Panelists Pleased With Early 3D Demand, Suggest Ways To Spur Sales

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TWICE:

What’s your early read on 3D TV? Are consumers trying and buying? Will it become a full-fledged category or simply a snazzy feature on step-up models?

Karen Austin, Sears Holdings:

We have been very pleased with our early read on 3D TVs. 3D TVs offer customers the best overall picture quality on the market and the added value feature of 3D and IPTV.

Jeannette Howe, Specialty Electronics Nationwide:

I am genuinely excited about 3D, but that said, there are a number of issues that alarm me.

I am dismayed that the video manufacturing community elected to launch this new technology through all channels simultaneously — Internet, mass merchants and specialty dealers. 3D requires more education for the consumer than any other technology launch in my memory, and there is no standardization. We only have one opportunity to delight the consumer and expose them to the “new” 3D. If consumers buy 3D products through the Internet or on an unassisted sales floor, they are destined to have a bad experience. Consumers navigating the HDMI handshake, 3D glasses compatibility, the ability of last year’s AVR to pass a 3D signal, 3D Blu-ray players, and installation to their source material will require a knowledgeable and consultative sales force.

It also seems we are creating our own objections to the technology. For example, people groan, “You have to wear glasses.” Most people wear glasses daily — I can’t go a day without my sunglasses and I spent a lot of money on them. Some will see the opportunity — I hope Noel Lee brings Lady Gaga 3D glasses to market.

Here’s another objection: “You can’t watch 3D while lying down.” When was the last time you watched the Super Bowl or the World Series lying down? 3D is event-driven — if you want to sleep through the programming, you shouldn’t watch it in 3D.

As an industry we need to be promoting the sizzle of 3D. We are encouraging our SEN and Nationwide dealers to participate in CEA’s National 3D Demo Days Sept. 10-12.

3D video is also a great opportunity to reintroduce the consumer to 3D audio. Here we are presenting an immersive video experience, and that experience demands an equally immersive audio experience as well. We advocate that dealers set up their 3D video systems with really compelling audio systems.

3D technology is here to stay. We all know the content providers are driving it and we will be selling 3D display devices well into the future. The key to selling this technology is qualifying the customer.

The 44-year-old and younger demographic does not know life without a video game. I recently read that Generation Y is expected to surpass Baby Boomers in retail spending by 2015. Gen-Y consists of 113 million consumers who will spend an estimated $629 billion this year. They no longer live at home and they are fending for themselves financially. This is the demographic most likely to embrace 3D.

For what it is worth, the specialty channel has made a living by selling to Boomers. In order to survive, the independent dealer has to be marketing and selling to Generation Y as well. When it comes to the Boomer Generation, 3D should probably be presented as a “future proof ” feature on an excellent, highquality display device.

David Pidgeon, Starpower:

We are enjoying the increase in store traffic and interest in 3D. However, I don’t think we are at a point where we can start singing victory songs for this product category. It’s interesting, intriguing and consumers like it, but we are really looking forward to larger sets and theater applications, as we find that to be the most accepting of markets for this technology. Time will tell.


Jim Ristow, Home Entertainment Source:

Our 3D attachment rate continues to outpace the industry.

Many of our members are not just showing 3D but the differences in 3D technology. Some of their clients/customers are buying purely for the 3D feature, while others want a better display and want to ensure that they are “future-proof ” for 3D.

Regardless, we see this as an excellent opportunity to get customers/clients into our members’ stores.

Ross Rubin, The NPD Group:

It’s a slow start, but that’s what was expected. The silver lining is that it is driving store traffic for now.

The industry recognizes many of the things that need to happen to drive adoption: reducing the price delta with 2D-only models, increasing the available content, and addressing the cost and compatibility of the glasses.

Consumers are excited about the potential when they get a proper demo, but I’ve already seen cases where retailers are leaving glasses out that aren’t turned on. And if the glasses are turned off , so are the consumers.

Dan Schwab, D&H Distributing:

Sales of 3D TVs will mature further as more content becomes available for the average homeowner.

We really look at 3D TV in the same context as we do IPTV. In some respects, allowing the “connected generation” to view YouTube, download virtually unlimited movies and TV shows, and check out their Facebook pages on their TVs will help drive the upgrade/refresh cycle. We’re predicting 3D and IPTV could trigger a watershed of consumers upgrading their TVs, similar to what happened when flat panels first appeared. In that scenario, the new 3D units themselves can be the catalyst to sell add-ons like 7.1 surround-sound audio, 3D Blu-ray players, devices that allow users to see content from their PCs on the TV, and so on. We’re excited to be able to focus with our vendors and customers on innovation and differentiation.

Fred Towns, New Age Electronics:

3D TV is a desired feature that consumers are buying now. This is a positive addition to our home-theater lineup. The early adopters have already taken to 3D TV, with those who want to shop for new technologies right behind them. For retailers, it comes down to having the most innovative products with the required components available at the right time for the right price. Those retailers that can provide that level of service to their customers will win the business.


Michael Vitelli, Best Buy:

3D TVs do much more than just provide a great new experience for customers — they provide the best-quality 2D high-definition picture as well.

We don’t see 3D as a fad. As we see customers experience 3D TV in our stores, we see them walk away with feelings of surprise and delight. I think we are changing their historical perceptions of what 3D is.

That said, we’re still very early in the cycle. Events like the World Cup broadcast in 3D and the recent launch of ESPN3D are helping to drive consumer interest around the world. And gaming in 3D is amazing. As more content becomes available, there will be even more interest in the category.

Best Buy now carries most of the major brands of 3D televisions. From the beginning of the year to now, we have seen an increase in the number of manufacturers and models with 3D.

Dave Workman, PRO Group:

3D is not producing the incremental gains we would have hoped for at this point. The financing situation may be holding back some purchases but there is another possible scenario that I would like to propose: The industry is packaging quite a bit of product into the bundle promotions. Would we sell more of the expensive sets if they increased the instant rebate, and let the customers purchase the extra stuff to create the 3D experience when they were ready, or when more software became available?

We are tying up promotional dollars in product giveaways to make 3D work. Instead of a $300 IR [instant rebate] with a bundle, would the customer react in greater quantities to a $600 IR without the product giveaway?

First and foremost people are buying the TV for what it does in 2D. 3D is a nice future-proof technology but I believe many customers are waiting for this technology on its own to come down in price.

This gets back to what we need to do to sell LED and picture quality, ultraslim profi les, IPTV, and the other features that are relevant right now.

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