Stat Sheet

‘Super’ buyers 80% of electronics sales - May 28, 2008

Both the “buys” and the “buy-nots” may be buying less this year.

Most of the consumer-electronics spending is concentrated among consumers who can either better afford the latest gadgets or insist on buying them as a lifestyle choice, according to a survey released last week. Still, even the most aggressive gadget collector might slow down spending in light of economic concerns.

The highest-spending 25% of U.S. households accounted for 80% of consumer electronics spending for the year ended March 31, according to a Parks Associates survey. Such consumers spent at least $2,000 on consumer electronics during the 12-month period, while the real heavy hitters—those who spent more than $5,000—made up 42% of all sales, reported Parks, citing a survey of 2,500 broadband households.

While the biggest spenders tended to be wealthier, there were many less-affluent people among the so-called “super buying” segment. In all, the biggest spenders were demographically little different from the rest of the households, Parks Associates director of research John Barrett said, adding that the broadband survey made the pool wealthier and better-educated than the average U.S. consumer.

“It’s not just the wealthy people who are doing all of the buying,” said Barrett. “It’s people who feel consumer electronics allow them to live a certain lifestyle.”

Best Buy and other electronics-specific retailers benefit from “super” buyers, who are likely to do more online research for products while avoiding general-merchandise stores such as Wal-Mart and Sam’s Club, Barrett said.

Still, lifestyle may take a back seat to the credit crisis, rising gas prices and other factors that could contribute to the U.S. economic slowdown. Worldwide electronics hardware spending will grow 7.6% to $516 billion this year, slowing from a 15% growth rate in 2007, according to a separate survey by U.K. research firm Understanding & Solutions.

The hardest-hit items will be the most expensive, said Parks’ Barrett, noting that purchases of flat-panel TVs and high-definition DVD players are likely to fall.

Last week, NPD Group unit DisplaySearch said worldwide TV sales in the first quarter were flat, down from the 5% year-over-year increase in the fourth quarter, as a jump in flat-screen demand was nearly equaled by the drop in sales of cathode-ray tube and rear-projection TVs.

Meanwhile, in February, the same month that the Sony-led Blu-ray Disc format won the high-def player war against Toshiba’s competing HD DVD, Blu-ray set-top player sales dropped 40% from January, as few standard DVD player owners chose to upgrade, according to the NPD Group’s Retail Tracking Service.

“Some of the bigger-ticket items people seem to be delaying because of the economy,” said Park's Barrett. “Things like iPods were items that didn’t see such a change.” -- Danny King

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