Interest Keen in 3D, But Recovery ‘Mediocre,’ CEA Economist Says

Citing a weak labor market and an economic recovery that’s “mediocre at best,” DuBravac said consumers tend to spend all of their dollars from government transfers but not all of their money from their own wages. “We're starting to hear about more stimulus being needed because moving to a private sector economy will happen in the third quarter,” he said. “We need to see the private sector pick up with real job growth to support wages. Consumers are still reeling from the downturn because there’s not a lot of wage growth.” Still, technology spending should pick up on the enterprise side as more companies invest in IT and mobile technology while increasing payrolls, he said.

TV sales have gotten a much-needed boost from next-gen technologies such as LED backlighting and 3D TV, said DuBravac. Model resets provided a spark on the TV side in March, he said. While LED-backlit LCD TVs had accounted for only 5 percent of total flat-panel sales to that point, they “shot up to 11 percent” in March, and reached more than 25 percent in April, he said. 3D is also starting to have an impact at retail and is on track to sell 70,000 sets a month for a total of roughly 2.5 million unit sales by year-end, he said. That’s up somewhat from previous CEA sales forecasts. Interest in 3D is heating up at retail, he said, citing a CEA study that polled floor salespeople and found that more consumers are interested in learning about the technology. However, DuBravac said the survey found that many consumers are still confused about 3D and that there’s a need for more consumer education.

CEA recently updated research it did in 2007 and 2008 on consumer perceptions of 3D technology and found that “seeing is believing,” DuBravac said. Those who have experienced 3D first hand have a much higher impression of it whether it’s a theater or a home demo experience, he said. He noted the differences between HD and 3D in terms of consumer perception at their entry points to the market. “The problem with HD was convincing consumers than it was different from SD,” he said. “With 3D they know right off the bat. Now we have to convince them that the 3D they see today is different from that of the 1950s and 70s, that it’s a different and richer experience.” All negative predispositions consumers may have about 3D decline significantly when they see it for themselves, he said.

Black Friday will have an extended run this holiday season, and has become a worldwide phenomenon even in countries such as Switzerland and Brazil where Black Friday didn’t previously exist as a retail institution, DuBravac said. “I wouldn’t be surprised to see retailers outside of the U.S. advertise Black Friday deals,” he said, citing large numbers of worldwide Internet searches for the phrase. “It’s reached such a pivotal point you'll see it spread out."

In the U.S., holiday traffic will continue to be event driven, DuBravac said. Retailers will start in early, pulling sales from Black Friday marketing into early November, and keep them going into December, he said. Cyber Monday is expected to expand this year into Cyber Week, he said. Bundling will be a big story for the holiday, especially in 3D, where an entire ecosystem is needed for the complete experience, and in gaming, which has reached the back end of product cycles, he said. Accessories and software will be the gaming drivers, he said. Retailers will use gaming bundles to propel console sales and broaden the base.