DS Index: CE Retail Confidence Continues its Climb Heading into November
Good news keeps rolling in for the consumer electronics retail community by way of the monthly Dealerscope CE Retail Confidence Index. The latest analysis of the CE retail community found that, heading into November, the DS Index continued its sharp climb. CE retailers reported a monthly confidence score of 185.53, up more than 8 points from October. Since the DS Index bottomed out in September, the industry has seen its confidence level rise nearly 20 points in a two month span.
The November DS Index score is particularly important to keep an eye on because it helps us gauge the confidence of CE retailers as they prepare for the ever-important holiday shopping season. Later this month, the industry will begin a several-week-long stretch of major sales and high-volume sales as consumers scour stores and the Internet for the best deals for others and for themselves.
November also presents a unique opportunity for the DS Index as this is the first month that we can look at year-over-year data. To that end, the November 2017 score rose nearly enough to match last year’s score during the same period (189.495). We’ll continue exploring the year-over-year aspect of the survey below and moving forward.
As for the continuing rise in confidence, the sentiment from the CE retail community is overall just more positive. Retailers reported having success meeting their sales goals on a monthly basis, many reported having a full schedule of integration projects on their plate as consumers look to get work done prior to bad-weather season, and foot traffic it seems is generally increasing.
Additionally, anticipation is already starting to build around Black Friday sales: “There’s plenty of excitement around the early release of Black Friday pricing, and our anticipated business in OLED and Super HD TV's,” one retailer said. “It looks like our premium lineups are in good shape for the holiday shopping season.”
Mixed Product Reviews
Last month, we noticed that confidence around individual product categories continued to falter despite the turnaround in overall confidence. That trend came to an abrupt end heading into November. There were still a few laggards (Drones and Emerging Tech were down month-over-month), but the average product confidence score was up nearly half a point over October. What wasn’t surprising to see was the growth in confidence for the Video/TV market as we head into the month of Black Friday. TVs are always a hot-ticket item this time of year, and CE retailers have no reason to believe why this year would be any different. As 4K TVs continue to decline in price, they should also continue to fly off shelves during the holidays.
Everything other product, though, experienced an increase, with Gaming, Headphones, and Smartphones leading the way—all were up over a point.
The average score for by-product confidence was also up heading into November, coming in at 6.28. This was the first month back up over a 6.0 since August, and it was also the first month that the by-product confidence score experienced an increase since June, bringing a long streak of losses to an end.
That said, the product picture looks a little bit bleaker when you look at the year-over-year picture. The average confidence score down nearly half a point (6.69 last year) and 11 of the 13 product categories that Dealerscope surveys for are worse off than they were during the first month of the DS Index. The worst off products include Drones and Car Tech, each of which are down more than a full point; and Emerging Tech which is the only product category that comes in with a score below 5.0.
Looking at the trending data, month over month, it does seem like the product confidence scores are about a month behind the overall DS Index score, which leads us to believe that the by-product confidence will continue to trend upwards as we reach the end of 2017.
Looking back on past sales performance, the latest DS Index survey revealed that CE retailers once again experienced strong sales performance.
In September, 60 percent of CE retailers reported either hitting or exceeding their sales goal. The breakout there saw 29 percent exceed their goal, 31 percent hit their goal, and 40 percent miss their sales goal.
The 60-40 balance is similar to August’s breakdown, but fewer CE retailers actually exceeded their sales goal. The 31 percent that hit their goal represented a 10 percent increase over the 21 percent who simply hit their sales goal in August. That’s nothing to be ashamed of as an industry, especially considering the weaker-than-expected overall performance from the last quarter and the general economic temperature right now.
Projecting ahead, November does serve as a pivotal month moving forward. Depending on how retailers perform through the Black Friday holiday weekend, we could see a major bump or falloff in confidence heading into December. Last year, confidence rose, and given the current pace of the DS Index, we expect more of the same in 2017.