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Surging 4K Demand Helped TVs Remain King on Black Friday

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LG-4K-TV-225x136.jpgAs expected, TVs remained the most in-demand consumer electronics product on Black Friday (and Thanksgiving, at those stores that opted to again open their doors on Turkey Day and throw a monkey wrench into Americans' face-stuffing and football-viewing plans). This year, however, 4K TVs helped to increase that TV demand, driven by prices that significantly fell from only a year earlier and the fact that an increased percentage of Ultra HD TV models were featured in retail ad circulars for the key holiday shopping weekend.

TVs were likely "number one, two, three, four, five" among the top-selling CE products for the holiday weekend, said NPD Group analyst Stephen Baker in a recent phone interview. He estimated that TVs would "dominate the sales volumes" for CE retailers when final sales were tallied, and he said that they "clearly dominated the advertising and the focus from every retailer and every TV brand this year."

Agreeing with him, Shawn DuBravac, the chief economist at the Consumer Technology Association (CTA), said, "We saw televisions do very well" over the holiday weekend in the U.S. "They were kind of the leader" among technology product sales, he explained on a conference call with reporters, when I asked him what the top-selling tech product was.

DuBravac added that U.S. TV sales were up close to one percent in units for the year, as of the day of the call. He projected that the TV category as a whole would end the year either flat or slightly up compared with 2015. However, 4K TV unit sales were up about 40 percent in the U.S. from 2015, "so that's where all the growth was," he explained.

Pricing played a key role once again in the popularity of TVs over the holiday weekend, Baker said, telling us that it "got to a point where everybody could be very aggressive" with TVs, including large-screen and 4K models. "I think every retailer who's in the TV business saw opportunities to leverage that, and they clearly all did with some very aggressive promotion."

For example, Black Friday doorbusters promoted on the front page of Best Buy's ad circular included a Samsung 55-inch 4K TV at only $479.99 ($320 less than its normal price), a Toshiba 49-inch 4K TV at only $199.99 ($250 less than usual), and an LG 60-inch 4K TV at only $599.99 ($400 less than usual). Of course, even the regular prices on those models were substantially lower than the price of similar models a year ago.

Walmart, meanwhile, touted an exclusive Philips 55-inch 4K TV on the front page of its Thanksgiving/Black Friday ad circular at only $298 (not listing its normal price, only calling it a "special buy"). That was one of the TVs that I saw being purchased by a customer at Walmart's East Meadow, New York, store early on Black Friday.

Similarly, Target advertised a Hisense 50-inch 4K TV at only $249.99 (a "special purchase" available only "while quantities last") in its Thanksgiving/Black Friday circular.

Even Kohl's, a store not closely associated with CE, was a bit more aggressive than usual with its Black Friday TV promotions. It advertised a doorbuster Haier 49-inch 4K TV at only $249.99 (regularly $349.99) on the front page of its circular. On the second page of its circular was another 4K TV doorbuster, a 55-inch LG model at $499.99 (regularly $749.99).

Regarding the significantly increased presence of 4K this Black Friday (compared with last year), Baker pointed out: "Last Black Friday really wasn't about 4K. There were a couple of SKUs. This year, pretty much everything with the exception of a few really crazy things was 4K." DuBravac also pointed to increased Black Friday 4K TV promotions, saying: "There really was kind of a price point for everyone and a feature set for everyone."

What was the most heavily promoted screen size this year? Said Baker, "Up to $350 or so, we definitely saw a lot more 40-inch and certainly 50- and 55-inch [models] at really aggressive prices for 4K." He predicted that's "going to move the needle this year substantially in terms of volume and in terms of adoption for the technology."

The most popular screen sizes at the many CE retail stores that Baker visited in the Northern Virginia area from Thursday to Saturday of the holiday weekend seemed to be 40 and 55 inches, he said. In recent years, the most popular size seemed to be 32 inches, he told us, adding that "wasn't really a focus" in the promotions this time. One major reason could have been the fact that 32-inch models had been aggressively priced in the first 10 to 11 months of 2016, he added. As a result, many of the consumers who wanted a 32-inch TV may have already bought one before the holiday weekend.

Of course, the dominant display technology was yet again LED-backlit LCD. Anybody hoping to see more of a Black Friday promotional presence for OLED TVs was likely disappointed. But, with LG as the only major proponent of that TV technology in the U.S. right now, there was no realistic reason for anybody to expect more of an OLED presence this holiday season.

LG has been running some OLED TV promotions throughout 2016, but it didn't seem to be any more substantial during the holiday than it has been in recent months, Baker said. Despite some heavy discounting of late, the pricing on LG OLED TVs was still "significantly over $1,000, and that's never going to be a wildly successful Thanksgiving weekend kind of product at those kind of price points," he said.

Based on what Baker saw at the CE retail stores he visited over the holiday weekend, there seemed to be fewer consumers wheeling around TVs in their shopping carts. That's a potential positive for shoppers like me who have had shopping carts rammed into the backs of their feet while visiting stores (namely while risking one's life at Walmart) on Black Friday. After all, it's much easier to see where one is going when a humongous TV box is not blocking the view. Baker chalked up this decline, at least in part, to substantially improved management of the TV buying experience at some of the retail stores on the holiday. For one thing, stores have started to increasingly rely on using tickets for consumers to claim large-screen TVs as the size of in-demand TVs has increased. He added, "Stores are getting smaller. There's just not enough room to be piling up 55-inch TVs everywhere and expect that consumers are going to be able to move around the store with any kind of ease or comfort."

Perhaps as a result of the increased retail floor space, there also seemed to be more in-store signage to remind people that, if they're buying a flat-panel TV, they might also want to buy a soundbar to improve the sound or a mount to hang the TV on a wall, Baker said. "I saw a lot of soundbars going out the door" at retail stores, including Walmart--especially VIZIO products," he told us, adding that he also saw a lot of consumers buying mounts.

Despite the increased promotional activity around UHD TVs, there didn't seem to be a whole lot of action around UHD Blu-ray hardware or software on Thanksgiving and Black Friday, either in promotions or sales. The possible exception was Microsoft's Xbox One S, which features UHD Blu-ray support. It's debatable how many consumers are intentionally buying that video-game console for the UHD Blu-ray playback or how many of them even know or care that it supports the new video format.

UHD Blu-ray is "still a very nascent technology," DuBravac said, adding: "This is the first year where we saw the studios supporting it, so it's still pretty new. I don't recall seeing heavy promotion in that area." Blu-ray and DVD players in general "did show up in our top 10 list of products purchased over the week" of Thanksgiving and Black Friday, but they were lower down on the list.

Once again, the heaviest discounting of movies and TV shows on optical discs was centered on DVDs and lower-priced Blu-ray titles, Baker noted. Thirty-dollar movies on UHD Blu-ray don't represent the sort of offer that would get many consumers rushing to any stores on Black Friday.

Among the other popular CE items on Thanksgiving and Black Friday were smart home devices and drones, as well as headphones and Bluetooth speakers, Baker said. "We also saw computers and tablets do very well," DuBravac said, adding "there were clearly promotions around those" items.

Amazon-Echo.jpgDuBravac went on: "We also saw some of the emerging categories do well. Wearables started to pop, and there was some activity in drones. Virtual reality. All of those are obviously coming off of low bases and are pretty new. This was the first holiday season/the first Black Friday period where we saw some of those products promoted as a Black Friday offer." That was certainly the case with virtual reality, as well as Amazon Alexa devices and Google Home that he said seemed to perform well. Of the latter two, he said: "Those voice-activated digital assistants are an area that has grown significantly" since their launches.

Best Buy underscored DuBravac's take on the presence of emerging tech product categories over the holiday weekend. Kevin Newlands, general manager of the Columbus Circle Best Buy store in New York City, said, "We had offers on emerging technology such as drones and smart home devices, many of which were on our Top Tech 20 list of the year's must-have tech." Best Buy, however, declined to say what the best-selling products were for the holiday weekend.

The most popular products for the Nashville-based retailer Electronic Express over the Thanksgiving/Black Friday weekend were TVs and PCs, Simon Sedek, its senior buyer, told me by email. The best-selling TVs included a Samsung 65-inch 4K TV at $699, he said, adding that the pricing of 4K TVs that his company's stores sold over the weekend were about one-third less than what similar models had cost a year earlier. That helped drive unit sales of 4K TVs to be three times greater at the stores than they were a year earlier, he told me.

Apple-iPad-minis.jpgAdobe said the five top-selling electronic products online on Black Friday were Apple iPads, Samsung 4K TVs, the Apple MacBook Air, LG TVs, and the Xbox One. From November first through the 24, Samsung 4K TVs were the best-selling TVs, followed by VIZIO 4K TVs, Adobe said. Its Black Friday report was based on aggregated and anonymous data from 22.6 billion visits to retail websites.

Despite the strong showing of computers, tablets, and emerging tech categories this Black Friday, there's still no reason to believe that TVs won't continue to be the top-selling CE product next year, especially as pricing continues to drop ... and especially if we finally get some broadcast 4K content in the U.S.

Additional Resources
• Visit our Industry Trade News Archive to read similar stories.
The Year in Review ... and a Look Ahead at HomeTheaterReview.com.
Evolve or Die: The Changing Face of the CE Retail Landscape at HomeTheaterReview.com.

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