Consumer electronics stores in the us industry report
1. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 1
IBISWorld Industry Report 44311
Consumer Electronics
Stores in the US
September 2012 Justin Waterman
2 About this Industry 17 International Trade 32 Industry Assistance
2 Industry Definition 18 Business Locations
2 Main Activities 33 Key Statistics
2 Similar Industries 20 Competitive Landscape 33 Industry Data
3 Additional Resources 20 Market Share Concentration 33 Annual Change
20 Key Success Factors 33 Key Ratios
4 Industry at a Glance 20 Cost Structure Benchmarks
22 Basis of Competition 34 Jargon & Glossary
5 Industry Performance 23 Barriers to Entry
5 Executive Summary 24 Industry Globalization
5 Key External Drivers
6 Current Performance 25 Major Companies
9 Industry Outlook 25 Best Buy Co. Inc.
11 Industry Life Cycle 27 RadioShack Corporation
13 Products & Markets 29 Operating Conditions
13 Supply Chain 29 Capital Intensity
13 Products & Services 30 Technology & Systems
15 Demand Determinants 30 Revenue Volatility
16 Major Markets 31 Regulation & Policy
www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com
2. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 2
About this Industry
Industry Definition
Main Activities The primary activities of this industry are
Retailing new household appliances (e.g. refrigerators, washing machines and ovens)
Retailing new personal appliances (e.g. hair dryers, curling irons and electric razors)
Retailing computers alongside other household and personal appliances
Offering repair services in conjunction with retail operations
The major products and services in this industry are
Audio equipment
Computer hardware and software
Home and office equipment
Major appliances
Small electric appliances
TV and video equipment
Other
Similar Industries 44312 Computer Stores in the US
Operators in this industry retail new computer peripherals and prepackaged computer software in addition
to office equipment and supplies.
44313 Camera Stores in the US
Operators in this industry sell new cameras and photographic equipment and supplies, often in conjunction
with repair services and film developing.
45112 Hobby & Toy Stores in the US
Operators in this industry retail new toys, games and hobby and craft supplies (except needlecraft).
45321 Office Supply Stores in the US
Operators in this industry retail new stationery, school supplies and office supplies in conjunction with new
office equipment, furniture and supplies.
45331 Used Goods Stores in the US
Operators in this industry retail a wide assortment of used goods, including used consumer electronics.
81121 Electronic & Computer Repair Services in the US
Services in this industry include repairing and maintaining consumer electronic equipment, computers and
office equipment, and other electronic equipment.
3. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 3
About this Industry
Similar Industries 81141 Appliance Repair in the US
Services in this industry include repairing and servicing home and garden equipment and household
continued appliances.
45411a E-Commerce & Online Auctions in the US
Operators in this industry retail consumer electronics via the internet.
45411b Mail Order in the US
Operators in this industry retail consumer electronics via catalogs or mail order forms.
Additional Resources For additional information on this industry
www.appliancemagazine.com
ApplianceMagazine.com
www.ce.org
Consumer Electronic Association
www.census.gov
US Census Bureau
4. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 4
Industry at a Glance
Consumer Electronics Stores in 2012
Key Statistics Revenue Annual Growth 07-12 Annual Growth 12-17
Snapshot
$80.9bn -2.6% 3.0%
Profit Wages Businesses
$2.2bn $9.0bn 39,354
Revenue vs. employment growth Per capita disposable income
Market Share
10 4
5 2
% change
% change
0 0
−5 −2
−10 −4
Year 04 06 08 10 12 14 16 18 Year 06 08 10 12 14 16 18
Revenue Employment
SOURCE: WWW.IBISWORLD.COM
p. 25
Products and services segmentation (2012)
Key External Drivers
9.9% 1.5% 0.4%
Home and office Other Small electric
Per capita disposable equipment appliances
income
Consumer
10.2%
31%
TV and video
sentiment index Audio equipment equipment
External competition
Number of households
18%
Computer hardware
and software
p. 5 29%
Major appliances
SOURCE: WWW.IBISWORLD.COM
SOURCE: WWW.IBISWORLD.COM
Industry Structure Life Cycle Stage Mature Regulation Level Light
Revenue Volatility Medium Technology Change Low
Capital Intensity Low Barriers to Entry Medium
Industry Assistance Low Industry Globalization Low
Concentration Level Medium Competition Level Medium
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 33
5. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 5
Industry Performance
Executive Summary | Key External Drivers | Current Performance
Industry Outlook | Life Cycle Stage
Executive
Summary
Key External Drivers Per capita disposable income Consumer sentiment index
6. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 6
Industry Performance
Key External Drivers
continued
Number of households
External competition
Per capita disposable income Consumer sentiment index
4 100
2 90
% change
Index
0 80
−2 70
−4 60
Year 06 08 10 12 14 16 18 Year 04 06 08 10 12 14 16 18
SOURCE: WWW.IBISWORLD.COM
Current
Performance
7. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 7
Industry Performance
Current Performance
Industry revenue
continued
8
4
0
% change
−4
−8
−12
Year 04 06 08 10 12 14 16 18
SOURCE: WWW.IBISWORLD.COM
Electronics versus
home appliances
8. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 8
Industry Performance
Electronics versus
home appliances
continued
External competition
9. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 9
Industry Performance
External competition
continued
Industry
Outlook
Future trends
10. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 10
Industry Performance
Future trends
continued
Electronics
convergence and
saturated product
market
11. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 11
Industry Performance
Life Cycle Stage
30 Maturity Quality Growth
% Growth of profit/GDP
Key Features of a Mature Industry
Company High growth in economic
consolidation; importance; weaker companies Revenue grows at same pace as economy
level of economic close down; developed Company numbers stabilize; M&A stage
importance stable technology and markets Established technology & processes
25
Total market acceptance of product & brand
Rationalization of low margin products & brands
20
15
Quantity Growth
Many new companies;
minor growth in economic
importance; substantial
10 technology change
5
Hobby & Toy Stores
Consumer Electronics Stores
Computer Stores
0 TV & Appliance Wholesaling
Shake-out
Electronic Part & Equipment Wholesaling
Shake-out
–5
Decline Potential Hidden Gems Time Wasters
Crash or Grow? Future Industries Hobby Industries
–10
–10 –5 0 5 10 15 20 25 30
% Growth of establishments
SOURCE: WWW.IBISWORLD.COM
12. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 12
Industry Performance
Industry Life Cycle
This industry
is Mature
The industry is underperforming Products, markets and technology
13. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 13
Products & Markets
Supply Chain | Products & Services | Demand Determinants
Major Markets | International Trade | Business Locations
Supply Chain KEY BUYING INDUSTRIES
99 Consumers in the US
Households are the primary buyers for consumer electronics stores. Purchases are made for
private use in homes, rather than resale.
KEY SELLING INDUSTRIES
42362 TV & Appliance Wholesaling in the US
This industry supplies household-type electrical appliances, room air-conditioners, gas clothes
dryers or household-type audio or video equipment.
42369 Electronic Part & Equipment Wholesaling in the US
This industry supplies electronic parts and equipment.
52222 Auto Leasing, Loans & Sales Financing in the US
This industry helps retailers finance sales.
Products & Services Products and services segmentation (2012)
9.9% 1.5% 0.4%
Home and office Other Small electric
equipment appliances
10.2%
Audio equipment
31%
TV and video
equipment
18%
Computer hardware
and software
29%
Total $80.9bn Major appliances
SOURCE: WWW.IBISWORLD.COM
TV and video equipment
14. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 14
Products & Markets
Products & Services Computer hardware and software
continued
Audio equipment
Major appliances
15. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 15
Products & Markets
Products & Services Small electric appliances
continued
Home and office equipment
Demand
Determinants
16. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 16
Products & Markets
Demand
Determinants
continued
Major Markets Major market segmentation (2012)
11.5%
Consumers aged
65 and older
13.2%
Consumers aged
24 and younger 39.5%
Consumers aged
35 to 54
17.3%
Consumers aged
25 to 34
18.5%
Total $80.9bn Consumers aged
55 to 64 SOURCE: WWW.IBISWORLD.COM
Consumers aged 55 to 64
Consumers aged 25 to 54
Consumers younger than 25
17. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 17
Products & Markets
Major Markets Consumers aged 65 and over
continued
International Trade
18. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 18
Products & Markets
Business Locations 2012
West
AK
0.2 New
England
ME
Great Mid- 0.5
Lakes Atlantic 1 2
NY 3
WA MT ND 7.0
5 4
1.9 0.3 MN
Rocky
0.5 1.8
WI
OR Mountains SD
0.4
Plains 2.0 MI
3.7
PA
3.8
6
7
1.3 ID IA OH 9 8
0.7 WY 3.4
0.3
NE
1.3
IL IN WV VA
4.5 2.2 2.5
West NV
0.5 0.5
KY
UT MO
1.2 NC
0.8
1.1 CO KS 2.2 2.8
1.9 1.1 TN
SC
Southeast
1.8
CA 1.3
11.6
OK AR GA
1.3 1.0 AL 3.0
AZ MS 1.4
1.9 NM
0.6 Southwest 0.8
TX LA
1.3 FL
7.6 6.6
West
HI
0.3 Additional States (as marked on map) No. of establishments (%)
1 VT 2 NH 3 MA 4 RI Less than 3%
0.2 0.5 2.0 0.3 3% to less than 10%
10% to less than 20%
5 CT 6 NJ 7 DE 8 MD 9 DC
1.1 3.0 0.3 1.7 0.1
20% or more
SOURCE: WWW.IBISWORLD.COM
19. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 19
Products & Markets
Business Locations Establishments vs. population
30
20
%
10
0
West
Great Lakes
Mid-Atlantic
New England
Plains
Rocky Mountains
Southeast
Southwest
Establishments
Population
SOURCE: WWW.IBISWORLD.COM
20. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 20
Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks
Basis of Competition | Barriers to Entry | Industry Globalization
Market Share
Concentration
Level
Concentration in this
industry is Medium
Key Success Factors Having a wide and expanding Experienced work force
product range
IBISWorld identifies
250 Key Success
Factors for a
business. The most
Proximity to key markets Attractive product presentation
important for this
industry are:
Ability to control stock on hand Having links with suppliers
Cost Structure Profit
Benchmarks
21. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 21
Competitive Landscape
Cost Structure
Benchmarks
continued
Purchases
Wages
Sector vs. Industry Costs
Average Costs of
all Industries in Industry Costs
sector (2012) (2012)
100
3.5 2.7 Profit
9.5 11.1 Wages
Purchases
80 Depreciation
Marketing
Rent & Utilities
Other
Percentage of revenue
60
72.0 70.0
40
20
1.5 0.8
3.0 3.9 1.6
3.4
7.1 9.9
0
SOURCE: WWW.IBISWORLD.COM
22. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 22
Competitive Landscape
Cost Structure Other
Benchmarks
continued
Depreciation
Basis of Competition Internal competition
Level & Trend
Competition in
this industry is
Medium and the
trend is Steady
23. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 23
Competitive Landscape
Basis of Competition
continued
External competition
Barriers to Entry
Barriers to Entry checklist Level
Level & Trend Competition Medium
Concentration Medium
Barriers to Entry
Life Cycle Stage Mature
in this industry are Capital Intensity Low
Medium and Steady Technology Change Low
Regulation & Policy Light
Industry Assistance Low
SOURCE: WWW.IBISWORLD.COM
24. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 24
Competitive Landscape
Barriers to Entry
continued
Industry
Globalization
Level & Trend
Globalization in this
industry is Low and
the trend is Steady
25. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 25
Major Companies
Best Buy Co. Inc. | RadioShack Corporation | Other Companies
Major players
(Market share) RadioShack Corporation 5.6%
46.5%
Other
Best Buy Co. Inc. 47.9% SOURCE: WWW.IBISWORLD.COM
Player Performance
Best Buy Co. Inc.
Market share: 47.9%
Best Buy Co. Inc. (domestic segment) – financial performance
Revenue Operating Income
Year* ($ million) (% change) ($ million) (% change)
2007-08 33,328 7.4 1,999 5.2
2008-09 35,070 5.2 1,758 -12.1
2009-10 37,138 5.9 2,103 19.6
2010-11 37,070 -0.2 2,054 -2.3
2011-12 37,615 1.5 1,855 -9.7
2012-13** 38,721 2.9 1,786 -3.7
*Year-end February; **Estimate
SOURCE: ANNUAL REPORT AND IBISWORLD
26. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 26
Major Companies
Player Performance
continued
Financial performance
Best Buy Co. Inc. – financial performance
Revenue Operating Income
Year* ($ million) (% change) ($ million) (% change)
2007-08 39,892 11.4 2,185 2.2
2008-09 44,737 12.1 2,014 -7.8
2009-10 49,243 10.1 2,368 17.6
2010-11 49,747 1.0 2,374 0.3
2011-12 50,705 1.9 1,085 -54.3
2012-13** 50,523 -0.4 983 -9.4
*Year-end February; **Estimate
SOURCE: ANNUAL REPORT AND IBISWORLD
27. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 27
Major Companies
Player Performance
RadioShack
Corporation
Market share: 5.6%
Financial performance
RadioShack Corporation – financial performance
Revenue Net Income
Year ($ million) (% change) ($ million) (% change)
2007 4,075.4 -11.0 236.8 222.6
2008 4,034.8 -1.0 189.4 -20.0
2009 4,073.6 1.0 205.2 8.3
2010 4,265.8 4.7 206.1 0.4
2011 4,378.0 2.6 72.2 -65.0
2012* 4,523.4 3.3 70.0 -3.0
*Estimate
SOURCE: ANNUAL REPORT
28. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 28
Major Companies
Player Performance
continued
Other Companies
Circuit City Company
Exited in 2009
29. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 29
Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility
Regulation & Policy | Industry Assistance
Capital Intensity
Capital intensity
Capital units per labor unit
Level
0.5
The level of capital
intensity is Low 0.4
0.3
0.2
0.1
0.0
Economy Retail Trade Consumer
Electronics
Stores
Dotted line shows a high level of capital intensity
SOURCE: WWW.IBISWORLD.COM
Tools of the Trade: Growth Strategies for Success
New Age Economy Investment Economy
Recreation, Personal Services, Information, Communications,
Health and Education. Firms Mining, Finance and Real
benefit from personal wealth so Estate. To increase revenue
stable macroeconomic conditions firms need superior debt
are imperative. Brand awareness management, a stable
and niche labor skills are key to macroeconomic environment
product differentiation. and a sound investment plan.
Capital Intensive
Labor Intensive
Consumer
Electronics
Stores
Computer Stores Hobby & Toy Stores
Traditional Service Economy
TV & Appliance Wholesaling Old Economy
Wholesale and Retail. Reliant Electronic Part & Agriculture and Manufacturing.
on labor rather than capital to Equipment Wholesaling Traded goods can be produced
sell goods. Functions cannot Camera Stores using cheap labor abroad.
be outsourced therefore firms To expand firms must merge
must use new technology or acquire others to exploit
or improve staff training to economies of scale, or specialize
increase revenue growth. in niche, high-value products.
Change in Share of the Economy SOURCE: WWW.IBISWORLD.COM
30. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 30
Operating Conditions
Capital Intensity
continued
Technology
& Systems
Level
The level of
Technology
Change is Low
Revenue Volatility
Level
The level of
Volatility is Medium
31. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 31
Operating Conditions
Revenue Volatility
continued
A higher level of revenue Volatility vs Growth
volatility implies greater
industry risk. Volatility can 1000 Hazardous Rollercoaster
negatively affect long-term
Revenue volatility* (%)
strategic decisions, such as 100
the time frame for capital
investment.
10
When a firm makes poor Consumer Electronics
investment decisions it
may face underutilized 1 Stores
capacity if demand
suddenly falls, or capacity 0.1 Stagnant Blue Chip
constraints if it rises –30 –10 10 30 50 70
quickly. Five year annualized revenue growth (%)
* Axis is in logarithmic scale
SOURCE: WWW.IBISWORLD.COM
Regulation & Policy
Level & Trend
The level of
Regulation is
Light and the
trend is Steady
32. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 32
Operating Conditions
Industry Assistance
Level & Trend
The level of
Industry Assistance
is Low and the
trend is Steady
34. WWW.IBISWORLD.COM Consumer Electronics Stores in the US September 2012 34
Jargon & Glossary
Industry Jargon BIG-BOX STORE A retail store that is differentiated by POINT OF SALE (POS) A system used at checkout in
its sheer size and large range of products, including retail stores using computers and cash registers to
electronics, household goods and other consumer capture transaction data at the time and place of sale.
products. RADIO FREQUENCY IDENTIFICATION (RFID) A
BLU-RAY An optical disc format designed to display technology that tracks products from the time they
high-definition video and store large amounts of data. leave the assembly line to the time they leave the store
BRICK-AND-MORTAR A store that has a physical by releasing continuous signals from a chip.
presence and location, as opposed to an online retailer. SMARTPHONE A mobile phone that offers advanced
COMPARABLE-STORE SALES A retail measure used to PC-like capabilities.
assess the true performance of retail outlets by taking WHITE GOODS Large electrical goods used
out the effect of new store openings and only looking at domestically, such as refrigerators and washing
sales growth of existing stores. machines, typically white in color.
IBISWorld Glossary BARRIERS TO ENTRY Barriers to entry can be High, INDUSTRY CONCENTRATION IBISWorld bases
Medium or Low. High means new companies struggle to concentration on the top four firms. Concentration is
enter an industry, while Low means it is easy for a firm identified as High, Medium or Low. High means the top
to enter an industry. four players account for over 70% of revenue; Medium
CAPITAL/LABOR INTENSITY An indicator of how much is 40 –70% of revenue; Low is less than 40%.
capital is used in production as opposed to labor. Level is INDUSTRY REVENUE The total sales revenue of the
stated as High, Medium or Low. High is a ratio of less industry, including sales (exclusive of excise and sales
than $3 of wage costs for every $1 of depreciation; tax) of goods and services; plus transfers to other firms
Medium is $3 – $8 of wage costs to $1 of depreciation; of the same business; plus subsidies on production; plus
Low is greater than $8 of wage costs for every $1 of all other operating income from outside the firm (such
depreciation. as commission income, repair and service income, and
CONSTANT PRICES The dollar figures in the Key rent, leasing and hiring income); plus capital work done
Statistics table, including forecasts, are adjusted for by rental or lease. Receipts from interest royalties,
inflation using 2011 as the base year. This removes the dividends and the sale of fixed tangible assets are
impact of changes in the purchasing power of the dollar, excluded.
leaving only the ‘real’ growth or decline in industry INDUSTRY VALUE ADDED The market value of goods
metrics. The inflation adjustments in IBISWorld’s and services produced by an industry minus the cost of
reports are made using the US Bureau of Economic goods and services used in the production process,
Analysis’ implicit GDP price deflator. which leaves the gross product of the industry (also
DOMESTIC DEMAND The use of goods and services called its Value Added).
within the US; the sum of imports and domestic INTERNATIONAL TRADE The level is determined by:
production minus exports. Exports/Revenue: Low is 0 –5%; Medium is 5 –20%;
EARNINGS BEFORE INTEREST AND TAX (EBIT) High is over 20%. Imports/Domestic Demand: Low is
IBISWorld uses EBIT as an indicator of a company’s 0 –5%; Medium is 5 –35%; and High is over 35%.
profitability. It is calculated as revenue minus expenses, LIFE CYCLE All industries go through periods of Growth,
excluding tax and interest. Maturity and Decline. An average life cycle lasts 70
EMPLOYMENT The number of working proprietors, years. Maturity is the longest stage at 40 years with
partners, permanent, part-time, temporary and casual Growth and Decline at 15 years each.
employees, and managerial and executive employees. NON-EMPLOYING ESTABLISHMENT Businesses with
ENTERPRISE A division that is separately managed and no paid employment and payroll are known as
keeps management accounts. The most relevant non-employing establishments. These are mostly set-up
measure of the number of firms in an industry. by self employed individuals.
ESTABLISHMENT The smallest type of accounting unit VOLATILITY The level of volatility is determined by the
within an Enterprise; usually consists of one or more percentage change in revenue over the past five years.
locations in a state or territory of the country in which it Volatility levels: Very High is greater than ±20%; High
operates. Volatility is between ±10% and ±20%; Moderate
Volatility is between ±3% and ±10%; and Low Volatility
EXPORTS The total sales and transfers of goods
is less than ±3%.
produced by an industry that are exported.
WAGES The gross total wages and salaries of all
IMPORTS The value of goods and services imported
employees of the establishment.
with the amount payable to non-residents.
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