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The Race Is On for Christmas Sales

Now that the kids are back at school powering up their new laptops and tablets, electronics companies are crossing their fingers and hoping for that bright shopping light to shine at the end of the year.

The Christmas countdown has begun, and all sorts of trend counters are trying to figure out how many new phones, tablets, computers, appliances, TVs, and pick-your-gadget-of-the-year will be unwrapped in a few months.

ShopperTrak, a research firm that analyzes retailer foot traffic, anticipates decent growth for the coming Christmas shopping season — except for electronics. On the upside, overall national retail sales in November and December should rise 3.3 percent from the same period last year. The downside: In the electronics and appliance sector, foot traffic should drop 8 percent, though sales should increase 1.5 percent.

Bill Martin, ShopperTrak's founder, said in a press release:

Some of the traffic decline in the electronics and appliance category can be attributed to consumers going online to research premium-priced purchases or to purchase items at discounted prices. You can't, however, ignore the fact that 92 percent of total GAFO [general merchandise, apparel and accessories, furniture, and other] retail sales still occur in brick-and-mortar stores. Retailers who align their in-store and online strategies to provide multiple touch points and distinct value offerings for consumers will come out on top.

OK, so that's a glimmer of hope. Christmas may not be a washout. Still, it has been a depressing economic year by and large for many high-tech firms, and other headlines give me a tempered view going into the last quarter of 2012.

{complink 4267|Royal Philips Electronics N.V.}, a European bellwether, is going through a multi-year restructuring to cut costs. Last week, it said it will have to cut another 2,200 jobs to save an extra €300 million ($389.5 million) as economic conditions deteriorate further. These cuts, in addition to the 4,500 announced previously, “bring the cost-cutting target to 1.1 billion euros by 2014,” according to Bloomberg Businessweek.

Also, exports from Singapore, a key Asian supply chain hub and the place where many high-tech companies run their logistics operations, dropped more than economists anticipated in August. The primary reasons cited were lower European demand and weakness in China.

Looking at these numbers, maybe it's not a surprise that this year's IFA, a tradeshow for consumer electronics and home appliances in Berlin, broke records. From the end of August to early September, 1,439 exhibitors presented product debuts to 240,000 attendees (up 1 percent from last year).

Maybe with the broader market uncertainty, hitting the showroom floor and scouring for deals among colleagues isn't such a bad idea.

20 comments on “The Race Is On for Christmas Sales

  1. elctrnx_lyf
    September 23, 2012

    Are there many more job cuts in the pipe line from many companies. The consumer electronics companies are definitely looking for a great christamas season.

  2. hash.era
    September 23, 2012

    Job cuts will be there even though the market has settled upto some extent. It will continue to be the same for a couple of years more since the companies have to make up for what they lost during the crisis.

  3. FLYINGSCOT
    September 23, 2012

    Speak to 6 different pundits and get 6 different views on the economy.  I reckon we are still bobbing along choppy seas with no safe port in sight (sorry, that's 7 pundits now).  I truly hope the Christmas numbers are good but I would not bank it yet.  

  4. hash.era
    September 23, 2012

    True Rich and I feel that it will be a long christmas this time.  There are so many people who has qualifications plus experiance waiting outside for a job. I feel the job market is sewcure right now but not stable since one little collapse will shake everything all over again.

    Other factor is that the job seekers will go for any salary right now just to make sure that they are not un-employeed. This will create a big issue in the market where people will be hired not on qualifications and knowledge but on salary expectation which is not good at all.

  5. Daniel
    September 24, 2012

    Rich, it seems like small scale umbrella manufacturing companies. They used to hire more peoples at summer seasons for increased production and assembling of umbrellas for the next rainy season. When they have enough number in their stock, they cut down about 75% of jobs because during rainy season they need only marketing guys. Every year the same cycle is happening. So the big brands are also following similar strategy and after X'mas shopping season they may also start recruiting process once again.

  6. Jennifer Baljko
    September 24, 2012

    elctrnx_lyf – In Europe, many companies have given cautious outlooks for the rest of 2012… what that translates to in terms of holiday sales and layoffs is uncertain.

  7. Jennifer Baljko
    September 24, 2012

    hash.era – agreed, it will still be a couple years before we see wider-scaler recovery, but the Christmas season always seems to hold some hope for industry watchers.

     

  8. Jennifer Baljko
    September 24, 2012

    Rich K – I guess we'll see what happens. I think consumers have cut back on spening disposable incomes ( ie, not taking extended vacations or staying closer to home, or shopping at cheaper food markets), but I think there could be some pent-up buying agnst that seems to give holidays a boot… maybe people have put off buying, say, new shoes so they buy a tablet later in the year.

  9. Wale Bakare
    September 24, 2012

    Difficult to address and all measures to simulate quick recovery in near practically ineffective. Watching TV news this week reporting 2 or 3 manufacturing/utilities firms announcing jobs cut not nice. How would those affected thousands of workers get on with xmas sales? Again, throwing into the stack of avalanche of jobless list, and/or waiting to enqueue for government's handouts for survival. Too bad!

  10. Wale Bakare
    September 24, 2012

    The question i would like to ask – which sector likely to spark the recovery?

  11. _hm
    September 24, 2012

    US Election will be over and sales may go up close to 5%.

     

  12. bolaji ojo
    September 25, 2012

    Rich, The signs are there for all to see. Corporations are tightening spending again, consumers are still concerned about job growth and with inflation still low and wages under tight control, it's unlikely sales will be strong in the December period. I am not even thinking of “gifts” right now at a personal level. And from recent announcement from logistics companies like UPS and FedEx, it's more realistic to expect and be grateful for a warm hug in December than an expensive gift.

  13. bolaji ojo
    September 25, 2012

    Rich, The signs are there for all to see. Corporations are tightening spending again, consumers are still concerned about job growth and with inflation still low and wages under tight control, it's unlikely sales will be strong in the December period. I am not even thinking of “gifts” right now at a personal level. And from recent announcement from logistics companies like UPS and FedEx, it's more realistic to expect and be grateful for a warm hug in December than an expensive gift.

  14. Barbara Jorgensen
    September 25, 2012

    Here's my analysis: “Foot” traffic will be limited to the crazies that line up in front of Wal-Mart on Thanksgiving night that are willing to crush fellow humans in the rush for an HDTV. Job growth will be limited to seasonal workers: the extra folks that UPS/FedEx/DHL hire; hapless security people for Black Friday crowd control; and retail clerks that will be idle up to Christmas Eve. Amazon.com will have a blow-out year; acquire NetFlix; and show Wal-Mart and Target the error of their ways when they stopped selling the Kindle.

    Someone needs an infusion of holiday cheer, no?

  15. Himanshugupta
    September 26, 2012

    i do not know/see how the growth will happen only after elections. As the article suggest the weakness in market is mainly due to EU and China. So, USA elections seems to have very limited impact. The market is recovering well but the EU is pulling down the seemigly good recovery.

  16. Mr. Roques
    September 26, 2012

    Is that company also tracking how early are people buying gifts? I would expect most people wait for Black Thursday and all other super sale days… and with electronics, sometimes the more you wait, the better (I wouldnt expect many people to buy tablets right now, they probably wait for the iPad Mini … if they are looking for that 200 – 250 price range).

     

  17. Jennifer Baljko
    September 27, 2012

    Barbara – I think you said it best… and — minus the Amazon acquisition prediction — sounds like patterns we seen in the last few years. Point being – the more things change, the more they stay the same.

  18. Jennifer Baljko
    September 27, 2012

    Roques – I agree. I don't know if this company tracks when people buy, but I imagine there are a decent number of shoppers who buy gifts in a more phased, economically sane approach, spreading their spending over five or six months and use sales and online coupons to their advantage.  But that's probably just a small number of people…

  19. Mr. Roques
    October 25, 2012

    Except for Amazon, those things happen every year, no? 

    I also believe Amazon is in for a big year. They are not doing bad, but I think they will continue to sell a ton of tablets. I don't think Google had the same impact with the Nexus 7, even if its a more complete tablet. 

    Those 2, with Apple, have the option to leave a small margin in the tablet market (making the actual $ with the apps). Samsung and others can't afford that.

  20. hash.era
    February 16, 2013

    True rich and it proved to be correct so far. I feel the time has come to look for a good quality but somewhat cheaper products to hit the market.

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