Tuesday, December 19, 2006

Estimating Holiday Sales: Brick & Mortar vs. Non-Traditional Retailers

Despite tough year-over-year comparisons, SatRad growth in 2006 has still been very strong, jumping almost 50%, from 9.3 million subscribers to an estimated 13.8 million by year end. Projecting exactly how strong has left many analysts scratching their heads.

How accurate the widely followed surveys, ie, Bridge and NPD? These results only cover Brick & Mortar Retailers (B&M's) like Best Buy and Circuit City, but do not include the non-traditional retailers (NTR's) like TSS-Radio, Skyboxusa and SRS, which are grabbing an increasing market share.

B&M's are claiming a slowdown in sales, however, I wonder if pricing has anything to do with this. Based on advertised prices, the NTR's seem to be selling at 20-30% discounts. For example, the Stiletto 100 is approximately $380 ($340 plus tax and shipping) at the B&M's while the same item is $300 (no tax, free shipping) at the NTR's. The Inno is $240 at the NTR's and $330 ($290 plus tax and shipping) at the B&M's. In addition to significant cost savings, many consumers chose to shop at the NTR's because their informed staff actually understand the products they are selling.

We will get a better idea of the NTR's impact, and the accuracy of NPD and Bridge surveys when subscriber numbers are released in early January. Until then, the analysts might be stabbing in the dark.

12/19/2006 10:50:00 PM

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