Sophisticated boom boxes gain as use for home audio grows

Discount Store News, Jan 7, 1985

Retailers are focusing on more sophisticated portable stereos, or boom boxes, as they adjust their merchandising to reflect consumers' growing use of these items as small-size home audio units.

The change in focus is taking place as sales of portable am/fm stereo cassette player/recorders have leveled off from the rapid growth of the past two years.

Discounters, catalogers and specialty retailers aren't greatly expanding their assortments as they play up units with features that previously were found on larger, more traditional home stereo cassette player/recorders.

In the new merchandising effort, portable stereos with detachable speakers (component systems), cassette players with auto reverse, dual cassettes and minisized units are expected to take center stage this year.

Retailers also expect price points in portable stereos to drop as the newer models become commonplace in the market, encouraging additional sales. Many buyers report their best unit sales are still in promotional and under-$100 items.

Although Al Jenkins, a buyer for cataloger Dahlkemper, believes sales of portable stereos will level off this year, the 1984-85 catalog features three additional sku's. He expects sales to pick up in units with detachable speakers--at least five of the models carried in the showrooms have that feature.

A Closer Look

Jenkins said consumers also want models that appear more sophisticated. "Black matte finish has caught on really well because it's a high-tech look," he said. "A few years ago high-end components were black."

However, while sales are good in portable stereos with dual cassettes, they do not live up to the hype these items received at the previous two Consumer Electronics Shows, he said.

John Kendig, merchandiser for cataloger W. Bell, said this year sales should be split more evenly among standard-sized, minisized and component portable stereos. "It used to be the standard size was popular, then the mini was in," he said, adding that standard-sized portable stereos will still account for about 40% of unit sales.

The firm devotes two pages in its 1985 catalog to portable stereos, offering brands like G.E., Panasonic, Aiwa, Toshiba and Sony. Prices range from $62.50 for a Panasonic am/fm stereo cassette with auto stop to $397.50 for a G.E. portable component system with 5-band graphic equalizer, Dolby B noise reduction system, dual LED electronic meters and six speakers.

Specialty chains have been playing up their multifeatured units in ads. In a recent ad, Pacific Stereo promoted a group of four feature-packed portable stereos: a Sony model with auto music search for $68.95, a Unitech model with detachable speakers for $79, a Sanyo unit with 5-band graphic equalizer for $149 and a $249 JVC portable component system with auto reverse recording and playback and music scan.

Discounters are also chasing sales of multifeature items, although their ceiling prices rarely reach $200. Heck's stocks about 15 portable stereos from brands like Emerson, Grand Prix and Sanyo ranging in price from $39 to $129. Buyer John Branham explained the assortment is categorized as good, better and best.

"We promote the good and then hope for the trade-up," he said. He added that dual cassettes in the portable units have attracted a lot of attention.

One Midwest chain will add models with four speakers and tape counters this year, and will lower price points on current models. Prices for the 15 models stocked by the chain range between $49 and $149. The chain plans to carry at least six sku's with dual cassettes as opposed to last year's two sku's with that feature.

However, despite the introduction of high-end, feature-packed portable stereos, many discounters are finding their best sellers are multifeature units for under $100.

At ALCO, a Soundesign unit priced at $88 has experienced 15% higher sales than any of the other six or seven models stocked, said buyer Richard Millner. Prices at the chain range between $59 and $179.

At Gee Bee, the highest turns are generated from the promotional Gold Star line as opposed to Panasonic and G.E. lines, said buyer Joe Allendorfer. The category yields margins of 20% to 25%.

At least one specialty chain, Luskin's, is also finding most of its business in promotional units. The portable stereo category at the Maryland-based chain has increased by 15% to 20%, a reflection of its gain in market share, said audio buyer Mike Hamerling.

The chain stocks 26 sku's in the category, on par with last year, ranging in price from $49 to $199. However, Hamerling said his best unit sellers are in promotional units by Panasonic and Toshiba in the $49-$59 range.