CE Retail Confidence Roars Back with Largest Single-Month Gain in December
The year is going out on an exceptionally high note for the consumer electronics retail industry. According to the results of our latest Dealerscope CE Retail Confidence Index (DS Index) survey, CE retailers reported a confidence gain for the third month in a row. This time, though, retailers’ confidence grew at a rate that hasn’t been seen in the history of the DS Index survey.
For December, CE retailers scored a 199.175, the second highest total in the survey’s history. The DS Index score rose nearly 13.6 points from November, which represents the single-largest month-over-month gain in the survey’s history.
What’s encouraging to note is that the confidence score, in just three months, has more than erased the hole it sank into over the summer and into the early Fall months. On a year-over-year basis, the December confidence score is actually more than 7 points higher than it was in December of 2016 (192.145).
When asked to explain why they scored their confidence the way they did, the sentiment among retailers was mainly positive. Many pointed to a strong start to the holidays—the December survey was conducted over the Black Friday holiday shopping weekend—as well as strong traffic.
“We've trained the consumer to buy during the last week of November,” one retailer said. “Each of the past few years our industry set Black Friday records. But each year we discover the record setting performance was merely a pull-up of December business. I expect the same this year.”
Another credited their confidence gain to their “ability to implement and communicate strong promotions and desirable new products from key vendors.”
Not all retailers experienced a growth in confidence, though: “Online pricing is hard to compete with, and service only means something when they need help,” one retailer commented. “Retail is not good enough for a higher price to provide service until the customer has a problem, and by then its too late.”
Sales Are Strong
CE retailers had one of their strongest months in terms of performance against sales goals, according to the latest Dealerscope survey. The December survey, which collected October results, found that—for just the third time in the history of the DS Index—the percentage of retailers who exceeded their sales goal (37 percent) outpaced the percentage of retailers who missed their sales goal (32 percent). Another 31 percent of retailers said they hit their sales goal on the mark in October.
Collectively, the combined 68 percent of retailers who hit or exceeded their sales goal is the highest total in the survey’s history. That also means that the remaining 32 percent represents the lowest total of retailers who missed their sales goal since Dealerscope launched the DS Index.
Those numbers are incredibly positive for retailers as they look ahead to the last two months of the year. Looking back at last year, just 22 percent of retailers said they exceeded their sales goal in October 2016 while 46 percent reported missing their goal. That’s tremendous improvement year-over-year, and it should mean the industry is set up for a very successful November once all of the numbers go final.
Pumped Up Product Confidence
As you’d expect with the continued rise of the overall confidence in the CE retail industry, that confidence trickled down to the individual product categories that Dealerscope surveys retailers on. In December, every single one of the 13 product categories saw a month-over-month increase in retailer confidence. Some might’ve been subtler than others, but every category was up in December.
The biggest winners heading into December—which should be a sign of which products CE retailers believe will move this holiday season—included Laptops/Tablets (+1.25 points over November), Smartphones (+1.07), Drones (+1.07), and Emerging Tech (+1.05).
Even year-over-year, product confidence levels faired really well in December. There were three products who experienced declines when compared to December of last year— VR, Audio, and Car Tech—but the other 10 product categories all saw confidence level gains.
Again, the products that experienced the greatest gains compared to last year at this time likely shows which products retailers see moving during the holiday shopping season. So, with that in mind, expect Smartphones, Digital Imaging, TVs, Wearables, and Laptops/Tablets to be big sellers—yet again this year.
As 2017 comes to a close, Dealerscope remains confident that the DS Index will continue to increase as the calendar flips to the New Year. January of last year saw the confidence score reach its peak. We expect the momentum of the past few months to keep up, which should result in a new record high for the DS Index. The important thing to watch is how well the industry can maintain that level of confidence throughout the year.