Following a rocky transition from legacy electronics to emerging technology, the CE industry is finally ready to take on the Grinches of Christmases past, top distributors tell TWICE.
Stockpiled with the latest in connected devices and 4K panels, these two-step purveyors portend a very merry season indeed, as consumers step up to do-it-yourself (DIY) home automation, drones take flight, and all manner of connected giftables, from smart watches to Amazon’s Echo smart speaker, are filling Santa’s sleigh.
Here’s what distributor executives had to say.
TWICE:What are your expectations for the fourth quarter? Which products or categories will be the big holiday hits?
Alexandra Harding, vendor management director, Consumer Technology Solutions (CTS), Ingram Micro: We’re expecting high single-digit growth. TVs will continue to drive foot traffic into stores as we will see large savings on even bigger screen sizes this year, such as sizes of 60-inches-plus.
There will also be significant savings on 4K TVs, allowing for a lower cost-to-entry that will appeal to a broader audience than just the early adopters.
Wearables will continue to be a hot ticket item, as will streaming devices as more and more consumers cut the cord.
A new one this year will be drones, as we see more players in the market than ever before. This will include the entry- level products for the novice up to the higher-end products for the more advanced users.
Also, as consumer adoption of DIY connected-home devices grows we should see sales growth with lighting, connected-home appliances and other DIY products.
Jeff Davis, sales senior VP, D&H Distributing: We’re expecting a strong fourth quarter at D&H, based on double-digit growth in quarter three that has been continuing throughout both the U.S. and Canada.
In the marketplace in general, we’re looking for strength in categories such as wearable devices; new Ultra HD units such as curved-screen models; mobile computing products including new Windows 10 notebooks; plus innovative smart-home products like the new Amazon “Echo” digital assistant.
Fred Towns, president, New Age Electronics: We are expecting a strong fourth quarter that’s driven by a whole environment of products, not just one or two holiday hits.
New iterations of wearable devices will be popular gift items, especially those that monitor activity, eating and sleep patterns. Connected home products that control security, lighting, music and thermostats will become more widely adopted as manufacturers continue to make more plug and play options available.
Voice-activated home automation devices such as the Amazon Echo will also be hot. UAVs [unmanned aerial vehicles] in the $79 to $99 price range, high-end audio, and PC and console gaming products and accessories, and Windows 10 personal computing devices, will all be in high demand.
Across all categories, any product that interfaces with a user’s smart device to enhance their everyday lifestyle is going to see success this holiday.
Dennis Holzer, executive director, Powerhouse Alliance: This has been a great year for growth in our industry, and I don’t see that growth slowing down in the fourth quarter.
There will be several categories once again driving holiday sales this year, most of which we are involved in, starting with 4K and OLED TV. When it comes to this category, consumers [say] the bigger the better, so I see Santa hauling a lot of 65-inch and larger TVs this year.
Also, anything related to home Wi-Fi and connectivity is going to continue to boom throughout the holiday season. Standard routers and access points aren’t cutting it anymore, and consumers are turning to premium products to make sure their home networks are running fast and smooth.
Consumers are also cutting as many cords as possible across their homes. Wireless audio, security, surveillance and home automation categories, just to name a few, are flooding the market because of their convenience, quality, and ease of use. I expect to see these categories continue to flourish in the next few months and beyond.
Finally, wearables are going strong and have become a very popular and mature product category over the past year or so. With the introduction of the Apple Watch and similar updated models from other major brands in the space, consumers now have a long list of names to choose from. People have become more interested in getting in shape and in tune with their health, and small devices like these wearable trackers are an ideal component, fit and gift.
Tate Morgan, president, Petra Industries: We are quite optimistic about the fourth quarter for several reasons. Our merchandising team has been hard at work to make sure we have the right products at the best possible pricing for our customers to present to holiday shoppers.
One of the categories that we’re expecting great results from is TV accessories like cables, mounts and soundbars. There will be a lot of promotion around flat-panel TVs, especially new 4K Ultra HD displays. Competition for the TVs will likely leave little margin for the retailer, so attaching accessories to every sale will be important. We’ve sourced good-better-best options for our customers in all of the important TV accessory categories.
We’re also expecting accessories for mobile devices to be big holiday hits. This has been a great category in the fourth quarter for the past few years and we don’t expect the pattern to change. Apple just set records for first-week sales of its most recent editions of the iPhone, so cases, cables, portable power, headphones and Bluetooth accessories will be sought-after gifts for owners of these and other smartphones.
Other categories for which we look forward to good fourth-quarter sales are drones, turntables, gaming accessories and premium-quality headphones. All of these products are on lists of popular holiday gifts that traditionally drive results during the fourth quarter.
Warren Chaiken, president/COO, Almo: We anticipate Q4 2015 to mirror Q4 2014 with regard to sales and promotional offers. In electronics, the focus will be on 4K and larger-screen TVs, for which pricing will be very aggressive. On the appliance front, cooking and laundry are always strong holiday sellers, along with French-door refrigeration and small appliances.
Curt Hayes, Capitol: Networking is the gateway to the big hits this holiday season. Connectivity is king — just look at how products like Fitbit continue to change the way consumers communicate and share information within like-minded groups.
It certainly matters more to the custom market, where whole-house entertainment and controls are now easier to sell-in to one-time skeptical end-users who now look for connected solutions to every electronics installation in the home.
The retail side of the business will see a bigger influx of DIY products for end-users who want a simpler pathway to tying A/V, security and other functions into easily managed packages.
At the most fundamental level, wireless routers and other networking products will be the backbone of connected products throughout the home.
Rick Slagle, business development, marketing, and purchasing VP, Wynit: We expect a strong holiday season in emerging technology categories such as wearables, drones, and rideable technology. As a category destination for emerging technologies, we have noticed that retailers look to us as their distributor partner to offer subject matter expertise in these categories.
Retailers are also looking to buy multiple products across different emerging technology categories. Buying from a one-stop shop can help retailers more efficiently source products.
TWICE:How can retailers maintain their Black Friday momentum and avoid the traditional mid-December lull?
Warren Chaiken, Almo: Black Friday has expanded well beyond a single day, so I think we need to look at the entire holiday promotional period.
Retailers that want to continually garner market share and sustain momentum should maintain strong inventory and service levels, and continuously promote their specific value-added services such as installation and integration.
Tate Morgan, Petra Industries: Retailers should have stock of popular gift items. Trying to chase inventory late in the season can kill momentum. They should also reserve some promotions for post-Black Friday in efforts at keeping their brand in front of a public that hasn’t exhausted their gifting budget.
Dennis Holzer, Powerhouse Alliance: Over the past several years Black Friday sales have been creeping up the calendar and retailers are now promoting Black Friday sales as early as the late weeks of September.
Retailers are pushing “their” Black Friday specials earlier to catch consumer attention, trying to re-program them to take advantage of deals early, while taking some of the heat off their sales expectations that had previously been set for Black Friday.
Retailers will have an easy time keeping that momentum going throughout the season, because they’ll keep pushing and promoting opportunities throughout the fourth quarter, keeping consumers coming back for more deals and late-season opportunities. And don’t forget the last- minute shoppers!
Fred Towns, New Age Electronics: With major retailers continuing to begin Black Friday promotions earlier and extend them over the course of several days, we expect the momentum to carry well into December this year.
The release of exciting new products that tie into the Windows 10 platform and new devices with more robust speeds and entertainment options for the connected home will also help drive consumers in stores and online to contribute to a solid December.
Alexandra Harding, Ingram Micro: Maximize the discount opportunities offered by the manufactures and have a good supply of stock.
There may be some shortages of TVs in Q4; use this opportunity to sell a complete solution and add to the basket accessories such as headphones, blue-tooth speakers, cases and charging devices.
For DIY-connected home devices, have displays and/or rich content for e-commerce sites.
Curt Hayes, Capitol: For starters, don’t start advertising holiday pricing until we get closer to the actual holidays. We all joke about how the holidays come earlier every year, but as an industry we set a low bar if we begin the conversation in October and early November.
Instead, promote the key products that will be a hit, playing up advantages and current pricing, then address holiday pricing when Black Friday is within reach.
It’s a fine time to build excitement for the latest and greatest our industry has to offer, rather than the lowest prices we’re willing to offer.
Jeff Davis, D&H Distributing: Black Friday has gradually begun to extend itself through most of November. This makes for plenty of deals for consumers, but somewhat dilutes the impact of the original Black Friday weekend, making it more like “50 Shades of Gray November” than Black Friday.
Although it’s encouraging to think that the momentum will continue into December, this may further disperse sales, making “Black Friday” less of a discernable sales spike and more of a gradual
progression toward the holiday season.