CTA: Emerging Tech, Smartphones Driving Household Consumer Electronics

About 87% of U.S. households own a smartphone, which is second only to the television at 96% ownership, according to new data from the Consumer Technology Association (CTA).

The trade group said that for the first time, the top three most-frequently owned tech products in the home are screen devices, with laptops trailing TVs and smartphones at 72%.

“The rapid ascent of smartphone ownership in U.S. households exemplifies [its] versatility — for communication, entertainment, productivity and more,” Steve Koenig, VP of market research, said in a statement.  “And because of that, it’s possible we’ll see smartphone ownership in the U.S. match that of TVs within the next five years.”

Echo and Google Home, have nearly tripled in ownership rate to reach 22% of American households — one of the fastest-adopted technologies since tablets, according to CTA.

Smartwatch adoption continues to grow, with 18% of U.S. households now owning at least one of the devices — an increase of six percentage points over last year. Additionally, ownership rates of drones and virtual reality headsets were measured at 11% and 10% of households, respectively.

Next-gen screen technologies and the availability of larger screen sizes drove more U.S. consumers to buy technology in and around the TV, said the CTA. The trade group said 4K Ultra HD televisions experienced the largest growth in household ownership rate, rising 15 percentage points year-over-year to reach 31% household ownership. Indeed, 19% of households own a TV with a screen size of 60 inches or bigger. Ownership of digital media streaming devices rose nine percentage points since 2017 to 45% of households.

“It’s no surprise that … smart speakers and VR are among the products consumers anticipate buying the most” said Ben Arnold, senior director of innovation and trends. “Many of these devices incorporate new technologies and features – artificial intelligence, voice recognition, faster processing – and at the same time provide a smarter way to communicate or experience content.”

Best Buy Dropping Sales Tag in Rebranding Campaign

Best Buy is launching a new branding campaign (dubbed “Best Buy 2020”) that includes the first corporate logo update in nearly 30 years.

The best Buy letters are now separate from the yellow sales tag, underscoring the consumer electronics retailer’s embrace of multilevel access via physical and e-commerce storefronts.

“The tag serves as graphic punctuation and a visual connection to our history,” said Whit Alexander, who was promoted to chief marketing officer last year.

The campaign, which began May 9, is designed to drive home the fact to consumers that Best Buy is enriching people’s lives through technology, according to Alexander.

“Telling the story of our people — and how we make a meaningful impact on customers’ lives — is at the heart of this work,” he said.

The updated logo already appears on BestBuy.com and in digital ads and TV commercials bowing May 13.

The 30-second TV spot features a Blue Shirt helping a customer by explaining what’s possible with technology. The ads – directed by Oscar-winning documentary director Errol Morris – focuse on conversations between Blue Shirts and customers with CE products the payoff at the end.

Best Buy, which has been headed by CEO Hubert Joly since 2012, is attempting to remain relevant in the e-commerce (read: Amazon) era.

The retail rivals last month announced a deal to bring the next generation of the Amazon Fire TV streaming media player/app to smart TVs in the United States and Canada. Best Buy will launch a series of 4K UHD and HD Fire TV Edition models featuring Alexa voice-recognition software from house brand Insignia and Toshiba, beginning this summer.

“We have a great story to tell,” Alexander said. “The core of what differentiates Best Buy vs. everyone else — and makes us awesome for customers — is that we understand your unique needs and how tech can enhance your life.”

Report: 4K UHD Demand to Boost TV Growth in 2018

Consumer demand for TV sets is poised to return to growth in 2018, boosted by 4K Ultra HD models, according to the latest “Worldwide TV Market Report” from Futuresource Consulting.

The recovery of several markets linked with a transition to 4K UHD models will push the market up by 5% to $85 billion, according to Futuresource.

“We believe 4K UHD TV sets will ship over 100 million units this year, equivalent to two-thirds of the entire large screen market,” said David Tett, market analyst at Futuresource Consulting, in a statement. “Consumers increasingly want larger screens, and this is playing nicely into the 4K UHD proposition.”

The world’s two largest markets, China and the United States, both saw falls in 2017 but have a positive outlook in 2018, Futuresource projects.

“They have been ahead of most other markets in terms of adoption of 4K UHD and large screens generally. Over three quarters of sets that sell in the U.S. and China this year will be over 40 [inches],” said Tett in a statement. “However, other regions are now catching up, and Western Europe is on course to match the 44% Chinese household ownership of 4K UHD TVs by 2022.”

With a substantial installed base of 4K UHD TV households to target, content is now becoming available across markets, according to Futuresource.

“Consumer research shows that there has been a significant step-up in the proportion of 4K UHD TV owners who say they have watched this content at home,” Tett said in a statement. “This is the result not just of an expanding number of SVOD subscribers, but also a growing choice of content via linear TV.”

Big premium TV vendors are increasing using voice assistant platforms to attract consumers, according to Futuresource. Google Assistant and Amazon’s Alexa are being incorporated into the latest TVs from LG, Hisense, TCL and Vizio. Samsung, meanwhile, is utilising its in-house Bixby assistant in its 2018 QLED range.

Also, in pursuit of better margins, most vendors have introduced either QLED or OLED display technology to larger screens, according to Futuresource.

“The two largest TV vendors are currently on opposing sides; Samsung is the driving force behind QLED and LG is OLED’s primary backer,” said Tett in a statement.

Futuresource expects a 41% CAGR between 2018 and 2022 of these technologies, resulting in around 8 million sets shipping in 2022.
Among other findings, Futuresource expects high dynamic range (HDR) to be present in 60% of 4K UHD sets this year. HDR 10 is the most commonly found solution currently across vendors but the availability of a range of technologies including HDR10, HDR10+, HLG, Advanced HDR and Dolby Vision is leading to some consumer confusion, according to Futuresource.

Best Buy Embedding Amazon Fire Streaming Player in Branded TVs

Retail rivals Amazon and Best Buy April 18 announced a deal to bring the next generation of the ecommerce giant’s Fire TV streaming media player/app to smart TVs in the United States and Canada. Best Buy will launch a series of 4K UHD and HD Fire TV Edition models featuring Alexa voice-recognition software from house brand Insignia and Toshiba, beginning this summer.

“Amazon and Best Buy have a long history of working together, and today we take our partnership to a new level,” Jeff Bezos, founder and CEO of Amazon, said in a statement. “We could not have a better partner in this endeavor.”

Indeed, Best Buy, the nation’s largest consumer electronics retailer, has partnered with CE brands – Apple, Microsoft, LG and Samsung – devoting floor space and company personnel to branded in-store departments.

“Our goal is to enrich the lives of our customers by offering them the very best products and services, whether they come to us online, visit our stores, or invite us into their home,” said CEO Hubert Joly, alluding to the chain’s in-home Geek Squad tech support.

The newly designed smart TVs with Fire TV meld live over-the-air TV with streaming video into one location. Consumers can use Alexa to search for and watch broadcast content, or choose from a catalog of streaming video from Netflix, Amazon Prime Video, HBO Now, PlayStation Vue, and Hulu, among others. Fire TV Edition can also be paired with any Echo wireless speaker device.

Parks: U.S. Broadband Homes Have More Than Seven Video Devices

In an over-the-top video world, Parks Associates announced new research claiming U.S. broadband households have on average more than seven video access devices, including TVs, computers, tablets, and smartphones.

The trend is consistent with previous reports suggesting almost 20% of younger consumers (aged 18-24) use live streaming video apps.

Last November, Parks reported that more than 50% of OTT video households subscribed to multiple SVOD services, with 81% using Netflix and at least one other service. That statistic is similar to broadband homes.

“Nearly 40% of U.S. broadband households subscribe to multiple OTT video services, and consumers expect to access their high-quality content on any platform, at any location where they live or go for work or fun,” said SVP Elizabeth Parks in a statement. “Demand for connected AV experiences is opening new business opportunities for integrators and companies that can provide expert managed services across multiple platforms and locations.”

 

Barnes & Noble Narrows Q3 Loss

In an age of ecommerce, Amazon and free shipping, Barnes & Noble is putting on a brave face despite fiscal appearances of a “dead retail chain walking.”

The chain reported a third-quarter (ended Jan. 27) loss of $63.5 million, which was an improvement from a loss of $70.2 million during the previous-year period. Revenue declined 5.3% to $1.2 billion from $1.3 billion.

Specifically, retail sales topped $1.2 billion, down from $1.27 last year. Nook segment revenue, which includes digital, consumer electronics, dropped almost 20% to $30.9 million from $38.4 million.

The declines underscored a same-store decrease of 5.8% primarily due to lower foot traffic. Alarming, considering the period included the winter holidays when even non-readers frequent bookstores – and merchandise includes DVD/Blu-ray Disc movies and TV shows.

“While we were disappointed with our holiday sales, comparable store sales trends did improve in January,” CEO Demos Parneros said in a statement.

Perneros is Barnes & Noble’s fourth CEO since 2013, upgrading from the COO position last April after former CEO Ronald Boire was fired.

The executive is saying all the right things, including strengthening the core business by “enhancing the customer value proposition,” improving profitability through an “aggressive expense management,” which he says will fund growth initiatives, simplify the retail experience and innovate for the future.

“We have initiated a strategic turnaround plan that is centered on growing the business and enhancing shareholder value,” Perneros said. “In the short term we are focused on stabilizing sales, improving productivity and reducing expenses.”

In February, the chain implemented a companywide expense reduction plan, including a new store labor model that provides greater flexibility by eliminating tasks and allowing employees to focus more on customers. It estimates these actions will result in annual cost savings of about $40 million.

But short of becoming Amazon, which launched as an online bookseller during the dotcom era, B&N is treading water.

Indeed, purchasing Oscar-nominee DVD, Darkest Hour, at B&N.com costs $25.17 — and $17.96 on Amazon.

Best Buy Ups Q4 Entertainment Revenue 17%

It’s not all gloom and doom at Best Buy.

The nation’s largest consumer electronics retailer March 1 reported a 16.8% increase in fourth-quarter (ended Feb. 3) same-store entertainment revenue, compared to a 18.6% decline in the previous-year period.

The entertainment segment, which includes myriad products such as DVD/Blu-ray Disc movies, video game hardware and software, books, music CDs and computer software, generated 10%, or $1.39 billion, of domestic revenue. The segment generated 9% ($1.1 billion) in the previous-year period.

From a merchandising perspective, Best Buy generated comparable sales growth across most of its categories, with the largest drivers being mobile phones, gaming, appliances, smart home, wearables and home theater.

“We are especially proud of our 9% comparable sales growth in the quarter, which brings our annual comparable sales growth to 5.6% for the year,” CEO Hubert Joly said in a statement.

International entertainment segment comp sales increased 11% from a 23.8% decline in 2017, generating 9%, or $123.8 million, in revenue. The segment generated $102.9 million in revenue last year.

While it was reported that Best Buy will be shuttering all domestic branded mobile stores later this year, overall domestic revenue in the quarter was negatively impacted by the closure of 18 big box stores.

Meanwhile, from a profitability standpoint, Best Buy operating income in the domestic segment declined, which CFO Corie Barry attributed to higher employee compensation and SG&E expenses.

“This is due to the increase in the incentive compensation expense for more than 85,000 store and corporate employees as a result of the very strong performance throughout the year, and to the investments we’ve made in the business,” Barry said. “These expenses were partially offset by efficiencies and cost savings.”