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New Tech, Improving Economy Pave Way For Year-End Growth

As we look back at the last six months and turn to toward the second half, there are plenty of hopeful signs for the combined CE and major appliance industries — and more than in the last few years.

A better economy and improved consumer confidence are key factors, but the fundamentals of both industries have improved. New technology has debuted that consumers are learning about and are interested in. Just as importantly, retailers and manufacturers are learning how to market these new products successfully.

Of course, as in any year, the process of getting the word out began at International CES in January, where TV makers rolled out a wide variety of Ultra HD to a public that is getting to understand and embrace the format.

But just as important, CES was a launching pad for the Internet of Things (IoT) concept, where CE and white-goods products will have the ability to interact with each other and their owners in the next several years. That was evident with several major appliance makers introducing “intelligent” products, something that will be more and more commonplace.

Of course, drones have generated a lot of headlines in the past year — some positive and some controversial — and they were all over CES. They have been hovering, figuratively and literally, all during the first half waiting for widespread consumer acceptance.

Wearables and watches were all over CES and introductions continued during the first half. Plenty of smart watches have been unveiled and will continue to debut this year, but the Apple Watch stole the spotlight — as expected — and has a backlog of orders.

The connected home, a cousin of IoT, is a concept that has been kicked around for years and now seems to be more fully understood by consumers.

What’s more, retailers have finally grasped how to sell the connected-home concept in all its entertainment, communications and security flavors. For instance, two major buying groups, the Nationwide Marketing Group and BrandSource via its ProSource operation, have successfully made the connected home a major priority with a variety of strategies.

Speaking of retail, one would be remiss if we did not note the departure of RadioShack from the marketplace. Also, Lowe’s was the top white-goods retailer for the second consecutive year in 2014, ahead of perennial leader Sears in the TWICE Top 50 Major Appliance Retailers Report. RadioShack’s demise and Sears’ second-place status were not surprises given the long-term challenges for both retailers.

It is also worth noting that continued its double-digit sales growth in 2014 (15.4 percent), according to the TWICE Top 100 CE Retailers Report (see p. 20), inching closer to No. 2 Walmart, which could be why the Arkansas-based behemoth is redoing its CE approach once again.

Also noteworthy is that Consumer Reports once again praised independent retailers — and three NATM members in particular, Abt Electronics, Nebraska Furniture Mart and P.C. Richard — in its long-running appliance retailer satisfaction survey.

When independents in this business do well, that usually means sales volume, and profitability, could be up in the second half. At least that’s what I’m predicting.

Steve Smith is editor at large of TWICE and its longtime editor in chief.