||The Demographic to Target for Holiday CE Sales
Choosing the right marketing strategy can get complicated for even the most savvy consumer electronics retailer. The target customer during the upcoming holiday season, though, is clear: Any household earning more than $75,000 a year.
Those consumers have fared better during the recession than those who earn less and are ready to spend more on CE products during the holiday season, CEA analysts said during the unveiling of the 2010 Holiday Sales and Forecast at the organization's yearly summit in San Francisco.
"You have a much higher rate of planned purchasing (by those earning $75,000 and up)," said Steve Koening, CEA's director of industry analysis. "This is the group to watch; they'll drive the needle up or down."
Households that earn below $75,000 a year cut back on spending during the recession and don't plan to ramp it up any time soon. It usually takes six to seven years before consumers re-adjust their spending habits. The under-$75,000 demographic is about three years into that process, Koenig said.
The report also focused on several retail trends during the holiday shopping season. Here are some highlights:
(Source: TWICE, 10/20/10)
- About 66% of consumers plan to buy gifts from mass merchants, 60% at electronic specialty retailers, 40% at warehouse clubs and 46% online.
- In the $75,000+ demographic, 67% shop mass merchants, 64% shop specialty electronics stores, 53% shop warehouse clubs and 65% shop online.
- The $75,000+ demographic plans to buy the following products during the holiday shopping season, in order: MP3 players, laptops, tablets, eReaders, video game consoles, smart phones and external storage.
- The top accessories they plan to buy are memory card, video game products, headphones/earbuds, carrying case and PC products.
- Trends in holiday retail strategies include mass merchants setting up temporary storefronts and focusing on new technologies; specialty dealers increasing consumer financing options and offering more installation services; warehouse clubs also offering more installation services and greater brand assortments; and etailers providing more site-to-store shipments and free delivery. All types of CE retailers will also increase their bundled offerings. "I would expect to see a lot more user bundles because they've been shown to be really effective," Koenig said.
- Etailers and online sites are starting to compete more against each other, as opposed to competing solely against brick-and-mortar retailers.
- Black Friday sales will start earlier every year.
- 47% of CEA insiders expect holiday product deals to be better than last year, with 37% saying they'll be about the same and 12% saying not as good.
- Only 26% of consumers, though, say the deals will be better than last year. About 17 percent say they'll not be as good and 53% say they'll be about the same. This means that dealers have to do a better job at advertising and marketing their special promotions.
- New products/technologies represent about 50% of product sold during holiday season. "New products drive sales. Consumers like to give new products as gifts," said Shawn DuBravac, CEA's chief economist and director of research said, adding that tablets, gaming accessories, smart phones, eReaders and connected Internet devices fit squarely into those categories. "There are lots of new products in the marketplace, and that should bode well for holiday sales."
- As products mature, they fall off the most-wished-for gift lists.
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