Finding Money in Tablets

Toshiba Excite 10 SE tablet
Dealers ponder current trends and expectations for tablets

Tablets are on fire. CEA statistics show exponential growth in a variety of brands and prices, with no sign of abatement. U.S. unit shipments leapt from 32 million in 2011 to 80 million last year and are expected to nearly double again this year. The numbers are mind-blowing, but unfortunately they’re attached to products with very little margin.

So if you’re an independent dealer, what is it that makes tablets worth carrying?

From the day the Apple iPad burst onto the retail scene in 2010, tablets have served dealers as traffic-drivers and magnets for sales of much more lucrative accessories. That is still the case, said Doug Schatz, vice president of electronics merchandising for the Nationwide Marketing Group. But tablets are also an effective way for his group’s members—who sell a variety of categories, including electronics, appliances, bedding and furniture—to drive traffic and stimulate sales of lower-turn, higher-margin products.

Even for dealers who don’t sell electronics, tablets are useful for a number of reasons. One is that they attract a younger demographic; another is that, due to their varied price points, they can be used as giveaways or sold at greatly reduced prices.

“It’s good category adjacency,” Schatz said. “You have electronics-only members who’ve expanded into the notebook and tablet categories, and those involved in appliances and bedding, as well as electronics. And those who are not in electronics want to get the benefit of attraction to the category, so they integrate it into their promotional strategies.

“It’s all about getting that virtuous cycle of the best blend of traffic-driving products and higher-margin products,” he added. “It’s how it all works harmoniously to grow the business.”
Many independents have opted not to embrace the tablet category because of the low margins. Bob Cole, president of Bob and Ron’s World Wide Stereo, Hatfield, Pa., is one. But he does see the point in carrying tablets to accommodate his clients.

Editor in chief of Dealerscope
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