NPD Group Blog » Where Are The Great Growth Opportunities In 2009?

Where Are The Great Growth Opportunities In 2009?

Friday, April 3rd, 2009
By Stephen Baker, Vice President, Industry Analysis

No doubt 2009, and likely 2010 as well, will prove challenging for technology OEMs and retailers alike. Growth prospects appear limited, with much of the opportunity for the near-term seemingly focused on using falling prices to drive increased unit volume and having the dollars fall where they will. This is a bitter pill for consumer technology to swallow; as an industry reared on growth and excitement and the seemingly never-ending advance of technology, the adjustment to these new realities will be painful.

We have begun to see them already, the collapse of Circuit City and Tweeter, the rapidly slowing market for such consumer staples such as cameras and music players, and the economic pressures along all ends of the supply chain. However, the nature of our business is optimism and in NPD’s presentation “Searching for Growth Opportunities in a Declining Market” at RetailVision Spring 2009 we won’t just focus on the challenges of today and the need to survive short-term, but more importantly, how to position consumer technology products, markets, and retailers to reestablish themselves a growth platform.

Here are a couple of examples to whet our appetites. While doom and gloom has been the mantra of the past few months at least one retailer has been able to buck that trend. Amazon.com had a bang-up holiday, reporting North American electronics and general merchandise sales of $1.7b, up 30 percent from the prior year. In NPD’s consumer tracking service these results made Amazon the number five retailer during the holiday in the U.S. Overall online sales across pureplay and brick and mortar retailers were extraordinarily successful last holiday ushering in a new era of opportunity for the technology business.

A second example is the success of the flash-based camcorder market. The overall camcorder market has languished for years, bedeviled by a heavy reliance on young parents videoing their babies, high relative prices, and most recently a dizzying move through media technologies that roiled the market, dropped prices faster than ever before, and undermined the long-term usefulness of the category. Add to that the unrealized promise of home video editing, which proved too processor intensive for most consumers’ PCs and too challenging for most software packages, and you have a category on the edge of extinction. But social media came and saved the day here and the ease of use, fast upload, low price, personalization of the video camera that products like the Flip Ultra offered, and exploiting the popularity of You Tube and consumer media in general may point the way to a new product paradigm. Certainly Cisco thinks so; they just paid nearly $600 million for Pure Digital, the maker of the Flip.

I hope these examples of products and retailers exploiting the changing opportunities available in technology provide some measure of excitement for sellers and retailers in 2009. Come to NPD’s presentation during RetailVision where we will offer more examples of successful searches for growth opportunities.

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