I think you might well be surprised by the list, as created by TWICE, the industry publication of record for the consumer electronics industry. Comments in italics are my own additions to the list:
#1: Best Buy, with 917 stores, sales increased 11.1% 2006 to 2007.
No surprise here. Best Buy has done a masterful job of marketing, retailing and store design. There really is no competition for them at this point in terms of stand-alone companies that have good selection, good brands and good employees.
#2: Wal-Mart, with 3414 stores and 22.7% increase in sales.
Think about that. Wal-Mart is already a huge retail presence, the 1600 pound gorilla and the single largest retail company in the United States. Between 2006 and 2007 their retail sales increased almost 23%. That’s incredible. If there’s one store that is a threat to the existing hegemony of CE retail, it’s Wal-Mart, a company that generally tends to crush any niche it sets its sights on anyway (for example, groceries).
#3: Circuit City, with 684 stores and a 5.9% decrease in sales.
It’s that decrease that tells you all you need to know about why Circuit City is not a healthy company and why firms like Blockbuster are circling for the kill (and assets). I’ve written about this before: The Logic of Blockbuster buying Circuit City.
#4: Dell, with 1 store and approximately even sales 2006 to 2007.
Honestly, I never put two and two together and realized that Dell Computer would be one of the top five CE retailers in the United States. But sales in 2007 were $7.088 billion which is a whole lotta laptops!
#5: Target, with 1591 stores and a 23.8% increase in sales.
Just as Wal-Mart represents a huge threat to the world of retail CE, so does Target, with its more upscale, fashionable positioning in the marketplace and well-designed electronics area. I know that I often find myself their when I want small CE devices and add-ons.
#6: Costco Wholesale, with 389 stores and a 28.6% increase in sales.
Holy cow, that’s almost a 30% increase in CE sales from 2006. Yet it’s no surprise: as consumer electronics continue to devolve into commodities that a company whose entire focus is on cheap commodity sales should rise to prominence. This also really makes you wonder how much people care about selection, because Costco might have good prices, but their selection and variety stinks. But, with $4.9 billion in CE sales, apparently people don’t really care that much.
#7: Gamestop, with 4008 stores and an increase of 32.3% in sales.
Yep, Gamestop. That dorky video game retail outlet in the Mall has an impressive 4000+ outlets and clearly can thank Nintendo for the Wii and Sony for the Playstation-3 for contributing to their superb results in 2007.
#8: Apple Retail Stores, with 177 stores and a 40.5% increase in sales.
It wasn’t too many years ago that Apple opened its first retail store in Palo Alto, California, and industry analysts said it’d fail. I mean, people want choices and selection, not a uni-vendor store. Right? Wrong. Very wrong. What’s most impressive is that Apple has achieved an aggregate $4.079 billion in sales with only 177 stores. That’s a staggering per-store revenue.
#9: RadioShack, with 4447 stores and a decrease of 10.8% in sales.
Visiting a RadioShack is always somehow like traveling back in time to the CE world of the 80s where unknown gizmos and slick salespeople were what counted, not the shiny techno world of Best Buy / Apple. RadioShack is unquestionably on a long, slow burn and are finding it increasingly difficult to remain relevant in the twenty-first century.
#10: Sears, with 1765 stores and a sales increase of 1.9%.
Another die-hard, Sears is perhaps the greatest competitor to Wal-Mart in terms of the demographic and socio-economic customer base. When was the last time you bought something at Sears, though?
And, just for completeness, here are #11-20: Sam’s Club, Amazon.com, CompUSA (now defunct), Fry’s Electronics, Newegg.com, Office Depot, Staples, Army-Air Force Exchange, Toys R Us and Micro Center.
What I find most interesting about this list is how few online retailers are in the top ten, but how most of the next grouping, #11-20, are almost all online retailers. It’s a testament to the kinesthetic importance of retail outlets in the world of consumer electronics too: people can buy their CE from an online outlet — as I did my Sony HDTV, when I bought it from Amazon.com — but they still want to touch it first, to see it and reassure themselves that it’s worth the investment.
I imagine that 2008 or, perhaps, 2009, will see RadioShack and Sears off the top ten, replaced by Amazon.com and, perhaps, Fry’s Electronics. And sales overall? Up, up, up: 2006 total aggregate CE sales were $114.5 billion and 2007 sales were $125.3 billion. That’s a big upward trend and even with a weaker economy I see no reason not to expect continued growth as HDDVD is phased out, Blu-Ray becomes more popular and the cut-off of analog-only TV approaches ever closer.
What do you think, dear reader?