TWICE 2018 Top 100 CE Retailers Report: Call It A Comeback

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No doubt 2017 was a tumultuous year for America and the consumer tech industry.

Just as shoppers, retailers and manufacturers were beginning to feel their oats again after an extended post-recession recovery, a new administration swept in on the promise of upsetting the apple cart.

Suddenly merchants were grappling with the possibility of a 20 percent “border tax” on imported goods; the popular Energy Star program seemed destined for battery backup; and tax reform legislation was not yet in sight.

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But despite the Sturm und Drang of Washington politics, employment was up — way up — and enticing new technologies were luring shoppers back into stores, finally leaving retailers in good stead.

Indeed, following a decade of bankruptcies, consolidation and e-commerce competition, the nation’s leading dispensers of consumer tech were entering calmer seas once again. Those that survived the bloodletting were beginning to master the art of digital marketing and merchandising, and the advent of 4K Ultra HD TV and the smart-home revolution brought a new surge of revenue and stability.

Sure, headlines tracked the fall of big-name national chains, and recounted the surfeit of big-box rental space that was left in their wake. But CE retailers were largely back on track, and stronger for the experience.

See: TWICE 2018 Top 100 CE Retailers: The Top 10

The scenario plays out graphically in TWICE’s latest Top 100 CE Retailers Report, which shows that the industry’s largest dealers mounted something of a comeback in 2017, more than doubling their collective sales gains of the prior year to reap a 3.3 percent uptick.

In terms of actual sell-through, our 100 largest tech retailers kissed the $140 billion mark in CE hardware and software, representing an all-time high. And no doubt that figure would be significantly greater had we not excluded labor revenue (from home installations) and sales to non-consumer channels like builders, small- to medium-sized businesses, schools and government agencies. All are important adjuncts to their core businesses, but it’s that very core — the “CE” in TWICE — that we’re looking to discern.

Best Buy employees gather together before the start of Thanksgiving evening promotions.

Best Buy employees gather together before the start of Thanksgiving evening promotions.

Now aiding TWICE in its market research mission is Senex, a Louisville, Ky.-based research and analysis firm that was founded in 2016, and whose principals have been creating the TWICE rankings for the past 10 years.

As the narrative noted, a relative calm has returned to the CE retailscape, and most Top 100-ers maintained their rankings within a two- or three-place range on the charts.

Of course, the most industry-critical machinations occurred at the top, where the five largest retailers all held their ground.

See: 2018 Top 100: The Bigger They Are, The Harder The Rest Fall

Clinging fast to the No. 1 spot despite unrelenting pressure from Amazon is Best Buy, which delivered a resounding 6 percent sales increase last year, putting to rest any doubts that the company, under the aegis of debonair Frenchman Hubert Joly, is back and better than ever.

What’s more, for the first time in recent memory Best Buy’s gains outpaced those of its online rival and merchandising partner, with which it’s collaborating on a forthcoming line of Fire TVs.

But the greatest gains, at least on a national level, came via Tim Cook, he of the forever jam-packed stores, as Apple unleashed last year’s trilogy of smartphone finesse, the iPhone 8, 8 Plus and X. The chain and website’s 11 percent sales increase put $13.8 billion into the company’s coffers, which nearly equals the CE sell-through of the next three largest retailers, Costco, Target and GameStop, combined.

See: The Top 5: What Moved The Needle For Tech Retailers In 2017

But for every action there is an equal and opposite reaction, Newton taught us, and the same holds true in tech retail, where consumers have a finite pool of disposable dollars. Shedding market share by the double digits so others may grow was Sears and sister chain Kmart; the ailing office supply channel, led by Staples and Office Depot, whose consolidation was thwarted by the feds; and the failing Toys"R"Us, which was already on the path to imminent bankruptcy.

The declines, along with ongoing research refinements, also created opportunities for new Top 100 entrants including IQ Home Entertainment (No. 82); Sound Distributors (No. 85); Acoustic Sound Design (No. 88); and Music Direct (No. 90), which continue the circle of life in CE retail.

See all Top 100 multimedia coverage in the TWICE Research Center.