Port Washington, NY, April 1, 2008 – As we approach the end of the analog TV era, retailers and manufacturers are lowering TV prices to attract late digital TV adopters. To bolster revenue, the industry is focusing on three areas: accessories, A/V components, and services. But have consumers taken to the push? According to a new report from The NPD Group, What’s in the TV Market Basket, they have, but there’s still more room for revenue to rise.
Only 30 percent of consumers surveyed purchased something related to their TV purchase at the time they purchased their TV. Another 40 percent made additional related purchases at a later time. On average, consumers who purchased a TV and additional items at the same time spent more than consumers who made the additional purchases at a later time, $470 and $283 respectively.
HDMI cables, extended warranties, and entertainment cabinets were among the top three additional items consumers purchased, both at the time they purchased their TV and when they went back to make an additional purchase.
Thinner TVs with larger screens have led many consumers to opt for wall mounts for their new TVs, with 19 percent of LCD TV purchasers picking one up with their TV and 20 percent of plasma buyers. Entertainment centers were a big sell with rear-projection TV buyers, but those sales may start to fall off as rear-projection TV sales continue to drop.
As consumers invest in new televisions, adding A/V components becomes a real consideration to enhance the home theater experience. Home theater systems were the most purchased A/V component among all TV purchasers, 13 percent. Plasma buyers had the highest purchase rate at 19 percent.
Installation/set up and delivery represent no inventory cost and high margins for retailers. However, according to the report, very few consumers are actually purchasing those services. Of the 30 percent who made additional purchases with their TV, only nine percent purchased installation/set up for the TV and any related devices. The number drops by almost half, to five percent, of consumers who just wanted help installing their TV. Delivery was only purchased by seven percent of consumers. Among consumers who went back to purchase the installation, that number drops to three percent for both just TV installation and TV and component installation.
“The more that retailers can get a consumer to buy at the initial sale, the better chance they will have to sell them the support they need to get their new home entertainment center up and running at optimum levels,” said Ross Rubin NPD’s director of industry analysis. “With additional A/V components and accessories, retailers offer the parts of the solution. With installations, they bring the solution together.”
Methodology
More than 2,300 members of NPD’s online consumer panel, who were identified as having purchased a TV in the past 6 months, completed surveys from the What’s in the TV Market Basket study from January 11, 2008 – January 21, 2008.
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.