As the retail industry prepares for the long, hot summer months, consumer electronics retailers participating in the Dealerscope CE Retail Confidence Index (DS Index) continued their long hot streak of improving confidence. A month after setting a new record-high confidence score, the industry broke its record once again with a mark of 213.89 entering June. The 6-plus point bump over May can be attributed to solid improvements in product confidence levels as well as a 0.57-point increase in retailers’ confidence in their ability to drive foot traffic this month.
“I believe the U.S. is in a very strong position in the world,” one retailer commented. “I also feel that most Americans have been able to make up for many years of poor economy results.”
The most basic question asked in our monthly survey is to provide a ranking of the retailer’s confidence on a scale of 1 to 10, with 10 being the most confident. Entering June, the composite score of that question had only surpassed an 8.0 one time—last month, when the CE retail community scored an 8.08. In June, crushed that mark with an 8.43. In similar fashion, the industry has rarely seen its confidence level in the ability to drive foot traffic get past the 8.0 threshold. It only has hit that mark (an exact 8.0 score) twice before—May 2019 and way back in February 2017. Entering June, retailers achieved a confidence score of 8.57.
Looking deeper into the improved numbers, this hot streak has also coincided with strong and improving sales figures from the industry. After a rough stretch during the fourth quarter that saw near 50-50 splits in sales goals hit and missed, CE retailers have roared back during the past three months.
Nearly three quarters of CE retailers reported hitting or exceeding their sales goals in April, a 5-point improvement over last month and just 1 point shy of February’s year-to-date high. Broken down a little further, we found that of those who hit or exceeded their sales goals, 43 percent reported exceeding their sales goal, compared to 29 percent who hit their goal. That 43 percent figure is the highest percentage of retailers to exceed their sales goal since February of 2018 when 44 percent reported doing so.
Another Strong Products Month
Our June DS Index survey was another strong one for the individual products categories. Retailers saw their June product confidence scores outshine lifetime averages in 12 of the 13 product categories that we survey for. The only category that didn't rank higher was Gaming, which matched its lifetime average.
Eight of the 13 categories were up month-over-month. The largest gains were experienced by VR (up 1.94 points), Car Tech (up 1.57 points), Connected Home (up 1.13 points), and Drones (up 1.03 points). The biggest losers in the month—ironically—were some of the categories that are the strongest performing overall, including Smartphones (down 0.67 points), Digital Imaging (down 0.33 points), and Wearables (down 0.18 points).
Forecasting ahead, July has traditionally been the start of the falling off point for the CE retail industry. With such soaring confidence heading into the summer months, we anticipate a slight downturn in the next month or so, but with retailers still performing so well at the point of sale, we don’t foresee as drastic a downturn or a losing streak as strung out as we’ve seen over the past two years.