(Reuters) - Television retailers are going to have one simple message for shoppers this coming holiday season: Supersize it.
The lack of anything really new to tout means that mass merchants, online and specialty retailers will try to get people to trade in that once fancy 42-inch flat screen TV for one that is 60- or even 90-inches, and at lower prices that wouldn't have been fathomable a couple of years ago.
The only problem: If consumers play hard to get, then margins -- for manufacturers and to some extent, retailers --could get slammed.
The margin pressure "is being felt on all sides," said Ben Arnold, NPD Group's director of industry analysis, adding that manufacturers are being squeezed harder.
On average, a 50- to 52-inch LCD TV is expected to sell at $829 this year versus $1370 last year. But the price of a 50-inch LCD TV could fall to as low as $529 or even $499 on Black Friday, the kickoff to the biggest selling season of the year, said Tamaryn Pratt, principal of Quixel Research.
While retailers can try to combat the profit hit by selling more high-margin installation services or TV accessories, manufacturers have fixed production costs to meet no matter what they earn on the televisions they sold, Arnold added.
Top retailers Best Buy, Amazon.com, Wal-Mart and Target told Reuters they were planning to carry a bigger assortment of large screen TVs this year.
That is different from what they have done in the past few years when they played up features like 3-D technology and the ability to directly stream online content, to win shoppers.
"There is nothing out there that consumers are saying, you know what, I need to get rid of the TV I have and buy this new thing," said Frank DeMartin, Vice President, Retail & Distribution Sales, Mitsubishi Electric Visual Solutions America. "This is why the TV business is in a bit of a plateau."
Data from NPD DisplaySearch on Tuesday showed that global TV shipments fell for the second straight quarter, declining 8 percent in the second quarter of 2012 from the year-ago period.
INTERNET-ENABLED TVS DISAPPOINT
Global TV shipments are expected to fall 1.4 percent in 2012 after rising 0.1 percent last year, an earlier report from NPD DisplaySearch showed. (For a graphic, click http://link.reuters.com/bex52t)
"Many consumers have already upgraded to flat-panel TVs, and really the next thing for them to do is to go bigger," DeMartin said.
About 68 percent of households now own a flat panel TV, and of those owners, 45 percent own two or more, Arnold said, underscoring how mature the flat panel market has become.
"The rate of first time buyers buying more premium, feature laden TVs has slowed," Arnold said. "To a large extent, TV buyers are very focused on value (the biggest screen for the lowest price) with brand and features making less of a difference in the decision to buy."
While analysts see longer term potential for Internet-enabled TVs, the lack of an ecosystem has hurt widespread adoption so far, Pratt said, adding that her research has shown a "major disconnect" between current Internet-enabled TVs and consumers.
Despite thousands of available apps, digital content is only being streamed by 50 percent of these owners, on a daily or weekly basis, and more than 80 percent said that this content was being used just for playing movies, Pratt said.
Many TV owners don't want to pay more for the other apps and content, she said, adding that the trend would "dramatically change" if Apple introduces its anticipated iTV.
"What they are looking for is really the connectivity (of their TVs) to their mobile devices, whether that be a phone or a tablet ... They want to sync their devices together. To date, we don't have a TV that enables you to do that easily."
There is a "relative ambivalence" for the programming offered currently by cable and satellite providers, she said.
The fragmentation is in the platforms -- manufacturers partnering with some services but not with others, said Arnold.
"Many allow for video, game and other content downloads, but if you have TVs, PCs, and tablets of different brands, that download only lives on that one device and has less value," Arnold explained.
"Connected TV services are driven by content, but you can stream movies to every connected screen in your house now -- so what's the value proposition? So as just another content box, I think connected TV's appeal will be limited."
EYES ON THE PRICE
The lack of willingness on the consumer's part to pay more for features such as 3D, voice and touch screens and portability features on connected televisions has forced retailers to focus more on larger screen sizes and add new brands to their TV assortments, especially ones that sell larger screens for less.
"Fifty-five inches and larger is where our customers are looking," Wal-Mart spokeswoman Sarah Spencer said.
The world's largest retailer is adding Panasonic and Toshiba brands this holiday season, and plans to carry the Sharp brand nationwide versus 200 U.S. stores last year, Spencer said.
Rival Target will carry 60-inch and 70-inch screens this year. Previously, the largest screen size available at Target was 55 inches. It added Sharp and LG brands to its product assortment, and increased the amount of TVs from U.S. TV maker Vizio, known for its aggressively low prices.
BJ's Wholesale Club, which is also carrying a larger assortment of big screens this year, has added LG and dropped Sony, the warehouse club told Reuters.
Regional chain Meijer has tweeked its assortment to add more larger TVs.
"Larger displays at 46 inches and greater is where the growth lies in the marketplace for the balance of the year as average selling prices continue to decline," Don Sanderson, Meijer's merchandise manager for electronics/media/school & office, said.
Both Wal-Mart and Target said their assortment of 3D TVs will be similar to last year. Shoppers still have not warmed up to the idea of paying a premium for the technology as there is not enough 3D content to watch.
"Even if some great film or game comes along that is perfect for a home 3D set up, I'm not sure 3D's reputation can be saved at this point," Arnold said.
OFFERING MORE INCENTIVES
Retailers are also finding other ways to convince the shopper to buy larger televisions. For instance, Sears and Wal-Mart are offering more flexible layaway options.
"Last year, we gave our customers 60 days but they came back and said they needed more time especially for those big ticket items like the big screen TV," Wal-Mart's Spencer said.
Best Buy is offering free delivery on 46-inch and larger screen TVs. It will also pick up those TVs within 30 days if the customer is not completely satisfied with their purchase.
"To date, we have been seeing sales of screen sizes larger than 55-inches increase year over year and expect that to continue," said Amy College, vice president Home Business Group for Best Buy.
Amazon, which has seen a double digit year-over-year increase in sales of large screen TVs (55-inches or larger), is offering "free enhanced delivery" on most 48-inch or larger TVs. This means customers can schedule their own delivery day and one of Amazon's shippers will deliver the TV, unpack it, ensure that it is working properly to guarantee no damage occurred during transportation, and dispose of all packaging material.
(Reporting By Dhanya Skariachan)
Source: http://news.yahoo.com/retailers-tout-size-absence-substance-tv-aisles-040722209--sector.html
betty white ed reed football schedule jo paterno dead south carolina tuskegee airmen mike james
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.