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Little Change in 3D TV Trends In Holiday Selling, Retailers Say

By Jeff Berman | 12/23/2012

U.S. 3D TV demand and sales trends remained largely the same in the holiday season as what was seen in the rest of 2011, retailers polled by Consumer Electronics Daily told us. The technology is failing to drive consumers into stores, but most U.S. consumers are perfectly willing to accept 3D when it's sold as just another feature of a high-end, fully featured TV, they said.

Consumers "aren't necessarily coming in saying ‘I want a 3D TV,'" Phil Hannon, general manager at Abt Electronics in Glenview, Ill., told us. "They're coming in and saying ‘I want the best TV you've got,' and ‘what are the best features? And those TVs are the ones that just happen to have 3D and "the consumers take them," he said. He predicted that the trend won't change "until the correct technology is out on 3D -- which really means they'll not be super-expensive glasses," and the TVs offer "a much better experience for the consumer."  The situation with smart TVs is similar to that of 3D TVs, he said.  "Customers are starting to understand the benefit of" smart TVs, "so it's certainly helping the business," but "I wouldn't say it's a commanding portion of" Abt's TV business yet, he said.

Disappointingly, 3D really hasn't been" a "driver" of TV sales, said Lyn Perry, CEO of Wilshire Home Entertainment in Thousand Oaks, Calif.; Sales of 3D TV sales were "up dramatically" from 2010, but "it hasn't been anything like the driver that high-definition was, nor did we expect it to be," he told us.

Many visitors to Pflanz Electronics in Sioux City, Iowa, come into the store saying they're not interested in 3D TV, said its president, Vance Pflanz. But they tend to change their tune when 3D TVs are demonstrated to them, he said. "They're really amazed at how good it is," and "I think it helps make the sale of the higher-end product," he said. The one major challenge that his business faced with 3D during the holiday season was a shortage of active shutter 3D glasses for the TVs that it sells, he said. "Most of the TV sets we sell" are 3D now, and some customers come back to the store after buying one to get additional pairs of glasses, he said. "We just had a customer a little while ago that came in and he bought another four pairs of glasses," Pflanz said. The TVs tend to only come with a couple of pairs of glasses, he said. But "right now, we're having a hard time getting glasses," he said. Earlier in 2011, he had no problem getting extra glasses, he said. As of last week, the store was "in bad shape on glasses" for Sony, Sharp and Samsung 3D TVs – "all models," he said.

There wasn't much lack of enthusiasm around 3D TV by customers of Marvin Electronics in Fort Worth, Texas, its president, Stuart Schuster, told us. "3D is fine. You don't pay a lot of extra to get 3D," he said. "The problem is there's no real amount of software out there" yet for consumers to take advantage of the feature, he said. "Everybody wants it, with the exception of a few old farts who don't think it's good for their eyes. Everybody else likes it," he said, joking that he was an old fart also.

TVs were the best-selling holiday season category for Marvin Electronics. "Every kind of TV" sold well – "small, big, expensive, cheap ... I mean those damn things were selling like crazy," Schuster said. But steep TV price declines took its toll on most of the retailers we interviewed (CED Jan 6 p1).

The CE business was "tough in December," Abt's Hannon said. The TV category, in particular, is "very tough" now, he said. November and December TV sales were flat for Abt in revenue and up in units about 7-8 percent, but that was "not enough to overcome the dollar decompression," he said. The problem for the CE sector in general, he said, is "you've got a million people selling products. You've got no real innovation. You've got a declining value from the vendors. TVs are 30 percent cheaper than they were last year." The result is "you almost don't have a chance" as a retailer, he said. TVs also seem to be "reaching market saturation" because "everybody has two or three TVs in their house" now, he said. "We're seeing a real pressure on the retail value of the product and the amount of product people are buying," he said.

Online competition also continued to create a challenge for brick-and-mortar CE dealers, Wilshire's Perry said. Sony XBR TVs were popular during the holiday season, but there were short supplies on them during the holidays, he said. "At the end of December we finally got in our first allocation of 65-inch XBR, which was a long-time coming ... Our entire allocation was pre-sold," he said. As a result, Wilshire "lost a number of sales" to Sony's online store and other online retailers and Perry said his company "refunded a number of deposits" because it "had no product" in November and the first half of December. "That continues to be a real thorn in the side of every retailer with a storefront," he said of the online competition.

© Copyright 2012 Warren Communications News

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