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Consumers won't break accessory addiction for the New Year. |
"Out of clutter, find simplicity. From discord, find harmony. In the middle of difficulty, lies opportunity." To say that 2007 was a challenging year in consumer electronics is a bit of an understatement, but with every tough experience come hard-earned lessons for all involved. When Albert Einstein wrote those words about simplicity and harmony, he may not have been able to imagine a U.S. economy beset by surging oil prices, a weakening dollar, a housing slump, financial woes and of course a war fought thousands of miles from home. But despite these economic and political troubles, the consumer, the vendor community and retailers can all look ahead to 2008 with some optimism. The market's addiction to great CE products shows no end in sight, the industry continues to grow in dollar terms despite declining pricing, and new innovations make our CE devices better, faster and cooler.
"Out of clutter, find simplicity"
Consumers heeded this advice in 2007, speaking with their pocketbooks to tell vendors and retailers that their CE products must offer solutions, not just features. Products which spoke to ease-of-use, like the iPod, continued to sell so well that they created great new growth opportunities for both host-device and accessory vendors. When products allow consumers to simplify their lives or be more productive, like in-car navigation or time/place shifting technologies like the Slingbox, consumers ignore economic dark clouds and come shopping.
The challenge for accessory vendors is to innovate along with these new technologies, making sure that accessories become part of the solution rather than just a part of the clutter.
"From discord, find harmony"
The retail community has also been challenged by the changing landscape of the CE business. In 2008, it will find itself charged with the large task of educating consumers about the analog shutoff coming in February 2009. While retailers have already started the process of phasing out analog televisions completely, they still must deal with the fact that up to 15 percent of U.S. households still rely on overthe-air broadcast. And as a main source of information for most CE consumers, retailers will need to turn possible discord and confusion into clarity and harmony: A consumer who clearly understands his options is more likely to purchase that new digital television or converter box.
Of course, retailers are not alone in this educational process; vendors, the media, broadcasters and trade associations will all take part in shaping the message, with CEA taking a strong lead in forging that desired harmony. So if the transition goes well, there will be opportunity for the entire industry to benefit as the rising tide of digital television will float all boats, and accessory products such as cable, furniture, mounts and screen cleaners will boost product satisfaction and contribute greatly to the retailer's bottom line.
"In the middle of difficulty, lies opportunity"
Manufacturers may face the most difficulty in the new year as ever-faster product life cycles, declining prices and retail consolidation make for a tough selling environment.
The good news is that 2007 will show continued strong growth in the CE marketplace, and forecasts for 2008 exceed $170 billion, according to the CEAs 2011 Industry Forecast.
For manufacturers, though, a flattening world is bringing on more competition: With over 100 brands of flat panel television sold in the U.S., how does a manufacturer defend its market position and mindshare, let alone try to grow?
Surely it will be those who stress innovation, strong product design and efficient supply chain management. Besides, the CE industry is known for innovation, great products and affordable prices. Manufacturers who can create or maintain that formula will surely find opportunity in a $170 billion industry.
So, Mr. Einstein, your "glass is half full" approach has merit. As our industry turns the page on another selling season and looks ahead to the future, opportunities to create and market great products at affordable prices continue to exist, and our industry continues to make our lives more productive and more fun. With OLED televisions, GPS-enabled devices, more wireless devices and more time/place shifting technologies on the horizon, the CE future looks brighter than ever.
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