2017 Baker’s Dozen +1: Stephen Baker’s Annual Holiday Expectations

  • Industry revenue has turned the corner – 2017 will see the best holiday performance in years, as hot new categories and a stable market deliver positive revenue growth in consumer electronics.
  • Thanksgiving week is a marathon, not a sprint – Consumers are ready to buy all week long. Once again, promotions, products, and marketing all coalesce around a full week of events, not just Black Friday. 
  • Sell up, not down – Consumers are hungry to spend on products above entry-level. Better products, better features, and a better experience will beat out lowest price as characteristics for the ideal holiday gift.
  • TVs remain the uber holiday category – Accounting for over 20 percent of holiday revenue, it’s hard to deliver a successful holiday season without an aggressive promotional TV marketplace.
  • Much bigger, is much better – With the days of small screens behind us, bigger and bigger TVs (especially 55”+) continue to win consumer interest and dollars. 
  • Tablets resurface on holiday wish lists – Improved pricing, products, and segmentation will drive sales volumes of tweener size screens this holiday.
  • Smartphone sales stay the course – Flat is the new up.
  • Don’t forget accessories – Holiday is about the smartphone ecosystem, not just the device. Stable smartphone volumes lead to strong sales in high-traffic ecosystem products like cases, power, and audio.
  • Turn up the volume – Audio has re-emerged as a core device feature making up more than 10 percent of holiday sales.
  • Headphone sales are booming – New features, new use cases, and a penchant for cool and for quality, make headphones the fourth largest holiday revenue category.
  • Let the customer’s voice be heard – Voice-controlled speakers will explode as installed base and platform considerations offset revenue and profit requirements.
  • Keen on smart home sales – Smart home product sales will soar, but don’t let expectations get ahead of reality. With just 15 percent of U.S. internet households owning a smart home device, there’s a long runway of growth ahead. Smart Home appears on the cusp of becoming a very strong holiday category.
  • Snow day activities – PC gaming will be the hottest consumer segment in the PC and accessories market this holiday with volumes up in double digits.

Baker’s Bonus Prediction: Holiday shopping doesn’t end on December 25th, as the post-holiday opportunity is growing.

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