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Week-end Edition - Day 2 & Day 3 - IFA International

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trade news Us retaILers

trade news Us retaILers Learn tO LOVe CHanGe MaJOr PLaYers set tO PrOFIt FrOM COCOOnInG COnsUMers By Emmanuel Poidevin The US is presently in a transition phase in terms of consumer behaviour — and this is likely to benefit the major retailers as the country moves out of the downturn and into a healthier economic cycle. This was the conclusion of yesterday's ShowStoppers panel discussion into key retail trends in the US, moderated by Dave Graveline, host and Executive Producer of Advanced Radio Network's Into Tomorrow radio show. Joining him on stage to discuss how the US market's dominant players are adapting their strategies to beat the economic blues were NPD Group's Ross Rubin, Consumer Technology Publishing's Susan Schreiner, CrunchGear's John Biggs and Enderle Group's Rob Enderle. In the retail market, Rubin said that the crisis is resulting in fierce competition to lower prices, particularly in the LCD TV and netbook markets. However, Best Buy and Walmart appear to be bucking the downward trend, with both reporting an increase in market share. Meanwhile, the e-commerce boom has boosted Amazon. com into fifth position in the US retailer ranking. Schreiner added the major US retailers are also paying more attention to regional markets in an effort to target local customers. Age, gender, income and statistics such as unemployment rate are increasingly being taken into consideration in the formulation of local strategies. Upgrading inventory systems is also a growing trend, Schreiner observed, with many US retailers now relying more on distributors for category management. "It will be interesting to see how Apple Stores, with its culture of customer service and easy product access, will impact on the US retail market," Schreiner added. In terms of changing in consumer behaviour, the panel identified simplicity, quality and durability as key drivers. "The end consumer is looking for more simple and affordable products," said Schreiner, adding that retailers have to face the fact that the days of the impulse buy are over. People are not only focused on price, Schreiner added, but also on quality and durability. The decline in the sale of larger CE products, such as washing machines, echoes the woes of the US construction business, which has been hit hard by the downturn. However, the market for small appliances has been growing steadily, as consumers turn to wellness, cooking and health-care products to help cocoon them from the recession. On the product front, there are likely to be some disappearances. In the netbook market, the race for the lowest price often translates into lowest value for the consumer and lower margins for the retailers, Biggs noted. Smartphones were initially for smart audiences only, Biggs added — often corporate ones, because of their complexity. But with the runaway success of the iPhone, with its the user-friendly interface and cool image, smartphones are now targeting a much broader demographic which is bad news for the makers of GPS devices, MP3 players and sport watches as their features are now all available in one device, Biggs said. Biggs concluded that the trend seems to be towards making incremental changes to products, rather than redesigning entire devices. "People are looking for products they are familiar with," he added. BUYER’S VOICE “Our company has people visiting the IFA every year since at least 15 years.” In this section, every day we will field the thoughts and opinions of buyers at IFA. Today, we are very happy to welcome Johan van Stijn BV, IT Administrator – Sebastiaan van Stijn. The Netherlands. What are your main reasons for coming to IFA? Discovering what's new; new products, new brands that might be interesting to add to our assortment How are your company's supply strategies changing at the moment? Why? Because of the economic situation, some suppliers start to target 'cheaper' markets, no longer allowing us to make the profit we need to supply our customers the service they expect from quality products. Therefore we're forced to look at alternatives How have issues of sustainable development been affecting your purchasing decisions? We're mainly selling higher quality products and have our own technicians to provide our customers the service to keep their equipment running (preventing the equipment from being 'recycled' too soon) How important is IFA for you as a forum for learning more and "networking" and why? Quite important. Our company has people visiting the IFA every year since at least 15 years. Talking the talk: NDP Group's Ross Rubin (left), Enderle Group;s Rob Enderle, CrunchGear's John Biggs and Consumer Technology Publishing's Susan Schreiner IFA International • Saturday, 5 th & Sunday, 6 th September 2009 39

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