Consumer Retail Electronics Industry Analysis

industry Analysis The US retail consumer el el electroshockroshockronics (CE) grocery store had reported r make upues of $180 meg in 2010. The different revenue streams that make up the reported annual revenue in 2010 for the CE market can be shared out into five key areas Consumer Electronics (CE), which consist of video and audio products Home federal agency which consist of PCs, notebooks, netbooks, tablets, and mobile phones Appliances Entertainment Hardware and Software and serve (see Figure 1).Total gross revenue from the Top 10 electronics retail merchants grew by 6% in 2011 to reach $110 billion. The past two business cycles, fetch been pronounced by slow suppuration, the fall of an CE empire, Circuit City, and complete flavourless line growth of key product areas such(prenominal) as TVs. The market showed minor gains after the fall of Circuit City, but the growth can be attributable to the redistribution of Circuit Citys node base. The major players in this mark et such as Best Buy, Target, Wal-Mart, RadioShack, ect, only grew by 4. 5% in 2011.This is primarily due to the discommode of tablets, and netbooks, and not from existing product lines, already in place. It is definitely patent that redistribution in consumer get patterns ilk the shift to online sponsorping on retailers resembling Amazon. com has definitely impacted the nature of CE retailers. Cognizant Technology Solutions conducted a market study on the Retail CE market, in which they rich person identified 3 key areas which will continue to spur changes in spite of appearance the Retail CE market over the next few years.These 3 key areas as identified by Cognizant are Consumer sophism and frugality, cut-throat competition, and millennial consumer behavior. Consumer Sophistication and Frugality The shift from moving to a commodity centered market, with the advent of online CE retailers akin Amazon, the affect is in the efforts of the sales staff, which has been highly reduced, shoppers know exactly what they are looking for, for the most part, and usage these retail brick and mortar shops as showrooms, where they go to touch and feel the merchandise, earlier they actually decide to purchase these point in time.These customers then usually retreat to the comforts of their home, or the nearest Starbucks, where they usually purchase the same exact item online usually through an online retailer like Amazon. In addition to this sophistication consumers have also become very frugal due to low-spirited economic conditions, and the high unemployment rate that is constantly rising. Consumers are looking for the best deal possible and if it means waiting few days for the item to be shipped then that is what they will do.From a business standpoint this sunrise(prenominal) ideal poses certain operational challenges, Profit Margins (PM), and Distribution. Prices of high ticket items such as large flat screens and high priced PCs have consistently dec lined, the sales that have occurred for this submarket have strictly been for replacement or extension sales & services. These items usually have the highest borders of all CE products.To confine this retailers have revised their revenue mix, by including to a greater extent lower margin items such as notebook PCs and TVs, and high margin products which are sure fire sales such as smartphones, and tablets. Retailers that have focused on single channel distribution strategies such as the retail store model have had to invest in multichannel distribution strategies to compete with the shift in consumer buying behaviors. This method of buying has forced retailers to offer more options in addition to maintain their brick and mortar establishments.Cut Throat Competition Todays CE retailers have everlastingly been con miened with difficult issues, but the pressures to produce a profit are even greater than ever before. Modern CE retailers face significant market competition from the l ikes of discounters such as Wal-Mart, and online retailers such as Amazon. An even more interesting dichotomy that has occurred in the CE market is the inability to modulate supplier from competitor. This has occurred with Apple products, which designs and sells the most demanded consumer electronics.Apple has strict controls as to who distributes their products, any retailer outside of this Apple sphere is at a severe injustice and missing out on an entire market of customers they could have had piquant in commerce. Generation Y and Consumer Behavior The multitasking, always electronically attached group of people we call Generation Y or discontinue cognise as the millennias continue to drive the innovation that is occurring in the notebook/ tablet, and smartphone product lifecycles, which have consistently drove the need for companies like Apple, and the like to have product releases every 6 months.This has created submarkets for the sales of doorories for the tender produ cts as well as service plans from Telecommunications Service providers for data plans to addition the internet, and other media such as streaming music, and video via services like YouTube, and Netflix. This push for the access of media has forced retailers to get into the content provider business.With the advent of the internet and mobile devices generation Yers have instant access to price differentials across different channels enabling them to compare, and price shop while in the actual store standing in front of a product. This has decreased the need for sales staff, and these groups of consumers have relied on prices shopping, and friendly media, looking at reviews products, as well as what their friends have purchased via Facebook, ect to assist them in their CE purchases, this form of purchase has become known as social purchasing.