Consumers are looking for style and function when it comes to accessories for their high-tech gadgets. Grocers can succeed with the proper product mix.
By Nora Caley
As the consumer electronics market grows, so does the market for headphones, chargers, cases and other accessories. Industry experts say grocery retailers can benefit from consumers’ desire to have more than one accessory for their smart phones, MP3 players and other high-tech gadgets. Shoppers will buy these items as impulse purchases if grocers offer a good selection and the right-price points.
Sam Mizrahi, executive vice president of Mizco International Inc., based in Avenel, N.J., says the state of the electronics accessories category in the grocery channel is actually growing. “A lot of grocery retailers are realizing they can sell consumer electronics, where in the past they shied away from it because it was too specialized,” he says. “Chargers and headphones are now considered simple items and they are not considered expensive anymore.” Mizco offers mobile phone accessories, power supply products and travel-related products through its brands Cellular Innovations, DIGIPOWER and iEssentials.
Mizrahi says consumers already know what these accessories are, how to use them and which ones work with their specific tech toys. He says supermarket shoppers do not need in-store experts to explain the products and some find it preferable not to have a salesperson following them.
“The nature of grocery stores is people come in to replenish their consumables,” Mizrahi says, adding that those consumables now include a memory card for their digital cameras, a new case for their cell phones and, in some supermarkets, a new cell phone. “They have to be priced at an impulse price. It’s different for different retailers, but it’s getting higher. I am seeing some things selling in grocery for $49.”
In a flash
Cheryl Severini, senior marketing manager at Maxell Corporation of America, based in Woodland Park, N.J., says the company has seen growth in electronics accessories in the grocery channel, particularly in headphones and USB flash drives.
“Headphones are showing growth in most channels and we see this trend continuing,” Severini says. “Smart phones, iPhones and MP3 players have added to the demand for headphones, with earbuds taking the lead with more than 80% of the market in the $19.99 and below price point range.” Also, she says, USB flash drives have shown significant growth in the past few years.
Mizrahi maintains that although overall consumer spending was down during the recession, spending as a share of that shrinking wallet was up. Research firms such as New York-based The Nielsen Co. and Chicago-based SymphonyIRI Group, do not track many consumer electronics segments in the grocery channel, so information is sparse about sales of headphones, memory cards and cell phone cases in food stores.
However, Nielsen reports that for the 52 weeks ended Oct. 30, in U.S. food stores with sales of more than $2 million (excluding supercenters), total sales of computer/electronic products were $451.5 million, down 6.2% compared to the same period the year before. The category includes blank CDs and DVDs, computer floppy disks and cleaning products for electronics.
For food/drug/mass including Walmart, for the 52 weeks ended Oct. 30, sales of computer/electronic products totaled nearly $7.3 billion, a decrease of more than 14% compared to the same period the previous year.
Despite the scarcity of data, Mizrahi says consumers do buy electronics accessories in grocery. Stores can increase sales if they offer some of the more interesting products and expand the section. Fashion-oriented items, such as headphones and cases in different colors and styles, do well among women and also teens shopping with their mothers.
He notes that supermarkets attract a different type of shopper from the consumers who shop at electronics retail stores. “I don’t think the hipsters are going to buy electronics in supermarkets,” he says. The target demographic for Mizco’s accessories is adults age 25 to 54, mostly female.
Apples, the electronic kind
Other experts agree that the supermarkets can attract female shoppers of electronics accessories. Belkin International, Inc., based in Playa Vista, Calif., offers accessories for the iPod, iPhone, netbooks and laptops.
Jamie Elgie, director of product management, mobile computing, says the traditional grocery channel is not a big channel for Belkin at this time. However, Elgie says, “We are finding that big retailers with grocery departments have been successfully focusing on female-leaning electronics accessories that talk to a ‘chic’ versus ‘geek’ use of products. This has enabled them to do well with their predominantly female demographic.”
Shawn Dubravac, chief economist and director of research for the Arlington, Va.-based Consumer Electronics Association, says tablets such as the iPad will fuel growth of electronics accessories sales in the near future.
“Without doubt 2011 will be the year of the tablet,” Dubravac writes in CES Trends To Watch. The report notes that more than 80 tablets have been announced and many will debut at the association’s Consumer Electronics Show in Las Vegas, to be held Jan. 6 to 9. “Significant growth for a nascent category will also propel adjacent, but not to be overlooked markets like accessories. Expect to see the 2011 CES explode with not only cases and bags but also a wide selection of items such as Bluetooth-enabled devices specifically targeting the tablet space.”
Mizrahi says many of Mizco’s grocery accounts are asking for iPad accessories. He is also talking to stores about offering more computer accessories for the home, because many households have home offices now. He says stores are adding mouse pads and memory cards to the school supply aisles.
“What sells best are the most popular items, so stick to the basics,” he says. “We don’t recommend grocers to go all out and get technical and carry cutting-edge electronics. Consumers are going to shop at Best Buy for that.”
Do not forget the flash drives, says Severini, from Maxell. “Flash drives are on every student’s back-to-school list and should be included in every grocery planogram.” The company expects to see growth in the 4GB and 8GB capacities for 2011. Also, she says, “We can expect to see more with color and style.”