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Consumer Electronics Sales Analysis - Lower Cost Consumer Electronics are Moving!It has been widely assumed that weakening economic fundamentals and confidence would lead US consumers to slow overall spending (see TCI article, Tech Channel Index & Other Economic Indicators) for a view into consumer confidence and buying behavior). However, has the recent economic slowdown changed what consumers are buying as well as how much they're buying? Have retailers properly anticipated and adjusted their stocking strategies for this shift?The following chart isolates the impact of product mix shift on the US Broad-line retail channel1 and tracks retailers' effectiveness at adjusting properly. This is measured by comparing recent changes in the average per unit value (i.e., the wholesale equivalent of average selling price) of goods sold out to the average per unit value of inventories remaining on the shelf 2. 
The chart identifies several trends simultaneously. First, the sharp decrease in average per unit value (APUV) for sales out (blue line) indicates that consumers dramatically lowered their average price point when shopping at Broad-line retailers (a similar effect did not appear for Electronics or Office Supply retailers). Second, the decreasing APUV for inventory remaining on the shelves (grey line) indicates that these retailers are adjusting their inventory stocking strategies to accommodate this change in buying patterns. Third, and perhaps of greatest importance for OEMs, the rate at which the retailers have shifted their inventories towards lower end SKUs has not kept pace with buying behavior of consumers. This suggests that the same higher end SKUs that consumers are steering away from may be piling up on the Broad-line retailers' shelves (see www.techchannelindex.com) for recent trends in retailer inventories). OEMs should plan for a trend towards lower end models in their sales forecasts. Moreover, they should review relative stocking levels of higher price-point SKUs at broad-line retailers to anticipate where inventory may be sufficient to cover several weeks of anticipated demand.
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About the Tech Channel Index The Tech Channel Index is a unique compilation of point of sales and inventory data collected across the global indirect channel that is designed to provide this timely insight. As of August 2008, Index metrics and reports are derived by aggregating and normalizing over 5 million transactions collected from over 1500 distributors and retailers each week. Participating Index companies represent over $30 billion in annual channel sales in multiple high tech product categories. www.techchannelindex.com 
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