In this second installment of TWICE’s annual pre-holiday roundtable, leading tech distributors weigh in on the need for aggressive seasonal promotions amid strong demand, possible shortages and a flush consumer.
TWICE: Will the promotional climate ease this holiday season, given recent retail strength?
Marc McClure, senior VP, commercial sales U.S., Tech Data: Irrespective of strength in the economy and discretionary spend that drives retail, the competition for eyeballs and consumers will be as fierce as ever. As such, I would expect the promotional climate to be strong, and successful retailers will need to be aggressive in how they reach their audiences through social media platforms and with an excellent omni-channel experience.
Dennis Holzer, executive director, PowerHouse Alliance: There is always a promotional strategy around the holidays for brick-and-mortar dealers, but with retail going strong, we expect there will be less price slashing that has historically led to decreased margins.
That said, much of our dealer business focuses on professional installation or “do-it-for-me” sales calls, which in turn leads to larger and more profitable projects. We continue to encourage our distributor members and their dealers to push effective and insightful marketing campaigns that speak to their customers, and to reach out to them on system upgrades and new technologies in order to keep the conversation going. A continuous conversation builds trust, solidifies dealer-customer relationships, and increases the likelihood of loyalty and repeat sales.
Tate Morgan, president, Petra Industries: Promotional opportunities are still a key tenet of fourth-quarter success. Q4 promotions encourage brick-and-mortar and online traffic. Our team has gone to great lengths to ensure and curate strong promotional opportunities, and we expect to see these opportunities add to the financial retail success of Q4.
Fred Towns, president, New Age Electronics: Despite recent retail strength, we still anticipate a very promotional holiday season as competition heats up around hot product categories.
We also expect bundling options that deliver a complete solution to play a big part in holiday promotions. It’s important to promote ease of use and the ability for customers to leave the store with everything they need, whether that’s all the accessories for their TV, lighting and switches with their digital assistant devices, or headsets and controllers to customize the gaming experience.
John Yodzis, president/CEO, Dow Electronics: We feel that our retailers, and retail in general, stand to gain great ground this year. With the increase in interest in smart-home devices, giving customers the opportunity to see and touch the product is important.
Our customers can provide the hands-on experience an end-user wants, plus they offer the expertise to consult with them on what technology will work best together to deliver the ultimate smart solution.
Trevor May, executive director, vendor management, D&H Distributing: It’s hard to predict the exact level of this year’s promotional strategy for retailers, but we’re leaning toward thinking it will be an aggressive year — or at least on par with last year.
While consumer purchasing may be robust, retailers and e-tailers will still want to compete for those dollars, and they're typically willing to make deals for that business.
Helge Fischer, executive director, Catalyst AV: This holiday season there will still be retail pressure on pricing, especially on all Internet products.
These products are available in a broad selection to the consumer, so this is more about convenience for the customer; have the installer add Nest- and Ring-type products as he is in the house anyway and his customer will thank him later on for the convenience.
The installer channel has to be competitive, but the good installers provide so much more to the customer than a regular retail store or the Internet provides, so pricing is not the only parameter.
Curt Hayes, president/chief financial officer, Capitol: I doubt the promotional climate will ease. As happy as we are that business is solid, there are clear expectations on the part of the consumer. Promotions are an industry holiday tradition. No matter how we are doing in the CE and CI channels, there is always room for a powerful boost, especially during the holiday season.
Andy Zeinfeld, global president, Brightstar Echo and Gear: I don’t think promotions will ease. I think we’re in a hyper-competitive industry and the long-term rewards are far too high not to drive market share.
Both online and in-store retail will only keep getting stronger as we get into the holiday season. As long as OEMs keep innovating, we’ll continue to be part of a super exciting category.
Jack Halperin, senior VP, dealer channel division, Almo: We believe there will still be broad-based, traditional Black November promotions created by most manufacturers across various business segments.
However, as manufactures seek ways to effectively manage the challenges associated with pending tariffs, related consumer offers may not be as aggressive as in years past and sizable shortages in production of various products could be a stark reality.
Seth Evenson, customer experience management director, AVAD: We expect the promotional climate to continue to be competitive through the holiday season, for both retailers and manufacturers.
Although consumer confidence is on the rise and the average spend is up, storefront retailers need to be extremely competitive, especially against online retailers, to capture the consumer. Consumers have access to more choices for electronics, which has required manufacturers to push the envelope for innovation and create products that consumers will buy over the competition.