Black Friday Gadget Sales Decline ‘Steeper Than Anticipated’

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U.S. retail sales of consumer electronics on Black Friday dropped 5.6 percent this year, a “steeper than anticipated decline” that could signal trouble for the rest of the holiday season, according to market research firm The NPD Group.

The drop followed last year’s loss of nearly 4 percent, the firm said. Black Friday tech shoppers this year went for PCs, Android tablets, and TVs, which together accounted for 58 percent of all sales dollars, up from 51 percent in 2009.

“This slow start is merely a continuation of the challenges seen in the consumer electronics business throughout 2012,” Stephen Baker, vice president of industry analysis at NPD, said in a statement. “In an unbalanced market, where just a few categories deliver significant dollars, and even fewer offer any growth, the ability to deliver positive results will remain difficult for companies exposed to the entire consumer electronics marketplace.”

Unit volume sales of flat panel TVs grew 4 percent overall, though revenue dropped 6 percent as a result of the average selling price (ASP) falling from $367 last year to $333 this year. Forty percent of all flat-panel volume came from 32-inch TVs, but with an all-time low ASP of just $194, these sales “dragged overall revenue down,” NPD said.

On a brighter note, flat panels 50 inches and above saw a unit volume increase of 65 percent. The “star of the segment,” however, was 60-inch and above flat-panel TVs, whose sales increased 10 times over 2010, accounting for 6 percent of all TV unit volume compared to less than 1 percent two years ago.

It was also good news for Android tablets, which saw a 177 percent increase in unit volume, and a 91 percent increase in revenue, even though ASP dropped to $151 from $219 last year.

Meanwhile, notebook units fell 10 percent, with sales of Apple notebooks flat and Windows notebooks down 10 percent. Windows 8 devices, with an ASP of $368, represented 89 percent of notebook sales.

Of the top five sales volume leaders, point-and-shoot cameras saw the largest declines, with unit volume dropping 36 percent and revenue falling 33 percent. MP3 Players also saw double-digit declines in both unit volume (down 24 percent) and revenue growth (down 23 percent).

“In addition to the declines seen in point-and-shoot cameras and MP3 players, GPS revenue dropped 40 percent as did camcorder revenue,” Baker said. “Even though this holiday’s outlook remains tentative at best, the prospects for next year, (when many of these declining categories will have a much smaller impact on the market,) looks much more promising.”

Outside of the top five volume leaders, other strong categories included detachable lens cameras, headphones, and streaming-capable speakers.

NPD Black Friday Sales

Did Cyber Monday Fare Better?
Meanwhile, retail e-commerce spending for the first 30 days of the November and December holiday season reached $20.4 billion, a 15 percent increase over last year, comScore reported. Moreover, Cyber Monday was the “heaviest online spending day on record.”

“Cyber Monday kicked off Cyber Week with a record spending total of $1.46 billion, but the ‘sugar high’ appears to be somewhat short-lived,” comScore chairman Gian Fulgoni, said in a statement. “While we still saw three billion dollar days this week, growth rates dampened following the peak demand of the Thanksgiving-to-Cyber Monday promotional period.”

Fulgoni added that the unseasonably warm temperatures throughout parts of the country may have led consumers to shop in-store rather than go online.

Meanwhile, free shipping is an important driver of online holiday spending, comScore found. More than half of online transactions during the holiday season so far have included free shipping. This perk also leads consumers to spend “significantly” more overall.

“Consumers may either be responding to the minimum spending thresholds needed in order to receive free shipping, or figure that as long as they know they’re receiving free shipping it might be worth adding another item or two to their shopping basket,” Fulgoni said.

Sales of digital content and subscriptions, including digital book, music, and video downloads, grew 25 percent versus last year, representing the top gaining product category for the season-to-date, comScore said. Toy sales have grown 21 percent, followed by consumer packaged goods at 18 percent, consumer electronics at 17 percent, and video game consoles and accessories at 16 percent.

By Angela Moscaritolo, PCMag


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