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PCR looks at the novelty gadget sector

A novel idea

It is often said that Christmas seems to come earlier each year and, with many UK retailers expecting shoppers to loosen their purse strings this festive season after a tough couple of years, it can’t come soon enough.

While birthdays are usually reserved for personal and meaningful gifts, Christmas presents are often allowed to be more frivolous, making novelty products an attractive prospect in the electronics sector.

“Christmas has historically been a time when consumers are happy to spend on novelty gadgets for gifts and I don’t see that changing anytime soon,” says Yen Tru, a marketing executive at Interactive Ideas. “Our customers are all looking forward to this peak period as confidence starts to grow in the market again.”

Target Components marketing manager Caroline Spillane puts the popularity of novelty electronics down to two factors: “They are often considered the ideal present for ‘the guy who has everything’, as well as generally not being expensive.”

With such a wide variety of devices available, from wacky mice to USB-powered executive toys, these gadgets make great stocking-fillers. But, according to EntaTech sales executive Stuart Dick, they are not only a hit at Christmas. “With regards to the remote control products that we sell, there is a peak in the summer months to coincide with the school summer holidays,” he says, adding that toys such as helicopters and speedboats are the most popular among school children.

However, Dick acknowledges that the sector has been hit by the recession: “Obviously the current economic climate has affected sales of products that are primarily an impulse buy, such as remote control gadgets.”

By contrast, CCI’s category manager Cliff Cheetham takes the opposite view: “The cheaper impulse-buy products seem to have retained the levels of business, while the more expensive products have certainly been impacted.

“I’m forecasting a strong Q4 with the run up to Christmas, but I’m also expecting consumers to be more selective than usual. The right products will still sell well, but products that sit more at the periphery of the market could struggle.”

The ‘right products’, according to Cheetham, are often the ones that cash in on an existing fan base. “Anything that follows a popular theme with a new feature or USP would be ideal,” he says. “I certainly think the new iPod Nano is a great example of this – the new video function has certainly revitalised the appeal of what was becoming a slightly mundane product.”

Dick believes that, like many mainstream electronics, the current trend with novelty gadgets is that smaller is better: “Palm-sized fun seems to be all the rage,” he comments, adding that radio-controlled toys in particular “are now widely available to fit in the palm of your hand”.

Because there is such a broad spectrum of novelty products available, it can be difficult to separate the wheat from the chaff. This means distributors all need their own strategies for selecting a winner.

“It’s important to pick the products that can offer more to the consumer, have a different angle and are innovative enough to stand out in what can be a crowded market,” Tru says.

While choosing products that stand out from the crowd can be a good strategy, Cheetham says CCI is often wary of gadgets that are too quirky: “We tend not to go for the really unusual gadgets as you have to be fairly intimate with some of the niche markets to be confident of selling the product consistently. While we are a specialist distributor we still sell to the mainstream IT channel.

“We’ve had slightly unusual products that just failed to perform when the benefits weren’t perceived by end users and resellers. It’s always difficult to predict what trend is going to be the next big thing,” he adds. “I have occasionally regretted not taking on a product which later became massive, but I keep those details to myself.”

Some might consider novelty goods a risky item to stock anyway, but distributors say there are benefits and good margins to be had, both in the run up to Christmas and at other times of the year.

Cheetham comments: “If you can identify a new trend, the opportunity to bring onboard a significant amount of business quickly is very attractive and can add a good slice of profit to the bottom line without a lot of the hassles associated with developing a new product line from scratch and with no end user pull.”

Dick adds: “We can provide our customers with the opportunity to capitalise on the gift market at peak times and offer something different to talk about and show in store.”

With all that in mind, are you going to stock anything novel this Christmas?

Lego MP3 Player and Digital Camera
Distributor: Interactive Ideas
SRP: £49.99 and £59.99

The MP3 player has 2GB of internal memory and a full-colour display. The 3 mega-pixel camera has an built-in flash, colour 1.5-inch LCD screen, digital zoom and holds up to 80 photos. Children can build onto both devices, integrating them into their Lego creations

Mini UFO USB Hub
Distributor: EntaTech
SRP: £9.99

Saitek’s USB hub has four high-speed ports and an alternating five-colour LED. It is compatible with all USB devices and comes in nine different colours, plus two additional pattern designs

Mouse Speakers
Distributor: Gem
SRP: £19.99

Satzuma’s 9.5cm-tall mouse-shaped speakers use a USB input, so they don’t require an audio jack. The stereo speakers have an inbuilt amplifier, so no batteries are needed

Mole in a Hole
Distributor: Gem
SRP: £14.99

This miniature version of the classic ‘whack-a-mole’ arcade game is USB or battery powered. Each round is 30 seconds or one minute long, with the speed increasing as the game progresses. It also features an LCD scoreboard and six interactive sounds

Wifi Detector Keyring
Distributor: Target Components
SRP: £6

This compact key-ring device lets you know if a wireless internet connection is available at your current location. The user presses the button and the three LEDs show how strong the signal is

Spotter Webcam
Distributor: Interactive Ideas
SRP: £35.91

Cyber Snipa’s telescope-shaped webcam has a detachable seven to 18 times zoom lens and is mounted on a sturdy adjustable tripod. The device, which plugs in via USB, features an external button for taking still pictures

Santa Claus MP3 Player
Distributor: Target Components
SRP: £18

This Christmas-themed MP3 player has a 2GB capacity and a Li-ion rechargeable battery

Diamante Mouse
Distributor: Gem
SRP: £11.99

This bejewelled mouse, which is PC and Mac compatible, features 800dpi sensitivity and a scroll wheel

Photo Mouse
Distributor: Interactive Ideas
SRP: £12.72

Users can display an image of their choice in the photo mouse, which is then lit by an integral white spotlight when the device is plugged in. A template is provided for cutting pictures into the right shape

Digital Photo Keychain
Distributor: CCI Distribution
SRP: £10.95

This Sweex keyring works in the same way as a digital photo frame, with a 1.5-inch screen that displays a slideshow of your picture in intervals of up to two minutes. It has an internal memory of 1MB – roughly 59 images – and has an built-in rechargeable battery

SingStand iPod Karaoke System
Distributor: CCI Distribution
SRP: £69.99

The Memorex SingStand is designed for use with iPod and iPhone, but is compatible with any MP3 device with a headphone jack. The stand enables users to sing along to any track and apply voice control and echo effects. It also comes equipped with dual microphone inputs for duet performances and can be connected to musical instruments

Photo Alarm Clock
Distributor: Misco
SRP: £44.99

This new alarm clock from HANNspree combines an alarm clock, a photo viewer, a music player and FM tuner. It comes in a black gloss finish, with customisable wallpaper options including a calendar mode. The extra large buttons mean it can also be used by children

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