An Electronic Christmas

I thought I would put up a post about my experiences this holiday season with gift giving and what we are seeing in the marketplace. Most of the retail markets struggled this Christmas and holiday season, resorting to extraordinary measures to get shoppers into the stores and buying their goods. But that wasn't true across the board for all types of products.

Are we seeing a shift in holiday buying and will the current trends continue? I think so, and here's my winners and losers drawing from my own family gathering experiences this Christmas season.

The Winners

  • Big Screen TVs - I made my own trek to several electronics stores during the holidays and it was hard to enter or leave the place without getting run over by someone leaving the store or loading their vehicle up with some big screen item. Think this year was unique? Just wait until next year -- you'll see why in a minute.

  • Nintendo Wii - One retail outlet reported that when Wii's were in stock, they were selling 13 Wii's per second. Oh my. I guess Wii's were the Tickle Me Elmo's of 2007 -- the hottest product you couldn't find.

  • Microsoft XBox 360 - Next to the Wii, the XBox 360 was the hottest gaming system available, and I do mean available. At least you could find XBox 360's. My son got the Elite model this season. Now you can avoid the Microsoft blue screen of death if you pay a little more and upgrade to the Elite (16 fans instead of 12, according to the game console experts in our family.) Seems like Microsoft finally figured out how to monetize system crashes - bravo.

  • Guitar Hero and RockBand - Every Guitar Hero or Rockband display shelf in stores seemed like they were continually occupied. And people lined up just to watch the show. I didn't shop at any of the stores that were open 24x7 but I'd wager someone was their working on their fantasy rock star career all through the night. We started a new tradition at our house; playing Guitar Hero after all the gifts and food were doled out. Well, almost. One family member brought over a Playstation 3 so we could play Guitar Hero but the video cable was bad. I guess we'll just have to strike up the band at next year's Christmas gathering. Or, maybe we'll just play on the XBox next year.

  • iPods, music, DVDs and electronic doodads - We had a very large gathering at our house for Christmas, so their was a broad array of gifts, including iPod Nano's, Sirius satellite radio, synth keyboard, and games, including Crysis for the PC, XBox Simpsons and Assassin's Creed games, Wii Super Mario Galaxy, DVDs and CDs.

  • Gift Cards - If you didn't get a gift card this year, then you probably didn't get any gifts.

  • Amazon - They're the default e-commerce gift store and a great backup option when you couldn't find the gift you were looking for in the stores.

The Losers

  • "Duped" Big Screen TV Buyers in 2008 - Big screens have a high cool factor and will be purchased in droves in 2008, even more so than we saw this year. Why? Not just because they're cool. The FCC has mandated the elimination of broadcast analog TV signals by February 2009, and the switch over to broadcasting the more efficient digital signal. This is a good thing, except for the FUD. But many TV buyers think they have to buy a new "digital capable" TV or they'll be stuck watching analog snow. No one's told them that you just need a digital receiver, cable or satellite box hooked up to your current analog TV and you're fine. But who am I to complain? All those new TV sales will drive down the cost of new flat screen and big screen TVs.

  • Retail clothing and doodads - Some cookware, sweaters and socks were about the only gifts exchanged that didn't have a microprocessor involved somehow at our gift-fest. Not any surprise that the retail stores were struggling this season based on our experiences.

  • Gift Cards - Yes, they are convenient to give but gift cards are a bit impersonal. But gift cards are a double-edged sword for the retail stores. Estimates are that 1 in 5 gift cards aren't redeemed. Nice windfall for the stores. However... and there's always a however... Gift cards don't count against the retail sales numbers reported -- only when shoppers redeem them do they count against the publicly reported numbers. (I heard that interesting tidbit on my Sirius satellite radio during the drive to work this morning.) That's one reason we'll see all of the in-store sales continue right up until the end of 2007, to get shoppers in to use those gift cards and help reduce inventory.

  • Playstation 3 - Dud. I don't know what Sony did to turn the industry leader Playstation 2 into a loser Playstation 3 gaming system, but the drop-like-a-rock fall seems to be complete.

  • CompUSA and those few loyal customers - Good bye, my old friend. CompUSA was in my top 3 "honey, I'm going to look around at the computer store". Say no more, it's soon to get gone completely.

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