How’d We Do?: A Look Back at our 2018 CE Retail Predictions
With the New Year right around, these last few weeks before the turn of the calendar present the perfect opportunity to reflect on the past 12 months and everything that the industry has accomplished in that time. After the whirlwind rollercoaster ride that was the year 2017, these past 365 days have really represented a marked improvement in both actual performance from a revenue standpoint, and a boosted confidence level for the industry.
So, needless to say, 2018 was a positive year for the consumer electronics retail industry.
But thinking way back to the end of last year, Dealerscope lofted up some predictions for the space, and while we’re sitting here in a very reflective mood, we wanted to recall those predictions to see how we did. So, here’s a quick recap of our 2018 CE retail predictions alongside the actual outcomes. (Also, don’t forget to check out our predictions for the upcoming year in consumer electronics retail.)
1. Digital Imaging will start to trend up.
Recap: Digital Imaging is a category that we were very high on during the final months of the year last year. Despite the obvious challenges that the space has faced with the rise of the smartphone, it’s managed to hang around and is now entering this nostalgic sort of phase with up and coming youngsters getting into the instant print game. And that’s partly what led us to the prediction that the category would start to trend up in 2018.
Result: Digital imaging still sits in the bottom-five products of our DS Index survey, but the trend was positive for the category. After averaging a 5.98 confidence level on a scale of 1-to-10 in 2017, the category rose to 6.68 in 2018. What’s more, the category saw it’s single-highest score in the month of December, and it’s currently on a four-month streak of rising confidence levels. So, while it’s got a ways to go as far as a comeback is concerned, retailers have shown that there’s still room for digital imaging in their stores.
2. Connected Home will be one of the strongest performing categories.
Recap: Despite everything we heard about the struggles retailers had with pushing connected home product to their customers, and customers’ all around unwillingness to adopt smart home technology, there was reason to remain optimistic about the category. As Parks Associates research showed last year, more than 100 million U.S. households did not have a smart home device at the end of 2016—leaving a massive window of opportunity wide open for this space.
Result: And it once again paid off. Connected Home finished 2018 in a virtual tie for the top spot for the highest-rated products in our DS Index. The category was a few hundredths of a point away from being that top-rated product, but the fact that it continues to outperform other traditionally strong categories proves how highly retailers think of the category. Connected Home is presenting itself as a major opportunity for the CE retailer—both as a product to sell and as a conversation starter to creating deeper relationships with the customer.
3. The DS Index will track higher throughout the year.
Recap: Looking back on it, this wasn’t really that much of a bold prediction. 2017 was the year of the Retail Apocalypse, and expecting that the tides would turn and confidence would grow coming out of such a down year really wasn’t that difficult to project. Still, we made the call because it had to be made.
Result: The DS Index tracked higher throughout the year. In fact, on a year-over-year basis, the 2018 DS Index trend line came in above the 2017 trend line in 10 of the 12 months of the year. Looked at as a hole, the average confidence score for the entire industry in 2018 was a 190.08, a solid 4 points above the 186.01 from 2017.
4. Omnichannel strategies begin to pay off.
Recap: Omnichannel was certainly the buzzword of the year for retail in 2017, and we felt like the payoff would be seen throughout the year in 2018. With all of the groundwork being done to craft those omnichannel experiences for the customer, the retail industry was sure to see something come of it in the very near future.
Result: Seems we were a little off with this one. While the industry seemed to have a lot of positive press around the concept of omnichannel experiences paying off (especially around the holidays with BOPIS promotions and more) the industry was actually trending downwards on according to our online and foot traffic confidence scores. Though the scores tracked somewhat higher throughout the majority of the year, the late summer/early fall drop off really hurt these scores, ultimately resulting in a downward trend line.
5. CE retailers will hit/exceed their sales goals by a wider margin.
Recap: Sales results have been an interesting thing to follow with the DS Index, especially to see how they ultimately correlate to the confidence level of the month they match up to. In 2017, sales held strong—relatively speaking—even as the DS Index experienced that massive losing streak in the spring and summer months. That was followed up with strong Q4 months, which led to the prediction that the momentum would carry into 2018.
Result: There was an improvement in sales goal performance, but perhaps not to the level that we anticipated seeing this year. The year sort of ebbed and flowed for retailers. There were a few very close calls in which the scales almost tipped towards more retailers missing their sales goals than hitting or exceeding them—which would have been a first for the DS Index. But there were also two straight months in which more than 70 percent of retails hit or exceeded their sales goals.