The hot holiday products that dominated the just-ended holiday selling season are set to remain the big sellers for 2005, according to the panelists at the annual TWICE Retail Roundtable, moderated by senior editor Alan Wolf.
Not surprisingly, the retailers said flat-panel televisions, digital cameras and portable music players were the big sellers. Amazon's Frank Sadowski, VP/global CE vendor management, said CE products have been the hot sellers for the past several holiday seasons, but this appeared magnified this year because the general media finally grasped the trend.
“CE has been the 'it' product for some time,” he said, adding that Amazon is very bullish on CE for 2005.
CompUSA's chief operating officer Tony Weiss said the first few weeks of 2005 are an encouraging sign for how the remainder of the year will perform.
Jim Ristow, general manager for Home Entertainment Source, said the coming year will benefit from new LCD manufacturing capacity that will come online, which will head off the minor supply problems retailers had with LCD this past year.
In non-product areas, all the retailers said the installation business will become an even more important revenue source.
Judy Quye, Tweeter's senior retailing VP, said there is great opportunity going forward for installation and that the chain has been experiencing a 50 percent increase per quarter in installation sales.
Other 2005 bright spots will be satellite radio, said Doug Moore, Circuit City's merchandise VP/GM. “Satellite radio delivers on its promise,” he said.
Ross Rubin, an analyst with NPD, agreed, saying that consumers understand the value proposition involved because it is similar to cable and satellite TV.
Media Center PCs, which started to catch on in 2004, should continue, Weiss said.
“We are seeing a significant number of people buying [Media Center] product. Even if they are not using all its capabilities now, they are buying it to be ready for the future,” he said.
One area that did not perform up to speed for most of the panel was audio. Outside of the iPod, audio component sales were off, which several panelists said was an area that needs to be addressed. One cause given for audio's problems was the lack of a compelling reason to upgrade. Unlike the TV category, where consumers are willing to pay big bucks to buy an HD or flat-panel TV, they are not willing to lay out a commensurate amount for better audio. However, this trend is leading to healthy sales of inexpensive home-theater-in-a-box products.
More detailed coverage of the Retail Roundtable, featuring edited transcripts of the discussion, will appear in the Feb. 21 issue of TWICE.