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Electronics Unit Sales Surge, But Revenue Down

PHYSICAL: NPD: Blu-ray Player Sales Up 53% Over Thanksgiving Weekend

By Susanne Ault -- Video Business, 12/9/2009

DEC. 9 | PHYSICAL: Blu-ray Disc players, computers and TVs were among surging hardware categories on Black Friday, but extreme price slashing led to an overall decline in consumer electronics revenue from last year, according to the NPD Group.

From Nov. 22 to Nov. 28, Black Friday week revenue fell 1.2% from the comparable 2008 frame to $2.7 billion. These results did mark some improvement over the 3.4% drop in consumer electronics revenue suffered in 2008 versus 2007.

On a unit basis, Blu-ray player sales rose 53%. Other retailers, including Abt Electronics, have told Video Business of doubling their business over 2008. Many stores have acknowledged that widespread price cuts did bite into their revenue gains for the category. Walmart and Best Buy were among stores leading the low-price march in offering $78 and $99 Blu-ray set-tops, respectively.

Although average pricing fell 30% from last year to under $150, said NPD, Blu-ray hardware was one of the few electronics categories to enjoy a revenue spike in the single digits. More mainstream consumers are beginning to demand the reasonably priced players, which is helping drive the category forward.

Retailers are also devoting more space to the product, as Blu-ray offers better returns then even lower priced standard DVD players, which can be had today for under $50.

Blu-ray players are doing very well," said Stephen Baker, NPD’s VP of industry analysis. "In general it’s a product catregoery that has seen some steady volume increases all year. And it's something that stores want to sell."

Computers and TVs were the top-performing consumer electronics categories this year, said NPD. Similarly driven by price slides, computer sales volume hiked 63%. The average price for notebooks fell by 26% to a $500 tag. With TVs, volume sales rose 15%, but heavy discounting drove down revenue by 9%. The average flat-panel TV price was $535, down 20% from 2008.

“Consumers came out this year because there were deals to be had—the same reason they have been shopping for electronics all year,” said Baker. “What made Black Friday different this year is how aggressive those price cuts were. This year, retailers and manufacturers knew it wasn’t going to be about increasing revenue; it needed to be about getting consumers excited to shop and moving those products out of the stores.”

Elsewhere in consumer electronics, camcorder unit sales jumped 55%; computer hard drives, up 33%; and GPS units, up 15%.

Among other price drops NPD recorded, average camcorder tags fell 33%; point-and-shoot cameras, down 7%; GPS, down 14%; and stereo headphones, down 19%.

©2009 Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.