Consumer Electronics & Appliances Stores
ompanies in this industry sell household appliances, cameras, computers, and other electronic goods. Major companies include Best Buy, Conn's, GameStop, and the retail operations of Apple (all based in the US); as well as Currys PLC (the UK); Fnac Darty (France); GOME Retail Holdings (China); the CECONOMY-owned MediaMarkt and MediaMarktSaturn (both based in Germany); and Yamada Denki (Japan).
Global consumer electronics market is expected to reach about $1.1 trillion by the end of 2023, according to Statista. China accounts for the market with the largest revenue with about $257.6 billion in 2023. The telephony market is the largest segment with an expected revenue of $498.3 billion by the end 2023. However, the US is still experiencing a weak market with a 9.9% annual decrease, according to the US Census Bureau.
The US consumer electronics and appliances store industry includes about 30,000 stores with combined annual revenue of about $91 billion.
Competitive Landscape
The competitive landscape for US consumer electronics (CE) retailers has changed dramatically over the past decade amid rapidly evolving technology and the growth of e-commerce. In the e-commerce market, Amazon, Apple, and Best Buy, among other companies, according to Statista. Since the telephony market is one of the strongest markets for consumer electronics, companies such as T-Mobile and Verizon remain the top consumer electronics retailer in the US, according to ScrapeHero.
Profitability for individual companies depends on the ability to generate store traffic and repeat business, as well as effective merchandising. Large companies enjoy economies of scale in purchasing and marketing. Small companies can compete effectively by offering specialized products or superior customer service. The US industry is concentrated: the 20 largest companies account for about two-thirds of sales.
Competitive Advantages:
Omni-Channel Business Model -- As consumers migrate online, retailers that successfully merge their in-store and digital operations to offer speedy home delivery and in-store pickup for items ordered online will come out ahead, especially among younger, tech-savvy consumers. By seamlessly melding in-store and online operations, CE retailers have been able to beat back showrooming -- where consumers try out products on store shelves only to purchase them online (often from Amazon) -- and recapture lost sales.
Ship-From-Store Fulfillment -- The ability for retailers to ship products purchased online directly from a nearby store improves product availability and delivery times for customers. Brick-and-mortar CE retailers like Best Buy leverage their national store networks to beat even Amazon on delivery times employing the strategy. As consumers come to expect next- and even same-day delivery of online purchases, retailers who can deliver goods fastest will have a competitive edge.
Compelling In-Store Experience -- To drive traffic to physical stores in the digital age, CE chains are focusing on creating compelling hands-on experiences that can't be matched online. Apple was an early innovator, drawing huge crowds to its stores, where consumers can try out and purchase products and get technical support from experts.
Highly Trained Employees -- As technology and devices become more sophisticated, consumers increasingly are relying on highly trained store employees to explain products in detail and even repair them.
Companies to Watch:
Fresh off a five-year turnaround plan, market leader?Best Buy?is making the case for brick-and-mortar retail in the digital age, while embracing online and mobile technology to survive. After years of losing sales to Amazon and discounters like Walmart, the company's revenue jumped more than 10% in fiscal 2021 (although revenue growth slowed to about 1% the following year). To revive its business and fend off Amazon, Best Buy has invested in price-matching, partnering with suppliers, faster delivery, improving the search function on its website, updating its mobile app, and improving customer service to draw shoppers to its stores and website.
Video game retailer GameStop is stuck in a prolonged sales slump as video game sales move to digital downloads and streaming and consumers delay console purchases ahead of new releases for Sony's PlayStation and Microsoft's Xbox. The company, which recently hired its fifth leader in less than two years and has closed hundreds of stores amid declining sales, is attempting to diversify its revenue by expanding into new merchandise categories, including genre-related figures and apparel. As game makers Sony, Nintendo, and Microsoft shift to delivering game content digitally, GameStop stores risk becoming irrelevant, much like now-defunct Blockbuster Video stores.
Dixons Carphone, a leading consumer electronics and telecommunications retailer in Europe, is struggling amid changing consumer habits and softness in the UK mobile phone market as consumers hold on to their handsets longer. The company is tweaking its merchandising mix as consumers move away from products like digital cameras in favor of using their phones to take photographs. Dixons has been losing sales to Amazon and other online retailers as European consumers shift their buying online.
Products, Operations & Technology
Computers and peripheral equipment account for about 50% of the consumer electronics and appliances market, followed by televisions, audio and video equipment
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Also includes the following chapters:
Quarterly Industry Update
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Industry Indicators
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Business Challenges
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Trends and Opportunities
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Call Preparation Questions
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Industry Forecast
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Industry Websites
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Glossary of Acronyms