Port Washington, NY, March 31, 2008 – The consumer technology industry, whose performance has traditionally outpaced the broader economy, is showing signs of being affected by today’s weakening economy, especially in certain cities, according to the Market Tracking Service provided by leading consumer and retail information provider The NPD Group, Inc.
According to NPD, five of the six designated market areas (DMAs) with the biggest declines in consumer technology spending for the fourth quarter of 2007 - among the top 30 DMAS based on population - were also housing markets with some of the most significant price declines for the fourth quarter of 2007 (as reported by The National Association of Realtors). Sacramento, Tampa, Phoenix, Detroit, and Orlando all experienced the largest declines in consumer technology spending, based on dollars per store.
Q4 2007 Consumer Technology Spending By Market |
|
| Total U.S. | -4.3% |
| Sacramento | -14.0% |
| Tampa | -12.8% |
| Phoenix | -11.2% |
| Detroit | -11.1% |
| Orlando | -9.1% |
It’s not just overall consumer technology spending which is showing weakness, specific consumer technology categories, including ones which were huge hits nationally during the 2007 holiday season, are being hit hard in these weakest markets. Total U.S. LCD TV dollars per store grew by 45 percent in the fourth quarter of 2007, but Orlando, for example, only saw 28 percent growth. Another example was notebook computers which declined by 2% in Sacramento while the total U.S. experienced 13 percent growth.
And it’s not just higher ticket items taking the hit. Across the U.S., ink sales dropped slightly under five percent and paper revenue fell about eight percent during the fourth quarter. However, in these poorest performing consumer technology markets, the revenue declines were much steeper. Ink spending ranged from a 5.7 percent decline in Phoenix all the way to 11.8 percent in Tampa. Paper sales took a plunge as well, from 9.3 percent in Phoenix to 14.4 percent in Tampa.
“Seeing sales results like these, at such a granular level, really drives home the notion that technology is not quite the necessity as national data, and past history, may indicate,” said Stephen Baker, vice president of industry analysis, The NPD Group. “From expensive to low cost, from cutting edge and new to the old and mundane, technology products are struggling to maintain their share of consumer spending in markets where the local economy is poor. In order to deliver future growth at the same levels as the past it’s important to be able to pinpoint which local markets are doing well and which markets are struggling, figure out why, and then develop strategies to correct the situation.”
About Market Tracking Service
NPD's Market Tracking Service reports point-of-sale (POS) information from up to 70 retailers representing more than 16 thousand doors across 50 DMAs. This information helps retailers and manufacturers identify over- and under-performing local markets. This enables them to use powerful measures to drill into the underlying causes use the insights to improve sales, distribution and profits.
About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,600 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless.For more information, contact us or visit http://www.npd.com.