Consumer Electronics Stores

The US consumer electronics store industry includes about 24,000 stores with combined annual revenue of about $50 billion. Major companies include Best Buy, GameStop, and RadioShack. The industry is highly concentrated: the 50 largest companies account for 80 percent of sales.

COMPETITIVE LANDSCAPE

Technological innovation and the need to replace or upgrade products drive demand. Profitability for individual companies depends on the ability to generate store traffic and repeat business, as well as effective merchandising. Large companies enjoy economies of scale in purchasing and marketing. Small companies can compete effectively by offering specialized products or superior customer service.

Competitors of consumer electronics stores include discount stores, warehouse clubs, department stores, Internet and mail order retailers, and specialty office and computer retailers.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major product segments include computer equipment, TVs, audio equipment, video equipment, phones, and electronic games. Computer hardware and software account for almost 20 percent of sales; TVs, audio equipment and video equipment each account for about 15 percent. Audio equipment includes stereo components, MP3 players, CD players, car stereos, home theatre audio systems, and accessories. Video equipment includes video recorders, video cameras, videotapes, digital cameras, DVDs, and electronic game devices. Other sources of revenue include installation and repair or maintenance agreements, along with resale of third-party wireless phone, Internet access, or satellite TV or radio service.

Consumer electronics retailers include national and regional chains and independent retailers. Major chains and some regional chains may ...