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Dealers Dream Of Christmas Joy At Retail

NEW YORK — Dealers and
distributors are girding for a
tough holiday selling season
based on lackluster summer
and back-to-school sales.

If the current environment is
any indication, cost-conscious
consumers will eschew stepup
products for good-enough
fare, as evidenced by current
supply constraints in 720p
plasma and a surplus of higher-
end LED TVs, industry executives
told TWICE.

Even 3D TV, which had been
touted as a possible
sales and margin savior,
could fall short of
fourth-quarter expectations
due to
pricing that’s beyond
most household

In response, manufacturers,
and buying groups are
already planning aggressive Black Friday promotions that
may begin earlier, and last longer,
than last year’s extended
event period.

Dealers are also
placing bets on a
host of connectivity
products — inc
lud ing IPTV,
wireless audio, netbook
and slate computers,
and motionsensor
gaming consoles
— to ensure a well-stocked
sleigh for Santa.

“This economy is the new normal,”
observed Mike Temiz,
president of Sixth Avenue Electronics,
“and you’ve got to learn
how to do business in it. It’s not
the end of the world, but there’s
less room for error. You have to
be stronger and work harder and

To claim its piece of the holiday
pie, Sixth Avenue will be
well-represented in 3D video
games; audio components, including
thinner loudspeakers to match flat-panel displays; Flip-style
flash-memory HD camcorders; and,
of course, TV.

“TV is the gateway to the customer’s
house,” said Tom Galanis, Sixth
Avenue’s operations VP, who foresees
strong fourth-quarter demand
for IPTV featuring
Skype and other popular
apps, as well as 3D. “Innovative,
technologies delivered at
a great value will drive
our business,” he said.

Mike Decker, electronics
marketing senior
VP for the $12 billion Nationwide
Marketing Group,
said member dealers are presently
changing out their showroom floors
to make way for the newer TV technologies,
including 240Hz LED and
ultra-thin edge-lit models with IP and
3D features.

“It allows them to sell a higher mix,”
Decker said. “Our guys are focused on
maintaining margins — they realize
that low-price activity isn’t pulling in
the dollars.” The challenge, however,
is balancing that against Black Friday
planning to counter big-box promotions,
and a recession-weary customer
who hasn’t responded to Fourth of
July or back-to-school sales.

“It’s been an exceptionally slow summer,
and unfortunately it sets the tone
for the fourth quarter,” Decker noted.
“Even promotions aren’t driving the customer to purchase high-end products
— instead, they’re looking at a
price tier of $1,000 and below.”

Bill Trawick, president and executive
director of the $5 billion NATM
Buying Corp., concurred. “The TV
business came to a halt this summer,
and there’s a glut due to cancelled orders.
Only 3D and 720p are selling,
but higher-end LED is not moving
as well as we’d like.”

Trawick said the excessive
summer doldrums and occasional
weekend spikes
are making it difficult to
plan out very far ahead.
“Our guys are all planning
ads now, but it’s
very, very tough to figure
out what’s happening
in this industry due to
the ups and downs. Some
are planning it week by week.
But TV is definitely worse than last
year, and we may see some softness for

Warren Chaiken, president/COO
of national CE and majaps distributor
Almo, believes TV demand will return
with football season. “The game’s not
on until they snap the ball,” he said.
“We’ve had a very good run so I’m not
surprised at the weakness now.”

Chaiken said TV sales will also be
spurred by a wealth of third-quarter
promotions, although which technologies
win out is anybody’s guess.
“People will be buying a lot of TVs,
although it will be interesting to see
what they buy. LCD? Lower-end
LED? Better LED with 3D? I don’t
know the answer yet.”

Chaiken believes 3D TV may serve
more as a traffic-driving curiosity this
Christmas than as a direct sales generator
— at least until glasses are standardized
— and also expects another
boffo season for GPS despite competition
from cellphone apps.

“Personal navigation is still very
strong,” he said. “You can get a wonderful
device now for $200 or less.”

Still, given the marketplace uncertainties,
Almo is planning “more
conservatively than aggressively” as it
forecasts eight to 12 weeks out with
its major manufacturers, although
as a distributor, “it is our job to be
in stock for our customers,” Chaiken

Conversely, fellow Pennsylvania distributor
D&H Distributing is taking
a more aggressive stance on inventory.
“I think we will see some growth this
holiday season,” projected purchasing
VP Rob Eby. “I do think people will
spend money, even if this may be the one time they do spend significantly
this year. We are planning aggressively
to be ready for what we hope will

To that end, the company is stocking
up on LED and 3D TV, mobility
products including notebooks, tablets
and Android devices; storage solutions,
including “cloud”-based products
like Pogo Plug’s plug-in personal
cloud storage device and a cloud-accessible
USB key from myDitto; and motion-
and sound-sensor gaming consoles
including Xbox Kinect and Sony
PlayStation Move.

Similarly, David Berman, training
director of the Home Technology
Specialists of America buying
group (HTSA), sees ripe opportunities
within the home, health and security
categories this holiday season
as baby boomers age, energy bills rise,
and Apple’s iPad and iPod devices replace
pricier touchpad interfaces on
whole-home control systems.

“High cost was a roadblock to energy
management and monitoring, but
the Apple platform is generating interest
and a whole new client base,”
he said.

HTSA executive director Richard
Glikes took a more philosophic slant.
“I’m positive on the fourth quarter,” he
told TWICE. “The country is desperate
for good news, and with businesses
now structured so lean, all we need
is a modest lift to help cash flow and