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Analysts Saw Calmer Black Friday For TV Sales

NEW YORK — Black Friday ad placements done well in advance of the promotion date, Thanksgiving Day openings and heavy online promoting seemed to spread out the crush of the traditionally frenzied TV holiday bargain hunting period, category analysts told TWICE.

Although stampedes of TV-loving bargain hunters were well documented in some select areas and venues, the mania was typically less volatile, though still quite heavy, over the long holiday shopping weekend.

While much of the activity was drawn to typical commodity- type FullHD flat-panel sets, this year’s Black Friday ads featured new big-screen Ultra HD TVs, some at prices less than $1,000.

Paul Gagnon, IHS/DisplaySearch TV market research director, said that for the San Diego area at least, “Best Buy was as busy as I’ve ever seen them on Black Friday with strong traffic for TVs.”

Specifically, he said, 40-inch LCD TV seemed to be the go-to size for consumers this year.

“Fifty-inch promotions by Panasonic at Best Buy ($199) and Emerson at Walmart ($218) were key door buster items,” he added, and “TV’s overall seemed to enjoy a resurgence in popularity this year, with the focus on upgrading in size.”

Indeed, both the holiday shopping period and the emergence of limited 4K Ultra HD TV specials proved to be very beneficial to Best Buy.

Aram Rubinson, Wolfe Research CFA tracking retail hard lines, upgraded Best Buy shares in a memo following the big weekend citing: “a ballooning cash balance; cost cuts that have enabled [Best Buy] to be price competitive, potential market share gains from the likes of Sears and the prospect for market growth thanks to a TV product cycle.”

Rubinson pointed out that in recent weeks 4K UHD TVs have had an expanded positive effect on Best Buy’s performance. He cited the higher average prices for 4K TVs helping Best Buy “despite deflation.”

“In each of the past four weeks, 4K TVs have comprised ~15 percent of total TVs offered at [Best Buy] (~48 of ~300),” the Wolfe Research memo said.

“In all, 17 of the 4K TVs are priced over $3,000 (was 17); five are priced $2,500 to $3,000 (was seven) and five are priced $2,000 to $2,500 (was six). We find that 16 of them are priced $1,250-$2,000 (was 12). In all, the median price of a 4K is $2,500, flat from last week and down from $2,800 at the onset of our survey.”

To put the importance of Black Friday to the TV category in perspective, Stephen Baker, The NPD Group industry analysis VP, observed that last year’s Black Friday shopping mania week accounted for 15 percent of all TVs sold, compared with 13 percent of all tablets and 6 percent of all computers.

As for 2015, Baker, who observed shoppers during this Thanksgiving/Black Friday period in his local Virginia market, said that despite openings on Thanksgiving Day and early pre-Black Friday specials offered online and elsewhere this year, “I saw nothing that would dampen my enthusiasm for the potential success of the holiday, nor did I see anything to make me see the potential for overperformance.”

He noted his feeling based on anecdotal evidence that this year offered “more of the same,” with a somewhat less-frenzied overall atmosphere in most locations.

“Offer them great prices, on great compelling cutting- edge merchandise and they will put up with a lot of inconveniences to take advantage of them,” Baker said in his post-Black Friday blog. “While we don’t have a feel for what was sold, we can be pretty sure that TVs, video games, tablets, notebooks and prepaid phones were the best sellers, since those were the products most promoted and most highly discounted.”

Deirdre Kennedy, Gap Intelligence television industry analyst, said this Black Friday, “many retailers released their ads weeks ahead of time, giving consumers time to plan their shopping strategies, and in many cases cement their purchases ahead of the rush by taking advantage of early online deals.”

The usual suspects were on hand with the greatest number of ads and the largest discounts, she said.

“Samsung blew the competition away with 48 percent of all TV print ads placed, trailed by LG and RCA with 9 percent each to round out the top three. Samsung also offered the highest percentage discounts of any brands this year, with a 35 percent average discount along with Haier and Sharp at the top of the pack.”

As expected, 4K Ultra HD had a large presence this year, appearing in 10 percent of all Black Friday ad placements, Gap said. Reports from the sales floor indicate that the units gathered strong interest, with many shoppers walking out with high-resolution TVs.

“Samsung came out swinging with an astonishingly low-priced 55-inch model made specifically for Black Friday and priced below $1,000, which likely caught the attention of the typical Black Friday shopper,” Kennedy said. “Assuming that sales for the model did well, we can look forward to a growing assortment of affordable 4K units throughout the next year.”