manufacturers including Sony, Samsung, LG and Sharp all revealed price cuts and/or new model introductions at lower price thresholds. Most vendors cited competitive price moves and improved production efficiencies as driving the price reductions, although TV makers are also competing against Chinese producers Seiki and TCL, which have announced prices starting at less than $2,000 and $1,000, respectively, for smaller screen Ultra HD products.

BrandSource Driving Traffic, Margins

BrandSource laid out a multipoint program at its fall convention to help restore pricing and profits and drive foot traffic to its members’ showrooms. Some of the initiatives, like a service to help dealers foster positive online reviews, were new; others, like the group’s prescient SleepSource store-within-astore bedding shops, predated the current rush to mattresses and Best Buy’s burgeoning in-store shop strategy. CEO Bob Lawrence also pledged to reject vendors and programs that emphasize low prices over profits, holiday promotions aside. “We will no longer be the poster child for manufacturers that want us to promote low-margin programs to you,” he said.

Majap Labor Day Promos Widespread

If July 4 majap promotions weren’t rampant enough, holiday advertising was up even higher during Labor Day, according to a report by TWICE market research partner Gap Intelligence. While refrigeration was the secondmost advertised category, behind laundry and ahead of ranges, it garnered the largest increase (5 percent) in ads over Independence Day. h.h.gregg ran the most Labor Day refrigerator print ads (nearly a quarter of all placements), followed by Sears and Best Buy. Examined by brand, Samsung dominated the promos with more than twice those of its next closest competitor, representing a 27 percent increase over the July 4 period.

OCTOBER

Sales Flat, Profit Up For NATM

The NATM Buying Corp. reported flat sales of $6.5 billion for its fiscal year, albeit with improved profitability thanks partly to dramatic growth in majaps. At the buying group’s annual meeting, president and executive director Bill Trawick said appliance sales for NATM’s 11 big-box, multiregional chains “far exceeded” the industry’s own robust growth of 9 percent to 10 percent. Conversely, TV, a core member category, has hit bottom, he noted, and dealers are beginning to rebuild that business with 55-and-over-inch sets that are in strong demand and protected by unilateral pricing programs. He also agreed with observations from other buying groups that independent dealers are enjoying a resurgence as consumers have learned to appreciate their expertise and service.

ProSource Prepares For Bumpy Holiday Ride

The ProSource buying group anticipated a somewhat “bumpy” ride for CE retailers this holiday season as dollars continue to swap out of core categories like TV and computers into mobile and other next-gen devices. Speaking at the group’s annual CEDIA soiree, president/ CEO Dave Workman also predicted that gaming will do well this season thanks to major platform updates from Microsoft and Sony, and noted that pockets of audio, including Bluetooth speakers and soundbars, “are off the chart.” And while Ultra HD and OLED displays won’t be a big factor in the fourth quarter, ProSource dealers will play an important role in providing an educated sale to the consumer as demand and production ramp up next year, he said.

Holiday Sales Projections Up Slightly

Trade association forecasters predicted modest sales gains for Holiday 2013. CEA said strong online channel sales will help drive the total November through December take up 2.7 percent, while the National Retail Federation (NRF) was more optimistic, projecting a 3.9 percent increase for the same period year over year, again due to gains in e-commerce. Both trade groups projected increases of as much as 15 percent for the online channel, while the International Council of Shopping Centers (ICSC) forecast online sales growth at 13 percent for November and December.

At the other extremes, ShopperTrak, which measures retail traffic, forecasted a 2 percent increase in total holiday sales, while Deloitte pegged it at 4.5 percent for the November through January period.

CEDIA Attendance Rebounds

The custom-installation channel appeared to be on the mend, judging by CEDIA Expo attendance, exhibitor feedback, installer sentiment, and the number of multi-room-A/V, home-control and component-audio introductions at the annual show. Expo attendance rose 5.9 percent to 17,900 following a 4 percent dip in 2012, and the number of exhibitors grew to more than 470, from more than 450 last year. Moreover, preliminary findings from a CEDIA survey found that systems integrators expect that their gross revenues will have risen 16 percent this year to an average of $1.5 million following last year’s 4 percent dip.

NOVEMBER

Retailers Reveal Holiday Plans

Unlike past years when Black Friday sales plans were kept under tight wraps, retailers openly touted their marketing and promotional programs in advance of Thanksgiving weekend. Strategies included expanded assortments, increased multichannel options and uberadvertising campaigns. Many, including Sears, Target, Best Buy and Walmart, also opted to not only open on Thanksgiving Day, but to do so hours earlier, while Amazon did them all one better by kicking off its Black Friday flash sales a week in advance. But Walmart, which pledged to “win” the holiday weekend with its largest-ever Black Friday inventory and guaranteed in-stocks on select items, countered by matching Black Friday prices from Best Buy, Target and Toys“R”Us on select CE and toys a week before the big day.

Retailers Say Ultra HD Exceeding Sales Expectations

Retail panelists at a TWICE/CEA Ultra HD Conference reported that sales of extreme resolution TVs are beyond expectations. Tom Campbell, corporate director of Video and Audio Center, said Ultra HD will go “well beyond acceptance of HDTV,” while Robert Zohn, principal of Value Electronics, said the sets have also lifted attachment sales of high-margin accessories like Sony’s 4K Unlimited server, sell-through of which has been “tremendous.” Brian Siegel, merchandising and operations VP for Sony Stores, said the chain placed its Ultra HD floor models at the center of the stores and allows customers to create their own demo content with their smartphones, as well as view native and up-converted content from the Sony player, DirecTV and Blu-ray discs. Panelist Shawn DuBravac, CEA chief economist and senior research director, noted that if one compares the adoption curves of DVD, HDTV, Blu-ray and Ultra HD, “We are getting right we’re we should be as we head into the fourth quarter.”

RadioShack Expands Concept Stores

RadioShack opened another round of new concept stores this month, in Detroit, Philadelphia and near corporate headquarters in Fort Worth, Texas. The so-called “high-touch” stores were designed from the ground up with interactive demos, touchscreen displays and more intuitive floor plans to enhance the shopping experience. To date the concept stores have generated double-digit comp sales, CEO Joe Magnacca said, and the company is on track to open 100 high-touch variations and bring some of their features to all 4,300 RadioShack locations by year’s end. The struggling chain said it would also open a pair of temporary “pop-up” stores in Time Square, and would launch a national holiday marketing campaign.

Dealers Dreaming Of A White (Goods) Christmas

CE and appliance merchants anticipated a solid, if not stellar, holiday season as consumers get past governmental concerns and resume some measure of good cheer. Deep discounts on TVs and tablets will help get shoppers in the holiday mood, a cross section told TWICE, although tight supplies from cautious TV vendors could prove troublesome come Super Bowl. But it’s white goods dealers that stand to benefit the most this quarter as the resurgence in majaps, and its greater role in Black Friday promotions, compensates for continued declines in TV and other legacy CE categories like GPS, laptops and digital imaging, they noted.

DECEMBER

Black Friday Sales Slow

The holiday weekend sales results are in, and apparently Black Friday proper didn’t fare as well as Thanksgiving or Cyber Monday. Turkey Day store openings ate into Black Friday sales, while the online channel continued to post record gains on Monday. According to MasterCard, total retail sales on Thanksgiving rose 23.7 percent, while Black Friday sales were only up 2.9 percent. Combined Thanksgiving and Black Friday sales rose just 2.3 percent, to $12.3 billion, market research firm ShopperTrak said, while sales for the four-day holiday period through Sunday actually slipped 2.9 percent year over year, the National Retail Federation (NRF) reported.

The biggest Thanksgiving beneficiary was CE, which enjoyed triple-digit growth on “Red” Thursday over 2012, and saw a slight decline on Friday, as consumers proved eager to leave the dinner table for doorbuster deals on tablets, TVs and other tech devices. Meanwhile, Cyber Monday sales rose 16 percent year over year to hit a record $2.29 billion, Adobe Digital Index reported. The company said it was the fifth consecutive day of record online sales, beginning on Thanksgiving.

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