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The Best of 2008

November 6, 2008

Jeff O'Heir

Gary Chorman didn't skip a beat when asked to name the best new product of the year.

"That would be Electrolux's laundry line. It's the hottest thing in the industry," said Chorman, the owner of Millman's Appliances in Rehoboth Beach, Del. "I know appliances pretty well and this is state-of-the-art. It's well above anything else in the market right now."

Chorman wasn't the only dealer to come up with a few "wow" products for Dealerscope's annual industry survey of the best new companies, products and technologies to emerge in the last year. Industry leaders, though, had a tougher time naming a new company or brand-new product or technology to hit the CE scene in past 12 months. They said the economic downturn has stymied start-ups and the development of cutting-edge offerings.

"It's a tough question to answer because I don't think there was anything breathtaking," said George Manlove, president and CEO of Vann's, a retailer in Missoula, Mont. "But we have seen more products and technologies mature into the mainstream."
Indeed, industry insiders said the improved quality and feature sets of flat-panel TVs, technology upgrades to home control lines, updates and refreshes of existing A/V products, green initiatives, and greater penetration of hot products like GPS units, digital cameras and all things gaming generated the most excitement on sales floors and online.

"The excitement is not so much on the early adopter side but how firmly entrenched the products are in people's everyday lives," said Marc Cook, general manager of Abt Electronics in Glenview, Ill. "We're still doing tons with GPSs, flat-panel TV sales are still astonishing and Blu-ray players are gaining more traction. Then there are other things like the Vudu player, the Sony Reader, the iPod touch. They are all becoming prevalent in digital lifestyles."

Those products and initiatives not only created buzz this year; they will continue to drive customer traffic and sales into the holiday season and through the coming year, industry leaders said. Most consumers, they added, will skip big-ticket sales this holiday season but will still buy plenty of lower-cost CE products, especially as prices of GPSs, Blu-ray players and flat-panel TVs are cut to attract shoppers. "The holiday season is part of our culture; people will still buy gifts for other people," said Warren Chaiken, president and COO of distributor Almo, Philadelphia. "Will sales be the same as last year? Probably not. But we're in the best stocking position we've ever been in and we're ready to service dealers in the fourth quarter."

Although appliance sales have decreased along with the housing market, Gary Chorman believes Electrolux's new line of premium laundry and kitchen goods, especially the Turquoise Sky washer and dryer, will give consumers a reason to buy. The laundry line—which also comes in Mediterranean Blue, Silver Sands and Island White—has one of the largest clothes capacities and fastest wash-to-dry times (about 36 minutes to wash and dry a load) in the industry, Chorman said, adding that innovative features such as the IQ-Touch and Wave-Touch controls are great product differentiators. He also gushed about the different features of the new ovens, such as the Perfect Turkey Button, the Luxury Glide Racks and the Induction Hybrid cooktops.

"The whole line is exciting," Chorman said. "The line shows Electrolux really understands the customer experience."
Product features and quality aside, Electrolux also understands the dealer experience, he said. The company is backing the line with a strong advertising and marketing campaign, which includes a promotional tie-in with Kelly Ripa and a fundraising effort for the Ovarian Cancer Research Fund. "That has driven a lot of interest," Chorman said. The company also provides "beautiful" displays and strong dealer and customer support, he added. Millman's Appliances' new branding efforts includes truck wraps that feature a "Welcome Home to Electrolux" campaign.

"What I'm seeing from Electrolux is something that was not slapped together haphazardly in some backroom," Chorman said. "It's been very carefully thought out."

While appliance manufactures are working to improve lifestyles within the home, automotive electronics manufacturers continue to improve upon products that extend home lifestyles to the car.

Rob Elliott, executive director of In Car Experts buying group, pointed to new generations of Pioneer's AVIC-F series and Kenwood's DNX8120 series of in-dash navigation and entertainment systems as solid examples of products that combine convergence, practicality and necessity and give consumers reason to visit specialty dealers. They also provide dealers with greater high-margin installation opportunities, he added.

"I think we've been in a fortunate position that a lot of our partners have had some hot products and advanced technologies that have set new standards," Elliott said, citing AVIC's voice recognition capabilities and built-in MSN Direct data subscription services, and the DNX8120's 6.95-inch color touch-screen display and relay outputs for controlling garage doors and lighting as strong new feature sets.

"Both companies have brought out technologies consumers are looking for. And both pieces have done a good job with receiving HD radio, which is becoming more and more important to our members."

Other mobile electronics standouts include Peripheral Electronics updated lines of OEM integration products; Auto Pages C3 cell phone-based security, remote start and GPS tracking solution; and Rockford Fosgate's Marine Subwoofers,

"In 2008 I've noticed that consumers in general are really winning. There's a lot of real quality product out there that is less expensive," Elliott said. "It's tough for vendors to stay ahead of the curve, but a lot of them have. They've given our members something to talk to the customer about."

It goes without saying that retailers welcome most anything new related to iPods and iPhones. Industry insiders report strong sales on a variety of docking solutions, but many wish for higher margins on what has quickly become a commoditized product line. That's why Dave Glassman, vice president of merchandising at MyerEmco AudioVideo was eagerly awaiting visits from Wadia Digital and Krell reps for a more intimate look at two new high-end docking stations showcased at CEDIA Expo.

"Those look cool because consumers need a better way to listen to their iPods," he said. "We've been shorting ourselves by using cheaper docks. These products give us a way to sell $1,000-to-$1,500 docks."

The Wadia Digital 170iTransport digital player dock (about $349) and Krell's KID iPod dock (about $1,500) and matching Papa dock stereo amplifier (about $2,500) are designed to deliver maximum A/V quality from iPods. While at Expo, Glassman was also taken with Projectiondesign's avielo line of home theater projectors. "They were just blow-you-away bright," he said. "I thought it was a novel design. It's built like a tank; very robust."

Glassman and just about every other dealer with an eye for quality A/V raved about the newest Pioneer Kuro family of flat panels. The name has been around for a while, but dealers treat each release as one of the best "new" products of the year. Abt's Marc Cook is one of them.

"The new panels are just breathtaking; they're staggering. It was one of the few products from CES that delivered on its promise," Cook said, adding that another product on his "best of" list is Sony's VAIO VGC-LT23E, an all-in-one PC/TV that can be wall-mounted to fit a number of applications. "It's true convergence because it serves as a fully functioning PC and quality TV, so you're not trading off in quality on either side."

Convergence will continue to be a popular theme going into the holiday season, especially as consumers look for external devices to securely store increasingly rich photo files and larger music collections, said Fred Towns, senior vice president of sales at New Age Electronics. That, coupled with the growing use of software for recording live music, and editing and storing digital files, has also fueled strong sales of sub-compact computers, such as the Asus Eee, he said. HP's TouchSmart PC, with its touch-screen technology and large monitor, has also sold well. In turn, those systems have generated greater sales of PC speakers, wireless keyboards and other peripherals, Towns said.

In other signs that convergence continues in the home, Tim Coakley, senior vice president of merchandising at DBL, said Denon's S-302, a home theater system that can wirelessly stream content from computers, and the DHT-7 series of A/V receivers with 5.1 speaker packages, have sold well since being recently added to the distributors line card.

"A lot of people have been crying the blues about audio, but that business has been up for us over the last few months," Coakley said, adding that Klipsch's new line of headphones has also been a hit.

When the DBL team met to redesign its fall catalog, the executives increased the number of gaming accessories, a category that has exploded for many distributors and retailers. Anything related to Nintendo's Wii will continue to sell quickly, they report. Nerf's new line of controllers and sports products for the platform are doing particularly well, Coakley said. Tate Morgan, executive vice president of Petra Industries, also saw big sales of anything related to Guitar Hero or Rock Band. "We're moving a ton of that stuff," he said.

On the higher end of the product spectrum, retailers that are developing more sophisticated home installation divisions continue to give high marks for Control 4's new products and initiatives, such as Wi-Fi capabilities, handheld controllers, and partnerships with third-party content providers. The company also continues to partner with new retailers through buying groups, such as the PRO Group and HTSA.

"Control4 has brought us technology and applications that consumers have been begging for: solutions that are easy to use, relatively cost-effective and relatively easy for us to install," Vann's Manlove said. "It has opened up a whole new segment of the market we couldn't reach."

Dealers hope the New Year will bring a lot more of that.

©2008 Dealerscope, North American Publishing Company. All rights reserved.