Image result for Christmas Was Merry As Consumers Traded Up

Members of the tech industry’s leading dealers (and one top analyst) gathered earlier this year for TWICE’s annual Retail Executive Roundtable at CES 2018. The following is one excerpt from the larger conversation, which we’re serializing online.

TWICE: So what’s the verdict Steve, was it a merry Christmas for consumer electronics?

Stephen Baker, The NPD Group: The big takeaway was the overall improving performance in the consumer electronics space. It’s getting better every single year and getting better every single holiday.

TWICE: What were the drivers last season?

Baker: There were lots of things in growth for the holiday that were really interesting. The top four categories were all smart-home related, even outside of Echo. Google Home was up 60 percent, and there was a huge increase in smart entry.

For me the most surprising one is security monitoring, cameras and other accessories. You would think it’s something that would start to slow down, but they’re still growing 35 to 40 percent. Ring was kind of the driver for smart entry, but most people only have one entry that they will make smart, which will be interesting going forward.

See: Which Retailers Won Christmas?

Also, PC monitors were up 21 percent during the holiday, and they have been growing over the past 18 to 24 months.

TWICE: Is that all from gamers?

Baker: It is from gaming, as well as bigger, better quality products and curved screens; while it isn’t good for TV it’s great for gaming and if you’re working on a computer.

TWICE: What else?

Baker: Mesh Wi-Fi whole-home is exploding. Overall, routers were up about 15 percent, while mesh was up hundreds because there wasn’t a lot of it last holiday. It’s relevant across many other pieces if you think about the explosion in 4K content, smart home and what mesh gives you: quality service; extension, so that you can watch content on a computer wherever you are in the house; and when you put a mesh router in, broadband goes up five times.

Mesh routers, like Netgear's Orbi, are rocketing in sales. 

Mesh routers, like Netgear’s Orbi, are rocketing in sales.

It supports many different activities that are happening all around the house, and there is broad-based acceptance — if you go into Walmart, they have a 4-foot section of mesh, and they sell for two to three times what traditional routers have sold for. It’s an awesome dollar value opportunity.

TWICE: What about TV?

Baker: TVs were down 3 percent in units but up 12 percent in dollars. The ASP [average selling price] was up $40 from $360 to $400.

There are two things happening in TV: size and price. The $1,500 and above market was up about 35 percent, whereas markets below that were down in terms of units and dollars.

TWICE: Is that the influence of OLED?

Baker: It’s OLED, but it’s not just OLED. It’s not about a specific technology. Consumers are willing to spend more money on better technology that provides a better experience. We see that across the board in PCs, gaming, routers, monitors and televisions. If I’m only going to have one television, I’m willing to spend more money on that one television.

Going forward, people are going to only have one television. A thousand-dollar iPhone? Who cares? They should be $1,300. People are going to pay that much for it if it’s a great product and it does what consumers want.

Headphones is another great category where people are willing to spend more money on the right product with the right technology. There’s a big demand and an opportunity to trade people up.

One of the reasons that we’re optimistic about 2018 is because those trends will help smaller categories like routers, monitors and smart home do well, while keeping big categories like TVs and PCs whole and prevent them from becoming decliners. So the holiday was good, and it’s made us more optimistic about the market going forward.

See: 10 Headphones That Want To Give Beats A Run For Its Money

TWICE: Trevor, a lot of the categories Steve just rattled off are your bread and butter. Was that your experience as well for the holidays?

Trevor May, D&H Distributing: I’ll go wherever it is necessary to meet the numbers required. That’s the politically correct answer, but we did have broad-based growth and all of those categories were included. We had a great holiday quarter with tremendous effort by the co-owners at D&H. We were able to deliver on a 15.6 percent sales increase year-over-year on holiday.

The categories that Steve went through echo true with us as well: TV, voice control, PC gaming, console gaming, mesh, and also VR. The effort of the whole team delivered.

TWICE: Amazon reported a record holiday period. What do you mark that up to?

Matt Furlong, Amazon: We did have a great holiday season as you mentioned. We saw record-setting numbers. Cyber Monday was the single-biggest day worldwide in the history of Amazon, and we saw record sales during the “Turkey 5” period, Thanksgiving to Cyber Monday, as well.

Amazon Dot

Amazon Dot was a best-seller for the e-tailer this holiday season.

We’re also excited for small businesses and entrepreneurs who saw almost 140 million items ordered on Amazon through that period. We’re pretty excited about the holiday overall.

As far as the top-selling items, we sold tens of millions of Alexa-enabled products, led by the Echo Dot. When you get beyond Echo, some of the smart-home products that we had success with include the TP-Link Smart Plug. That was one of our top sellers. Philips Hue [smart lighting] did really well this holiday, and there were other products that rounded it out with strength in home security — Ring, and some of those products. We saw strength in those as well. [Editor’s Note: Amazon acquired Ring last month for about $1 billion.]

TWICE: Did you see any shifts in the way people purchased?

Furlong: We continue to see growth in mobile shopping and, on Cyber Monday alone, Amazon App orders were up more than 50 percent worldwide year-over-year. In aggregate, mobile purchases on the app were up 70 percent. We definitely see more and more customers moving to that, not only to research and browse products, but also to make the final purchase.

[“Source-twice”]

By Loknath

Simple Guys with Simple dream to live Simple