Consumer Retail Electronics Industry Analysis

Industry Analysis The US sell consumer electronics (CE) market place had reported taxations of $one hundred eighty billion in 2010. The different revenue streams that make up the reported yearbook revenue in 2010 for the CE market can be divided into quintet recognize atomic number 18as Consumer Electronics (CE), which consist of video and audio frequency products Home Office which consist of PCs, notebooks, netbooks, tablets, and mobile phones Appliances Entertainment Hardware and bundle and serve wellsprings (see Figure 1).Total sales from the top out 10 electronics retailers grew by 6% in 2011 to reach $110 billion. The past ii business cycles, urinate been marked by slow emergence, the fall of an CE empire, electric circuit City, and complete flat line fruit of cay product areas such as TVs. The market showed minor gains after(prenominal) the fall of travel City, but the growth can be attributable to the redistribution of Circuit Citys customer base. The require players in this market such as Best Buy, Target, Wal-Mart, RadioShack, ect, only grew by 4. 5% in 2011.This is primarily imputable to the release of tablets, and netbooks, and not from existing product lines, already in place. It is unquestionably unornamented that redistribution in consumer buying patterns the care the reposition to online shopping on retailers like Amazon. com has definitely impacted the nature of CE retailers. informed Technology Solutions conducted a market study on the Retail CE market, in which they live with identified 3 key areas which will continue to spur changes deep down the Retail CE market over the next few years.These 3 key areas as identified by apprised are Consumer sophistication and sparingity, cut-throat competition, and millennial consumer behavior. Consumer sophism and Frugality The shift from moving to a commodity centered market, with the coming of online CE retailers like Amazon, the affect is in the efforts of the sales staff, which has been exaltedly reduced, shoppers know exactly what they are expression for, for the most part, and use these retail brick and trench mortar shops as showrooms, where they go to pay heed and feel the merchandise, before they actually square off to obtain these detail.These customers then unremarkably fall back to the comforts of their home, or the nearest Starbucks, where they usually purchase the same exact full point online usually through an online retailer like Amazon. In addition to this sophistication consumers collapse also become very frugal due to depressed economic conditions, and the soaring unemployment rate that is constantly rising. Consumers are looking for the best deal possible and if it content waiting few days for the item to be shipped then that is what they will do.From a business standpoint this new nonsuch poses certain operational challenges, Profit Margins (PM), and Distribution. Prices of high ticket items such as monstrous f lat screens and high termsd PCs come consistently declined, the sales that gravel occurred for this submarket rescue strictly been for replacement or extension sales & serve. These items usually have the highest margins of all CE products.To curb this retailers have revised their revenue mix, by including more(prenominal) than than lower margin items such as notebook PCs and TVs, and higher margin products which are certain(a) fire sales such as smartphones, and tablets. Retailers that have focused on iodine channel distribution strategies such as the retail store model have had to invest in multichannel distribution strategies to compete with the shift in consumer buying behaviors. This manner of buying has laboured retailers to offer more options in addition to maintain their brick and mortar establishments.Cut Throat Competition Todays CE retailers have always been confronted with hard-fought issues, but the pressures to produce a net income are even greater than incessantly before. Modern CE retailers face earthshaking market competition from the likes of discounters such as Wal-Mart, and online retailers such as Amazon. An even more interesting dichotomy that has occurred in the CE market is the inability to determine supplier from competitor. This has occurred with apple products, which designs and sells the most demanded consumer electronics.Apple has strict controls as to who distributes their products, any retailer outside of this Apple sphere is at a perfect(a) disadvantage and missing out on an entire market of customers they could have had zesty in commerce. Generation Y and Consumer deportment The multitasking, always electronically connected throng of people we call Generation Y or better known as the millennias continue to drive the base that is occurring in the notebook/ tablet, and smartphone product lifecycles, which have consistently drove the need for companies like Apple, and the like to have product releases ever y(prenominal) 6 months.This has created submarkets for the sales of accessories for the new products as well as service plans from Telecommunications Service providers for data plans to access the internet, and other media such as streaming music, and video via services like YouTube, and Netflix. This push for the access of media has forced retailers to get into the content provider business.With the advent of the internet and mobile devices generation Yers have instant access to price differentials across different channels modify them to compare, and price shop while in the actual store standing in front of a product. This has decreased the need for sales staff, and these groups of consumers have relied on prices shopping, and complaisant media, looking at reviews products, as well as what their friends have purchased via Facebook, ect to give ear them in their CE purchases, this form of purchase has become known as tender purchasing.