ECRM Levin Consulting Electronics Retail Summit
I attended the ECRM Levin Consulting Electronics Retail Summit August 13-15, and learned some interesting facts about where technology product sales are headed for 2012-2013. There are some exciting opportunities for collegiate retailers ahead!
The event started off with a general session titled: “Exploiting Niche Opportunities in a Stagnant Market,” presented by Stephen Baker, Vice President, Industry Analysis at the NPD Group (www.npd.com). Mr. Baker talked about the electronics industry as a whole. His analysis showed that overall industry volumes will be flat to negative for the year. Not a good sign. However, it’s no surprise that Apple is driving the industry. While Q2 2012 Year-over-Year revenue results from Apple were almost flat, the previous four quarters showed 12%-36% growth over the previous year. All other electronic products were down 3%-9% during this same period. Apple seems to be keeping the industry afloat.
Mr. Baker recommends that retailers should follow the big opportunities—PC’s, tablets and smartphones. PC’s and tablets are a core product in your college store mix, and ICBA is working to add smartphones to our programs. These three categories account for about 38% of the total electronics sales in the industry.
As you most likely know, tablets outsold notebook computers over the past few months. Mr. Baker stated that notebook/netbook purchasers were slightly more likely than desktop purchasers to attach an accessory to their computer purchase. Sales of accessories for these products are on the rise, with cases and screen protectors accounting for about 70% of the total accessory revenues. Several companies at the ECRM/Levin meetings offered new bags and sleeves for laptops and tablets, as well as charging solutions for laptops and tablets. Many of the vendors I met with are also gearing up their inventory of cases, sleeves and charging accessories for the announcement and launch of the Apple iPad mini, expected later this fall. His research also showed that wireless mice were a hot commodity.
Smartphone accessories have seen a 25% increase for 2012. 7 in 10 cell phone purchasers attach an accessory for their phone at the time of purchase or within 6 months. The average cell phone purchase resulted in an additional $30 spent on accessories for the phone, though smartphones generate over three times more accessory spending.
Smartphone retailers (AT&T, Verizon stores) are losing out on the majority of aftermarket purchases, as four-in-five purchasers say they returned to a different retailer to make their aftermarket accessory purchase. That is great news for collegiate retailers. Cell phone cases, earbuds with in-line mics and charging solutions should be staples in your department. Cell phone cases are more of a fashion statement than functional, so buyers are apt to purchase more than one for their phone.
All of the vendors I met with are gearing up for the new Apple iPhone 5, scheduled to be announced in mid-September and ready for sale a few weeks later. Rumors are that the new phone will boast a bigger screen and could possibly be slightly thinner. There is also a rumor that Apple is dropping its 30-pin connector in favor of a different configuration. All of this means that there is plenty of opportunity to stock and sell new accessories for the iPhone 5—cases, battery cases, chargers, etc.
Finally, audio remains important but the growth segments are designed to make it more portable (and less device centric). While headphones and earbuds still remain strong, streaming audio speakers or Bluetooth speakers will also see continued growth in the market, experiencing a 280% growth in the past year.
Bluetooth speakers range in price from about $50 to $200 and now produce some awesome sound in a small package. It is important that you have a display unit out so that your customer can sync their device and listen to their own music. That is the best way to sell a system.
I am working with many of the companies I met at the ECRM/Levin Consulting Electronics Retail Summit to bring their products to our member stores, either direct or through key distributors who serve our channel. Look for the announcements about these new programs and take advantage of what these vendors have to offer. There are opportunities for growth in your store’s electronics/technology department with new product constantly hitting the market.
Blogged by Marty Duncan, ICBA Program Manager