There are many good reasons why dealers refer to accessories as their lifeline. The core product—DSLR, smartphone, MP3 player, laptop—lures the customer, but the infinite amount of add-ons drives a retailer’s profit and customer satisfaction.
We recently spoke with accessories vendors and distributors who specialize in trafficking the thousands of SKUs that enhance and support big-ticket items for their comments about the current state of the accessories market and what the future holds.
Picture Business: What were the best-selling accessory categories for you this year?
Tim Coakley, DBL: Photo video accessories have been very strong for us: memory card converters, cases and tripods. Incredibly strong have been PC gaming accessories, especially flight controllers and gaming mice. Bags of all sorts; we’ve been selling everything we can get our hands on, especially Pelican, Case Logic and Wenger SwissGear. And the lower-priced HDMI cables have sold well, including our own brand. We’re also doing well in small appliances. Our customers asked for it, and it’s something that non-traditional CE categories. It’s our fastest-growing segment.
Noel Lee, Monster Cable: We don’t define headphones as accessories, so I’d say high-performance HDMI; sales have gone up for our retailers.
Bill Stewart, Petra: To single out a brand, I’d go with OtterBox, specifically the OtterBox iPhone 3G/3GS Defender cases. Consumers spend substantial cash on their phones, and the Defender series provides virtually indestructible protection for that investment. We expect iPhone 4 accessories to skyrocket in Q4. Flat-panel mounts are also one of our best-selling categories.
Cheryl Severini, Maxell: Headphones have been a particularly strong category this year, with the earbud-type leading the category. MP3 players, iPhone and iPad all add to the strength of the category. Style and color play an important part.
Rob Eby, D&H: The first six months of this year, iPhone and iPad accessories were very hot—particularly for the companies who could get iPad accessories out first. A lot of retailers can take advantage of that because, we, like them, don’t sell Apple, but we are able to capitalize on being able to sell the accessories. Dealers can easily coattail off that. Another big area of success that ties into this is portability, things that go along with the portable lifestyle, like accessories for portable notebooks and netbooks, such as mice and speakers.
Picture Business: What were some big category shifts in accessories in 2010 from 2009?
Michael Paladino, Coby: iPod/iPhone docking stations went up in popularity, gravitating to more stylish-looking products like our new Vitruvian and Butterfly units. People are looking for more streamlined designs. The docks look great in furniture, with curves and LED lighting that dims and highlights the footprint.
Lee: Power products shifted to ‘green’ power. I think consumer awareness of green power is at an all-time high, and increasing every year. Dealers are asking for it, and it’s continuing on the climb for us. We’ve also had an increase in screen cleaner product sales.
Coakley: The biggest shift has been from legacy cables—analog, composite, component and S-Video—over to HDMI. That changed in the back half of 2009, once we got past the digital TV transition. About 92% of our cables biz is now in HDMI.
Stewart: Our Apple accessories continue to drive sales. Other groups doing well include A/V mounts, netbook and laptop accessories, portable audio and headphones. The state appliance rebate programs boosted appliance hookup supply sales.
Severini: The analog formats of blank media continue to decline, while hard drive/flash USB storage devices are growing. Netbook accessories have had a very short lifespan. We see them being replaced with iPad and e-reader accessories.
Eby: The biggest category shift is in the headphone category. It’s taken a turn down. When iPods first came out everyone bought new headphones. It’s not necessary to do that every time you buy a new iPod; the headphones they bought from the first device are every bit as good. However, within the headphone category, those purchases that are made are being made as fashion statements.
Geise: The consolidation of A/V cables is still the biggest shift that we are seeing in accessories. As the consumer adopts HDMI as the cable of choice, we are seeing other cable-types slowly consolidating on the retailer’s sales floor.
Picture Business: Was there a rise in accessory purchases by any specific consumer demographic?
Geise: We are very excited to see an increased impact of the youth market, and the active consumer. Our mobile and portable products have seen a nice lift at retail as a result.
Eby: When you look at the iPod/iPhone category, that’s really a cross-demographic. Dealers are selling accessories for everyone from that teenager to the 50-year-old who’s getting that first iPhone. We have individuals at our company with the iPad who are very different ages, and each went out and bought very different types of accessories for it. The older buyer went with more of a standard look and feel, younger buyer jazzed his up. Both bought cases, but with very different spins on what they wanted. With some of the technologies coming out and the ease of use of those technologies, accessories’ appeal is cross-generational; the desire for functionality is the same – desired look varies.
Lee: The demographic is still predominantly male for our products, which are higher-technology and higher-priced. We are looking to sell more to females. Our Vivienne Tam headphones are just shipping now, and some new channels we’re talking to are fashion channels. They’re just starting to embrace electronics products; that’s one of our major growth areas.
Paladino: Our products, since they’re so reasonably priced, appeal to the younger generation—the teens and tweens—also because of all the different colors. We have a large assortment of headphones and it’s broad enough that we capture an older demographic as well.
Coakley: We’re seeing more do-it-yourself product sales over last year, and a move away from custom installation accessories. That’s somewhat tied to the changes in the housing market. People are buying wireless outdoor speakers, wireless security and observation systems; customers are trying to save money with DIY wireless products that are easy to install.
Severini: In recent years, accessories have had a mass appeal in gender and age. We see blank storage media and headphones skewing just slightly more toward the male demographic, but for the most part, it’s evenly split. When you get down to the design level, though, arbuds vs. full-cup headphones, you’ll see full-cup headphones are much more of a male-dominated category while earbuds, in fashion colors, are more female-driven.
Picture Business: What part does the Web play in accessories sales these days?
Coakley: The web is absolutely driving accessories sales. Customers are shopping online more than ever for them. You can see an unlimited amount of choices and colors, there’s no inventory carrying cost, and you don’t need space. We have the stuff in stock and are able to carry the inventory. There’s no downside risk.
Lee: We work with our retail partners on helping them have a more robust strategy for the web so that when they sell an A/V receiver, for example, on the web, it pulls up the exact cable that’s needed. We’re working on more of that and working on putting our HDMI speed-rating system in place on our dealers’ sites. We’re looking to educate people on speed rating because there is a lot of low-priced cable available online and consumers who don’t understand the differences.
Stewart: The web is a vital tool for accessory sales for our e-commerce dealers. If a dealer strategically merchandises and accessorizes their site properly, they could lock in an accessory sale with every overall purchase. Strategic marketing tactics, such as presenting accessory options on the product and checkout page to remind them to buy that necessary cable or cell phone case, will make a huge difference in the dealer’s attachment rates.
Geise: From our external surveys, we are finding that 75 percent of consumers are using the web for research before making their purchase, and are learning about our new technologies and products before going to buy at retail.
Severini: The web is a great resource for consumers to research products, especially in the accessories category. As a manufacturer, it allows us to showcase unique features and benefits of our product assortment. Web communication allows us to expand the message in a way packaging cannot.
Eby: We see the web making a big difference in the number of accessories sold. We’ve done a really good job with web tool alerts. For our dealers, on the site, we’re able to list notebook computer cases alongside a Toshiba notebook that will fit it or list mice that will work with a particular computer.
Picture Business: What sort of product do dealers want from you? What sorts of help do dealers ask for the most from you?
Lee: We’ll have a big push in iPod docks. It’s been a crowded field with lots of low-priced, low-margin competition. But we’re going high end, and will offer the best-sounding iPod docks as a substitute for a big system, but still have it be smaller. Their performance is going to be game-changing, and we’ll put a lot of emphasis on that.
Stewart: Dealers are always looking for the best price, and we’re seeing a more common trend of our customers wanting to keep tighter inventory levels. When lowering inventory levels, it’s easy to lose money on freight costs by placing multiple smaller orders throughout the month. To combat that, we offer several promotions throughout the year for freight discounts so our dealers can place multiple orders without incurring big hits to their bottom line. We’re always looking for special buy opportunities so we can pass savings to dealers.
Coakley: Dealers are asking for help with the Internet, especially the brick-and-mortar dealers. It’s a force that’s here to stay in accessories selling. A lot of our traditional dealers ask us for help with their Internet strategy, and even some vendors ask for help. DBL is an “enablement” company regarding the Internet. That’s probably the thing we’ve done best over the last year, helped traditional retailers to craft their web strategy.
Eby: Help with SKU selection is what they want. For example, if you look at computer mice or cases the number of vendors we have is very large—there are almost too many vendors and SKUs, so we try to assist them in those categories to enable them to be successful. Our thinking is that for any dealer with a retail store, going with a good-better-best scenario is the smartest approach to take.
Geise: We have focused on helping our retailers with attaching accessory sales to every consumer in their stores. This is particularly important Q4. Seasonal accessory displays and shippers have been key to our support for retailers during the holiday season, when accessory attachment is particularly important.