NPD Group: While Consumer Technology Sales Slow During Holidays, Last-Minute Shoppers Set a Record
Wednesday, 03 January 2007
According to weekly point-of-sale (POS) data from consumer and retail information provider The NPD Group, consumer technology retail sales from the week of Black Friday through the week ending December 23, 2006, grew 6.5 percent from the same time period in 2005 to $8.75 billion, a slowdown from the 10 percent increase seen last year.
However, last-minute shoppers were out the week of Christmas looking for those last-minute deals. It was a record week for retailers with almost $2.5 billion in sales, accounting for over 28 percent of all the holiday volume and beating the 27 percent of holiday volume done at the same time last year.
However, the growth issues resonated even during the record-setting week. Sales were up only 11 percent compared to the 23 percent in the final week last year.
“The sales pace that started on Black Friday continued through Christmas,” said Stephen Baker, vice president, industry analysis, The NPD Group. “Revenue is still increasing but at a slower rate. That can be attributed to several factors, including huge price reductions on in-demand items, such as flat-panel TVs, as well as Christmas Eve falling on a Sunday, which eliminated revenue totals from that day into the last shopping week’s final numbers,” said Baker.
Holiday Hits
If you got a new LCD or plasma TV, digital camera, notebook computer, or MP3 player for the holidays you weren’t alone. Those five categories were the top sellers this year, accounting for 42 percent of overall volume, up from the 33 percent the top five categories represented in 2005.
This was the year of the LCD TV. Tremendous price cuts on all big screen flat-panels resulted in dramatic market share gains for the larger size TVs. Sales of 32 inch and above LCD and plasmas accounted for 50 percent of flat-panel sales, up from 35 percent last year. Thirty-two inch LCDs outsold every size and type.
There was a lot of hype in the MP3 market leading up to the holiday shopping season and it may have paid off. Over 5.1 million MP3 players were sold, making it the best-selling product category with a retail price over $100.
DSLRs led the digital camera market with an 82 percent jump in unit sales spurred by an average price that dropped from $950 in 2005 to $830 in 2006.
Notebook computers dominated the retail PC market capturing about two-thirds of PC sales.
Navigation systems found their way into the hands of many shoppers this year to become the fastest growing category at retail with revenue increasing by 143 percent and unit growth up 309 percent.
Some smaller stocking stuffers also made a big mark over the holidays. Digital cable sales plugged in $37 million in revenue, a 200 percent increase over last year. Hard drives experienced a 24 percent jump in revenue, while USB flash increased 28 percent.
“Pricing and availability were two of the main reasons so many categories did well,” said Baker. “Consumer technology is not just for the tech geek anymore, it’s marketed for everyone from grandparents to their grandchildren. Every year we see new products enter the market, making it fresh and desirable for consumers to keep spending.”