Gary Shapiro, president and CEO of the Consumer Technology Association (CTA), shares his thoughts on the tech retail market ahead of CES Asia.
Companies are facing challenges in the retail space. The number of stores is shrinking. In the United States Radioshack shrunk and has reorganised, the growth of Amazon has been nothing short of miraculous.
It’s difficult to be a retailer. They have the cost structure of the brick and mortar retailers, they pay higher sales tax… so the retail environment is under pressure. Consumers with Amazon Prime have gotten away from going into stores, which is a shame because it doesn’t allow them to discover new technology as much. It’s unassisted selling. And there’s a concern there.
We’ve always been dedicated to the proposition of the independent dealer – that’s one of the things our association believes in. The independent dealers are necessary to help introduce new technologies. But it’s a challenge, because of pricing pressures on independent dealers, and they always push towards bigger conglomerations.
The head of our organisation is actually an independent retailer. His name is Dan Pigeon, he’s a volunteer for the Dallas Texas company called Starpower, we have Randy Fry of Fry’s Electronics as his best bud and one of our board members.
We have a combination of retailers and suppliers we try to grow our industry together, with a collective view of pushing toward new technologies, trying new things and pushing our government to do things so the environment is good for innovation and technology.
Obviously the other big pressure is the economic event, to the extent that if the economy is doing well, the industry is likely to do well.
The third pressure is innovation. Sometimes, when something new happens like 4K Ultra HD, the pricing pressures bring it down so low very quickly, it’s difficult. Even now, with a DVD version of 4K Ultra coming, that’s very promising – we’ll see whether consumers want to own those and movies again, after they’ve got accustomed to not owning them.
So the advantage we have is there are so many new technologies coming, some of which require installation, some of which require assisted sale. There are opportunities to have greater security to save money on energy, to have greater education for your child, more customization for different things, all sorts of devices like wearables that are coming and assisting healthcare, personalized medicine and wellness.
"Independent dealers are necessary to help introduce new technologies. But it’s a challenge for them because of pricing pressures."
So we’re exploding in the five or six new categories all at once. Going back 20 or 25 years, if we had one big introduction of a category, it was huge – now we’re in the middle of five or six.
I think the advantage we have now is that technology is going in many different directions, and it’s going very quickly. Whether it’s in the automobile or the home, or on the body, or while you’re on the go.
So we have a lot of advantages that require retailers to work really hard in terms of getting their name out there, using social media, finding who their customers are and being very clever in terms of enticing them to learn and to buy.
CES Asia takes place from May 11th to 13th in Shanghai