Consumer electronics (CE) is a big category for the Back-to-School (BTS) season which will be underway in a few short weeks. The International Council of Shopping Centers (ICSC) is forecasting a smaller rise in CE spending this year. And a new report indicates that bricks and mortar stores will not have the entire CE spending pie to themselves.
ICSC data reveals that the BTS season is critical for retailers and accounts for up to 16% of total annual sales. While spending in the category will increase by about 3% this year, the CE product group will see only a 2% rise. Not all forecasters are in agreement regarding these numbers. For example, Customer Growth Partners is looking for a 6.2% increase in BTS spending this year.
Hot CE products this year will include laptops, tablets and e-readers. To pump up traffic, major retailers like Staples and Apple are offering rebates and other promotional discounts. But traditional stores should keep in mind that the largest online retailer, Amazon, now plays a big role in the CE category.
Over the past 12 years, Amazon worked to woo manufacturers to allow it to sell their CE offerings online. In addition, the company joined the hardware fray by introducing the first e-reader, the Kindle. As a result, Amazon now enjoys about $8 billion in annual revenue from its CE lines.
In a recent interview with Twice magazine, Amazon’s CE VP Paul Ryder notes that the earthquake disaster in Japan has disrupted supply lines for some CE products. In addition, analysts note that there’s been some fall-off in demand for large CE items. However, Ryder says consumers remain interested in GPS, personal audio devices and the Kindle.
Ryder also notes that while the Internet may be a place for consumers to research products, pure-play operators must compete with bricks and mortar operators for business. Each type of business faces its own kind of cost structure.
Both kinds of businesses must advertise the best aspects of the products they sell as well as the service features they bring to the consumer. Competitive marketing strategies will be in evidence as CE operators gear up for the BTS and upcoming holiday seasons.[Sources: Wolf, Alan. Back To School CE Sales. Twice. 7 Jul. 2011. Web. 22 Jul. 2011; Wolf, Alan. Amazon’s Ryder Riding Herd. Twice. 5 Jul. 2011. Web. 22 Jul. 2011]