* Best Buy, Amazon, Wal-Mart, Target, Sears, BJ’s to carry
more large screen TVs
* Flat panel TV market has become mature: industry experts
* Wal-Mart adds Toshiba and Panasonic; Target adds Sharp &
LG to assortments
* Amazon to let customers schedule their own delivery day,
help install larger TVs
* Best Buy exec sees sales of screen sizes larger than
55-inches rising year over year
By Dhanya Skariachan
Sept 13 (Reuters) – Television retailers are going to have
one simple message for shoppers this coming holiday season:
Supersize it.
The lack of anything really new to tout means that mass
merchants, online and specialty retailers will try to get people
to trade in that once fancy 42-inch flat screen TV for one that
is 60- or even 90-inches, and at lower prices that wouldn’t have
been fathomable a couple of years ago.
The only problem: If consumers play hard to get, then
margins — for manufacturers and to some extent, retailers
–could get slammed.
The margin pressure “is being felt on all sides,” said Ben
Arnold, NPD Group’s director of industry analysis, adding that
manufacturers are being squeezed harder.
On average, a 50- to 52-inch LCD TV is expected to sell at
$829 this year versus $1370 last year. But the price of a
50-inch LCD TV could fall to as low as $529 or even $499 on
Black Friday, the kickoff to the biggest selling season of the
year, said Tamaryn Pratt, principal of Quixel Research.
While retailers can try to combat the profit hit by selling
more high-margin installation services or TV accessories,
manufacturers have fixed production costs to meet no matter what
they earn on the televisions they sold, Arnold added.
Top retailers Best Buy, Amazon.com,
Wal-Mart and Target told Reuters they were
planning to carry a bigger assortment of large screen TVs this
year.
That is different from what they have done in the past few
years when they played up features like 3-D technology and the
ability to directly stream online content, to win shoppers.
“There is nothing out there that consumers are saying, you
know what, I need to get rid of the TV I have and buy this new
thing,” said Frank DeMartin, Vice President, Retail &
Distribution Sales, Mitsubishi Electric Visual Solutions
America. “This is why the TV business is in a bit of a plateau.”
Data from NPD DisplaySearch on Tuesday showed that global TV
shipments fell for the second straight quarter, declining 8
percent in the second quarter of 2012 from the year-ago period.
INTERNET-ENABLED TVS DISAPPOINT
Global TV shipments are expected to fall 1.4 percent in 2012
after rising 0.1 percent last year, an earlier report from NPD
DisplaySearch showed.
“Many consumers have already upgraded to flat-panel TVs, and
really the next thing for them to do is to go bigger,” DeMartin
said.
About 68 percent of households now own a flat panel TV, and
of those owners, 45 percent own two or more, Arnold said,
underscoring how mature the flat panel market has become.
“The rate of first time buyers buying more premium, feature
laden TVs has slowed,” Arnold said. “To a large extent, TV
buyers are very focused on value (the biggest screen for the
lowest price) with brand and features making less of a
difference in the decision to buy.”
While analysts see longer term potential for
Internet-enabled TVs, the lack of an ecosystem has hurt
widespread adoption so far, Pratt said, adding that her research
has shown a “major disconnect” between current Internet-enabled
TVs and consumers.
Despite thousands of available apps, digital content is only
being streamed by 50 percent of these owners, on a daily or
weekly basis, and more than 80 percent said that this content
was being used just for playing movies, Pratt said.
Many TV owners don’t want to pay more for the other apps and
content, she said, adding that the trend would “dramatically
change” if Apple introduces its anticipated iTV.
“What they are looking for is really the connectivity (of
their TVs) to their mobile devices, whether that be a phone or a
tablet … They want to sync their devices together. To date, we
don’t have a TV that enables you to do that easily.”
There is a “relative ambivalence” for the programming
offered currently by cable and satellite providers, she said.
The fragmentation is in the platforms — manufacturers
partnering with some services but not with others, said Arnold.
“Many allow for video, game and other content downloads, but
if you have TVs, PCs, and tablets of different brands, that
download only lives on that one device and has less value,”
Arnold explained.
“Connected TV services are driven by content, but you can
stream movies to every connected screen in your house now — so
what’s the value proposition? So as just another content box, I
think connected TV’s appeal will be limited.”
EYES ON THE PRICE
The lack of willingness on the consumer’s part to pay more
for features such as 3D, voice and touch screens and portability
features on connected televisions has forced retailers to focus
more on larger screen sizes and add new brands to their TV
assortments, especially ones that sell larger screens for less.
“Fifty-five inches and larger is where our customers are
looking,” Wal-Mart spokeswoman Sarah Spencer said.
The world’s largest retailer is adding Panasonic
and Toshiba brands this holiday season, and plans to
carry the Sharp brand nationwide versus 200 U.S. stores
last year, Spencer said.
Rival Target will carry 60-inch and 70-inch screens this
year. Previously, the largest screen size available at Target
was 55 inches. It added Sharp and LG brands to its
product assortment, and increased the amount of TVs from U.S. TV
maker Vizio, known for its aggressively low prices.
BJ’s Wholesale Club, which is also carrying a larger
assortment of big screens this year, has added LG and dropped
Sony, the warehouse club told Reuters.
Regional chain Meijer has tweeked its assortment to add more
larger TVs.
“Larger displays at 46 inches and greater is where the
growth lies in the marketplace for the balance of the year as
average selling prices continue to decline,” Don Sanderson,
Meijer’s merchandise manager for electronics/media/school &
office, said.
Both Wal-Mart and Target said their assortment of 3D TVs
will be similar to last year. Shoppers still have not warmed up
to the idea of paying a premium for the technology as there is
not enough 3D content to watch.
“Even if some great film or game comes along that is perfect
for a home 3D set up, I’m not sure 3D’s reputation can be saved
at this point,” Arnold said.
OFFERING MORE INCENTIVES
Retailers are also finding other ways to convince the
shopper to buy larger televisions. For instance, Sears and
Wal-Mart are offering more flexible layaway options.
“Last year, we gave our customers 60 days but they came back
and said they needed more time especially for those big ticket
items like the big screen TV,” Wal-Mart’s Spencer said.
Best Buy is offering free delivery on 46-inch and larger
screen TVs. It will also pick up those TVs within 30 days if the
customer is not completely satisfied with their purchase.
“To date, we have been seeing sales of screen sizes larger
than 55-inches increase year over year and expect that to
continue,” said Amy College, vice president Home Business Group
for Best Buy.
Amazon, which has seen a double digit year-over-year
increase in sales of large screen TVs (55-inches or larger), is
offering “free enhanced delivery” on most 48-inch or larger TVs.
This means customers can schedule their own delivery day and one
of Amazon’s shippers will deliver the TV, unpack it, ensure that
it is working properly to guarantee no damage occurred during
transportation, and dispose of all packaging material.
