Consumer Retail Electronics Industry Analysis
Industry Analysis
The US retail consumer electronics (CE) market had reported revenues of $180 billion in 2010. The different revenue streams that make up the reported annual revenue in 2010 for the CE market can be divided into five key areas: Consumer Electronics (CE), which consist of video and audio products; Home Office which consist of PC’s, notebooks, netbooks, tablets, and mobile phones; Appliances; Entertainment Hardware and Software; and Services (see Figure 1).
Total sales from the Top 10 electronics retailers grew by 6% in 2011 to reach $110 billion. The past two business cycles, have been marked by slow growth, the fall of an CE empire, Circuit City, and complete flat line growth of key product areas such as TV’s. The market showed minor gains after the fall of Circuit City, but the growth can be attributable to the redistribution of Circuit City’s customer base.
The major players in this market such as Best Buy, Target, Wal-Mart, RadioShack, ect…, only grew by 4.5% in 2011. This is primarily due to the release of tablets, and netbooks, and not from existing product lines, already in place. It is definitely apparent that redistribution in consumer buying patterns like the shift to online shopping on retailers like Amazon.com has definitely impacted the nature of CE retailers.
Cognizant Technology Solutions conducted a market study on the Retail CE market, in which they have identified 3 key areas which will continue to spur changes within the Retail CE market over the next few years. These 3 key areas as identified by Cognizant are Consumer sophistication and frugality, cut-throat competition, and millennial consumer behavior.
Consumer Sophistication and Frugality
The shift from moving to a commodity centered market, with the advent of online CE retailers like Amazon, the affect is in the efforts of the sales staff, which has been highly reduced, shoppers know exactly what they are looking for, for the most part, and use these retail brick
The US retail consumer electronics (CE) market had reported revenues of $180 billion in 2010. The different revenue streams that make up the reported annual revenue in 2010 for the CE market can be divided into five key areas: Consumer Electronics (CE), which consist of video and audio products; Home Office which consist of PC’s, notebooks, netbooks, tablets, and mobile phones; Appliances; Entertainment Hardware and Software; and Services (see Figure 1).
Total sales from the Top 10 electronics retailers grew by 6% in 2011 to reach $110 billion. The past two business cycles, have been marked by slow growth, the fall of an CE empire, Circuit City, and complete flat line growth of key product areas such as TV’s. The market showed minor gains after the fall of Circuit City, but the growth can be attributable to the redistribution of Circuit City’s customer base.
The major players in this market such as Best Buy, Target, Wal-Mart, RadioShack, ect…, only grew by 4.5% in 2011. This is primarily due to the release of tablets, and netbooks, and not from existing product lines, already in place. It is definitely apparent that redistribution in consumer buying patterns like the shift to online shopping on retailers like Amazon.com has definitely impacted the nature of CE retailers.
Cognizant Technology Solutions conducted a market study on the Retail CE market, in which they have identified 3 key areas which will continue to spur changes within the Retail CE market over the next few years. These 3 key areas as identified by Cognizant are Consumer sophistication and frugality, cut-throat competition, and millennial consumer behavior.
Consumer Sophistication and Frugality
The shift from moving to a commodity centered market, with the advent of online CE retailers like Amazon, the affect is in the efforts of the sales staff, which has been highly reduced, shoppers know exactly what they are looking for, for the most part, and use these retail brick