TWICE:At midyear, some say CE retail sales are slowly picking up. How has business been for your retail customers in the first half?
Warren Chaiken, Almo: I think the spread of the recession was greatly exaggerated by the media as there continues to be strong demand for the consumer electronics products that we offer in the majority of markets across the country. While we have seen a slowdown in growth from previous years, we certainly have not experienced a negative demand situation.
J. Mark Howell, Brightpoint: There has been some increase in retail activity. I think there is less uncertainty and more acceptance of the current economic state, and with that some increase in consumer confidence. Specifically related to mobile phones, the replacement cycle has been stretched, and now, the deferred end point of that replacement stretch is beginning to be realized. Therefore [there is] incremental demand for wireless devices.
Mark Gustavson, WYNIT: We believe that we are starting to see an uptick in consumer confidence, which leads to more buying at retail, hence more orders for us. Consumers got an education in the realities of retail CE margins as expectations of deep discounts went a bit unfulfilled after the horrific holidays. That being said, there seems to have been an adjustment in these expectations, and the result is more purchases.
Ron Eby, D&H Distributing: E-tail has been holding up well, but things have continued to struggle in retail. The summer season has traditionally been a harder time for consumer electronics sales. Products are transitioning, plus people don’t necessarily buy CE when they’re thinking about splurging on a vacation. So this timeframe is traditionally slower, but due to the economy, it’s slower still. Retailers might want to stress the “vacation at home” pitch, including home entertainment or gaming solutions.
Stephen Bodnarchuk, M. Rothman & Company: Our business has remained relatively flat vs. last year. Even with the dismal economic news, it appears there is still a desire for consumer discretionary income to be spent on CE sales.
Jeff Kussard, Capitol Sales: Over our last two quarters the secondary and tertiary retail channels have been the real highlights. [Those markets] are generating the most heat, and they are where the dealers express the most optimism.
Morey Gottesman, Cardinal Electronics: The first half was disappointing for most of our retailers as well as custom installers. The economic climate was challenging, and as a result, floor traffic was down considerably. The one positive was that consumers who did walk in the stores were largely buyers.
David Kaplan, Digital Delivery Group: Our typical customer is the independent custom integrator. They tell us there are fewer new jobs and they have to fight harder to get them. Many are finding success by mining their previous client base and offering upgrades, updates and new technology. At DDG, for the most part, our members reported a soft start but solid sales over the last 60 to 90 days, indicating that sales in the channel are starting to make a comeback.
R.J. Hirshkind, ADI: The past several months have been a bit tough for our residential dealers with the uncertainty of the economic climate. In a positive direction, there seems to be more clarity on the direction of the economy, and I think the CE market will be in a better place going forward.
Samuel Golowinksi, marketing director, Z. Reiss & Associates: Consumers are more tech-savvy now than ever before … even in a recession. They think before they buy. Just like a vacation, CE products are entertainment. While they are watching a 52-inch flat-screen TV, they are not thinking about how much it cost them — it is an investment in their home. The recession has made everyone more conscious of the dollar, but consumers still want quality products and service. But you have to have the right SKUs in stock to get that sale.