Hazards hit high street

Consumer electronics retailers told to embrace online retailing or face ‘extinction’

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By  Administrator Published  December 31, 2006

High street consumer electronics retailers are facing extinction in European markets as consumers increasingly turn to online ‘superstores’ for discounted big-ticket items, a leading industry analyst has claimed.

Friedrich Fleischmann, division manager of GfK Retail Services International, claimed that since 1998, more than 17,800 European electrical retailers had been forced to close, mainly because as a result of the entry of around of 1,000 online traders catering to the continent’s consumers.

Speaking at the recent Consumer Electronics Conference staged by GfK Retail and Technology in Nuremberg, Germany, Fleischmann cited GfK research that found 17% of all camcorders, 15% of receivers and 10% of fl at screen TVs sold in Europe in 2006 were purchased online.

He added that online retailers often managed to undercut their high street rivals by up to 15% in terms of pricing on certain items.

JŸrgen Boyny, divisional manager of GfK Marketing Services, claimed that in Germany, France and the UK, online purchases contributed the bulk of MP3 player, camcorder and flat screen TV sales in each country.

He claimed online buyers preferred top quality products “with the latest technical refinements, but at attractive prices”.

“These results contradict the long-cherished opinion that products sold over the Internet are primarily cheap goods,” he said. “In fact, online shops offer a relatively small range of branded products for which there is a high demand, which they market very effectively.

Electrical supermarkets counter this by offering as wide a range as possible, whereas the typical specialist shop distinguishes itself by carrying a specialised range only.”

Michael Sauter, consultant to GfK Retail Services International, presented the findings of a GfK report focusing on the German consumer electronics retail sector.

He claimed 83% of German retailers already boasted an internet presence, with 42% of them offering online shopping facilities. He explained that these retailers were anticipating their online sales to treble in the next three years.

He noted that the majority of these retailers had failed to develop suitable strategies for dealing with consumer enquiries regarding the price discrepancy between goods sold online and via high street outlets.

Werner Winkler, managing director of GfK Marketing Services, stressed that the relentless trend towards more and more online purchasing was now unstoppable.

“The best solution would be to welcome this development and participate proactively,” he said.

“The Internet is the extended shop shelf and the display window of the trade and it never closes. Most online shoppers first obtain information about the products they are interested in from shops. This is the perfect opportunity for retailers to put across the advantages of buying from a shop. Comprehensive sales training is more important now than ever before.

“Reliability consumers can trust in is the essential key to successful Internet marketing.”

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