Merchants Say Thin Will Be In This Holiday Season

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It appears that less will be more in the fourth quarter.

According to merchants queried by TWICE, ultra-thin TVs and diminutive netbook computers should continue to drive business through the holiday selling season.

That's not to say that their standard-size siblings will be slouches. Dealers, distributors and buying groups are also placing big bets on full-array LED LCD-TVs, which, despite their substantially higher tickets, are winning consumers over with their eye-catching picture quality.

Traditional notebook and desktop PCs will also get a boost when Microsoft formally releases its Windows 7 operating system this fall, observers said.

To help boost margins, merchants will also focus on attachment sales of sound bars, premium headphones, iPod docks and other audio accessories, while Blu-ray Disc players could finally find broad adoption at sub-$200 prices.

“LED and super-flat screens will be the big buzz for Q4,” observed Jon Myer, president/CEO of MyerEmco AudioVideo. “LCD has been very strong, and we're even seeing strength in auto sound,” particularly in super-premium car installations, he said.

“LED TVs really seem to be a nice upgrade,” agreed Jeff Davis, senior sales VP at D&H Distributing. “It's a great technology. They have an exceptional picture, a high refresh rate and high ASPs [average selling prices].”

Edge-lit LED models additionally have form factor and energy savings in their favor, noted Almo president/COO Warren Chaiken. “The thinness is incredible, there's a focus on ecology, and the picture's amazing,” the distributor said.

Dave Workman, executive director of the Progressive Retailers Organization (PRO) Group, also expects “a lot of sub-$1,000 activity” within the TV category this Christmas, creating a no-man's land for models priced between $1,000 and $2,000. The success stories, however, at least for PRO Group dealers, will be at the upper-end in LED, he said.

Jim Ristow, executive VP of Home Entertainment Source (HES), also sees opportunities in audio, and has been advising the buying group's members to “focus on non-traditional categories for attachment,” including sound bars, docks, premium headphones and two-channel sound. “We're refocusing on audio as an attachment, and are demonstrating that experience to our flat-panel customers,” he said.

Conversely, last year's yuletide darlings, PNDs and digital photo frames, are likely to lose momentum as the latter exhausts its novelty factor and the former finds increased competition from navigation-capable cellphones.

“ASPs for GPS have dropped considerably, and iPhone has cut into sales,” said D&H's Davis. “There's no real reason to upgrade.”

But Almo's Chaiken still sees “a lot of opportunity” in the maturing category, thanks to updated features like calling capabilities, Bluetooth connectivity and more user-friendly interfaces. “Besides, a phone is not the best way to use GPS,” he said.

Chaiken added that Blu-ray Disc players may finally “be ready for primetime” as most models fall below $200 and spot promotions drive price points even lower.


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