Consumer Electronics & Appliances Stores
Description
Companies in this industry sell household appliances, cameras, computers, and other electronic goods. Major companies include Best Buy, Conn's, GameStop, and the retail operations of Apple (all based in the US); as well as Currys PLC (the UK); Fnac Darty (France); GOME Retail Holdings (China); the CECONOMY-owned MediaMarktSaturn (based in Germany); and Yamada Denki (Japan).
Global consumer electronics market is expected to reach about $1 trillion by the end of 2025, according to Statista. China accounts for the market with the largest revenue with about $212.9 billion in 2025. The telephony market is the largest segment with an expected revenue of $504.08 billion by the end of 2025.
The US consumer electronics and appliances store industry includes about 30,000 stores with combined annual revenue of about $91 billion.
COMPETITIVE LANDSCAPE
The competitive landscape for US consumer electronics (CE) retailers has changed dramatically over the past decade amid rapidly evolving technology and the growth of e-commerce. Top e-commerce platforms in terms of market cap include Amazon, Pnduoduo, and Alibaba, among others, according to Companies Market Cap.
Profitability for individual companies depends on the ability to generate store traffic and repeat business, as well as effective merchandising. Large companies enjoy economies of scale in purchasing and marketing. Small companies can compete effectively by offering specialized products or superior customer service. The US industry is concentrated: the 20 largest companies account for about two-thirds of sales.
Competitive Advantages:
Omni-Channel Business Model -- As consumers migrate online, retailers that successfully merge their in-store and digital operations to offer speedy home delivery and in-store pickup for items ordered online will come out ahead, especially among younger, tech-savvy consumers. By seamlessly melding in-store and online operations, CE retailers have been able to beat back showrooming -- where consumers try out products on store shelves only to purchase them online (often from Amazon) -- and recapture lost sales.
Ship-From-Store Fulfillment -- The ability for retailers to ship products purchased online directly from a nearby store improves product availability and delivery times for customers. Brick-and-mortar CE retailers like Best Buy leverage their national store networks to beat even Amazon on delivery times employing the strategy. As consumers come to expect next- and even same-day delivery of online purchases, retailers who can deliver goods fastest will have a competitive edge.
Compelling In-Store Experience -- To drive traffic to physical stores in the digital age, CE chains are focusing on creating compelling hands-on experiences that can't be matched online. Apple was an early innovator, drawing huge crowds to its stores, where consumers can try out and purchase products and get technical support from experts.
Highly Trained Employees -- As technology and devices become more sophisticated, consumers increasingly are relying on highly trained store employees to explain products in detail and even repair them.
Companies to Watch:
Fresh off a five-year turnaround plan, market leader Best Buy is making the case for brick-and-mortar retail in the digital age, while embracing online and mobile technology to survive. The company's revenue decreased more than 5% in fiscal 2024. To revive its business and fend off Amazon, Best Buy has invested in price-matching, partnering with suppliers, faster delivery, improving the search function on its website, updating its mobile app, and improving customer service to draw shoppers to its stores and website.
Video game retailer GameStop is stuck in a prolonged sales slump as video game sales move to digital downloads and streaming and consumers delay console purchases ahead of new releases for Sony's PlayStation and Microsoft's Xbox. The company, which recently hired its fifth leader in less than two years and has closed hundreds of stores amid declining sales, is attempting to diversify its revenue by expanding into new merchandise categories, including genre-related figures and apparel. As game makers Sony, Nintendo, and Microsoft shift to delivering game content digitally, GameStop stores risk becoming irrelevant, much like now-defunct Blockbuster Video stores.
Dixons Carphone, a leading consumer electronics and telecommunications retailer in Europe, is struggling amid changing consumer habits and softness in the UK mobile phone market as consumers hold on to their handsets longer. The company is tweaking its merchandising mix as consumers move away from products like digital cameras in favor of using their phones to take photographs. Dixons has been losing sales to Amazon and other online retailers as European consumers shift their buying online.
PRODUCTS, OPERATIONS & TECHNOLOGY
Computers and peripheral equipment account for about 45% of the consumer electronics and appliances market, followed by televisions, audio and video equipment (about 25%), and major household appliances (20%). Other products include computer software, photographic equipment, toys, games, and hobby supplies.
Consumer electronics and appliance retailers include national and regional chains and independent retailers. Major chains and some regional chains may offer a "superstore" format, which can exceed 30,000 square feet. Superstores are most often located in large strip malls in high traffic areas. Other chains may have smaller retail locations ranging from 1,500 to 10,000 square feet, located in indoor shopping or smaller strip malls. Chains may also offer a limited selection of products through kiosks (about 90 square feet) in other retail locations. Independent stores vary widely in size, from a few thousand square feet to larger than a typical superstore.
Many stores carry high levels of inventory for expensive items like plasma screen TVs and personal computer systems to avoid out-of-stocks. Inventory management and sales forecasting are critical to profitability, as rapid advances in technology can significantly decrease demand for older products. During the holiday season, demand for top-selling consumer products like new smartphones and video game consoles can exceed supply. Many large chains offer private-label products to fill gaps in existing product offerings.
Most large retailers buy directly from large manufacturers like Sony, Panasonic, and Toshiba. Independent retailers buy through established buying groups like Nationwide and Resource Plus to increase individual buying power. In most product segments of the consumer electronics industry, suppliers are highly concentrated: Best Buy relies on just five suppliers -- Apple, Samsung, Hewlett-Packard, Sony and LG -- for more than half of total merchandise, while Conn's purchased about two-thirds of its merchandise from six suppliers. For highly anticipated new products like game systems or video games, retailers may place advance orders to guarantee supply.
Global consumer electronics market is expected to reach about $1 trillion by the end of 2025, according to Statista. China accounts for the market with the largest revenue with about $212.9 billion in 2025. The telephony market is the largest segment with an expected revenue of $504.08 billion by the end of 2025.
The US consumer electronics and appliances store industry includes about 30,000 stores with combined annual revenue of about $91 billion.
COMPETITIVE LANDSCAPE
The competitive landscape for US consumer electronics (CE) retailers has changed dramatically over the past decade amid rapidly evolving technology and the growth of e-commerce. Top e-commerce platforms in terms of market cap include Amazon, Pnduoduo, and Alibaba, among others, according to Companies Market Cap.
Profitability for individual companies depends on the ability to generate store traffic and repeat business, as well as effective merchandising. Large companies enjoy economies of scale in purchasing and marketing. Small companies can compete effectively by offering specialized products or superior customer service. The US industry is concentrated: the 20 largest companies account for about two-thirds of sales.
Competitive Advantages:
Omni-Channel Business Model -- As consumers migrate online, retailers that successfully merge their in-store and digital operations to offer speedy home delivery and in-store pickup for items ordered online will come out ahead, especially among younger, tech-savvy consumers. By seamlessly melding in-store and online operations, CE retailers have been able to beat back showrooming -- where consumers try out products on store shelves only to purchase them online (often from Amazon) -- and recapture lost sales.
Ship-From-Store Fulfillment -- The ability for retailers to ship products purchased online directly from a nearby store improves product availability and delivery times for customers. Brick-and-mortar CE retailers like Best Buy leverage their national store networks to beat even Amazon on delivery times employing the strategy. As consumers come to expect next- and even same-day delivery of online purchases, retailers who can deliver goods fastest will have a competitive edge.
Compelling In-Store Experience -- To drive traffic to physical stores in the digital age, CE chains are focusing on creating compelling hands-on experiences that can't be matched online. Apple was an early innovator, drawing huge crowds to its stores, where consumers can try out and purchase products and get technical support from experts.
Highly Trained Employees -- As technology and devices become more sophisticated, consumers increasingly are relying on highly trained store employees to explain products in detail and even repair them.
Companies to Watch:
Fresh off a five-year turnaround plan, market leader Best Buy is making the case for brick-and-mortar retail in the digital age, while embracing online and mobile technology to survive. The company's revenue decreased more than 5% in fiscal 2024. To revive its business and fend off Amazon, Best Buy has invested in price-matching, partnering with suppliers, faster delivery, improving the search function on its website, updating its mobile app, and improving customer service to draw shoppers to its stores and website.
Video game retailer GameStop is stuck in a prolonged sales slump as video game sales move to digital downloads and streaming and consumers delay console purchases ahead of new releases for Sony's PlayStation and Microsoft's Xbox. The company, which recently hired its fifth leader in less than two years and has closed hundreds of stores amid declining sales, is attempting to diversify its revenue by expanding into new merchandise categories, including genre-related figures and apparel. As game makers Sony, Nintendo, and Microsoft shift to delivering game content digitally, GameStop stores risk becoming irrelevant, much like now-defunct Blockbuster Video stores.
Dixons Carphone, a leading consumer electronics and telecommunications retailer in Europe, is struggling amid changing consumer habits and softness in the UK mobile phone market as consumers hold on to their handsets longer. The company is tweaking its merchandising mix as consumers move away from products like digital cameras in favor of using their phones to take photographs. Dixons has been losing sales to Amazon and other online retailers as European consumers shift their buying online.
PRODUCTS, OPERATIONS & TECHNOLOGY
Computers and peripheral equipment account for about 45% of the consumer electronics and appliances market, followed by televisions, audio and video equipment (about 25%), and major household appliances (20%). Other products include computer software, photographic equipment, toys, games, and hobby supplies.
Consumer electronics and appliance retailers include national and regional chains and independent retailers. Major chains and some regional chains may offer a "superstore" format, which can exceed 30,000 square feet. Superstores are most often located in large strip malls in high traffic areas. Other chains may have smaller retail locations ranging from 1,500 to 10,000 square feet, located in indoor shopping or smaller strip malls. Chains may also offer a limited selection of products through kiosks (about 90 square feet) in other retail locations. Independent stores vary widely in size, from a few thousand square feet to larger than a typical superstore.
Many stores carry high levels of inventory for expensive items like plasma screen TVs and personal computer systems to avoid out-of-stocks. Inventory management and sales forecasting are critical to profitability, as rapid advances in technology can significantly decrease demand for older products. During the holiday season, demand for top-selling consumer products like new smartphones and video game consoles can exceed supply. Many large chains offer private-label products to fill gaps in existing product offerings.
Most large retailers buy directly from large manufacturers like Sony, Panasonic, and Toshiba. Independent retailers buy through established buying groups like Nationwide and Resource Plus to increase individual buying power. In most product segments of the consumer electronics industry, suppliers are highly concentrated: Best Buy relies on just five suppliers -- Apple, Samsung, Hewlett-Packard, Sony and LG -- for more than half of total merchandise, while Conn's purchased about two-thirds of its merchandise from six suppliers. For highly anticipated new products like game systems or video games, retailers may place advance orders to guarantee supply.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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