Merchants See Uphill Battle For Holiday Sales

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What is your outlook for the back-to-school and holiday selling seasons? Will the consumer come back in a meaningful way? How are you planning for the fourth quarter?

Dave Workman, PRO Group:

Even though retailers tend to be an optimistic lot, the prudent approach is to think about the balance of the year with a conservative view. There will be pockets of “hot products,” but these seem to be displacing purchases in other categories rather than being additive as they have been in the past.

Michael Vitelli, Best Buy:

The big drive times are in front of us. Watch for some great bundles from us for back-to-school.

We are currently deep into our holiday plans and, naturally, we won’t tip our hand. I can tell you, however, that we are really excited about smartphones, e-readers, tablets, innovations in TV, new gaming concepts such as Kinect and Move, and our used-gaming initiative.

Fred Towns, New Age Electronics:

Consumers are spending more time at home and are very enthusiastic about engaging in new technologies to create an in-home entertainment experience. Today’s CE products have also become very sleek and stylish. Headphones, for example, are available in-ear, over-ear and more … plus they are packed with the greatest features and capabilities, which is really appealing to trendy consumers.

We rely on a proven rolling forecastbased model that helps our retailers have the right product offering to deliver unique solutions for their customers through the whole year.

Dan Schwab, D&H Distributing:

We are very enthusiastic about the back-toschool and holiday seasons. We believe the consumer has come back more so than in 2009, but it is still a challenging market, with ebbs and flows. Our backto- school shipments have been above expectations in categories such as mobility, which should continue through the holidays, and we had an extraordinary response to our new virtual back-to-school [interactive online seminars] event.

At retail, we see ongoing momentum if not necessarily explosive growth, as many companies reach the anniversary of the softness of last year’s market, and the pent-up demand of the consumer starts to manifest itself.

Ross Rubin, The NPD Group:

As usual, LCD TV and notebooks should lead the charge. There are a lot of attributes on the TV side that retailers can promote, including faster refresh rates and LED backlighting.

This will be a holiday that will see new categories step up to try and off set the slowness that we’ve seen in portable electronics categories such as traditional MP3 players and digital cameras. The iPad has a great opportunity, as could a revamped, FaceTime-enabled iPod touch. E-reader pricing is becoming very attractive, but the available content continues to limit the potential.

Jim Ristow, Home Entertainment Source:

We believe we will come out of the dog days of summer with abundant promotions. Consumers are still looking for value and a reason to part with their precious cash. Both the vendor and our members realize this. “Promotions” will be the word.

We believe that there will be plenty of product to go along with these promotions, and the consumer, with pent up demand coupled with enticing offers, will buy. We are planning right now to ensure that we have the right promotional opportunities for our members to compete for that customer.

David Pidgeon, Starpower:

The remainder of the year will continue to be challenging, similar to the first half of the year. There is some optimism that regardless of the results of the November midterm elections, consumers will have renewed confidence to return to the stores.

I don’t see how the consumer returns in a meaningful way until there is sustained growth and improvement in the unemployment numbers. Our business is also impacted by home sales that need to recover. In our historically large category of $15,000 to $35,000 purchases, people are afraid to spend.

On the bright side, customers insulated from economic conditions are finding Starpower like never before as smaller dealers and integrators struggle to stay in business. Our sub-$5,000 orders also continue to grow at an amazing rate as our clients downsize their purchases.

Notwithstanding all of the negative news, we are going forward in a cautiously optimistic vein. We are not settling for status quo and are appropriating advertising budgets to align with the new complexion of our business. We will not fall down the slippery slope of price, but will take advantage of the departure of and weakness in our competition for larger orders.

Jeannette Howe, Specialty Electronics Nationwide:

We are looking to the holiday selling season with conservative optimism. In aggregate we will sell more goods, but the trend over the last couple of years has been to sell more goods and make less money.

I think we will again see a lot of bundling to create margin opportunities, and you will see the independent channel bundling products as well. I would also expect the mass merchants to start the holiday season earlier than ever. In a few years, Black Friday may be the Friday before Labor Day.

The iPad brings a lot of potential to the market. It captured the hearts and minds of early adopter CE consumers in the early summer, and we lost business to the iPad phenomenon. But now we have the opportunity to wrap control systems and other functionality around the iPad.

Warehouse Direct, our inventory fulfillment solution for buying group members, will be geared up for the holidays so we have the right inventory at the right price. Orders are already placed with our primary manufacturers. Warehouse Direct’s online ordering system allows our members to increase turns, buy at competitive prices, and maximize their return on investment.

Karen Austin, Sears Holdings:

We are cautiously optimistic. We believe that consumer behavior has continued its shift toward value and we will continue focusing on delivering superior service to our customers.


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