Turbotodd

Ruminations on IT, the digital media, and some golf thrown in for good measure.

Santa Wants An iPad

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Our Business Analytics and Optimization group in IBM Global Business Services have been some busy little beavers, helping clients in the electronics industry prepare for the inevitable holiday sales onslaught.

And according to their most recent prognosis, Santa looks as though he may have to go on a hiring binge this holiday season.

That’s because here in the U.S., retailers of electronics and appliances are expected to grow sales of those products by $739M U.S. in September and October alone.

The forecast represents a five percent increase compared with the same period last year. (See graph below.)

U.S. Retail Electronic and Appliance Sales Forecast

This analysis exemplifies the kind of actionable business insight that IBM’s business analytics specialists are working to produce across a range of industries.

This data was produced using sophisticated algorithms and 18-years of historical data, and the forecast analyzes both long-term trends and seasonal peaks to provide a highly-accurate projection of industry sales.

“The forecast indicates that retailers should consider maintaining inventory levels, especially in the hot categories,” said Global Business Services partner Michael Haydock, IBM’s leader for retail analytics. “They should also make sure that stores are staffed with skilled personnel who can assist customers with complex purchases; and continue to invest in advertising leading up to the holidays.”

The retail electronics and appliance market got off to a slow start in 2010 with combined January and February sales down $846 million, or 5 percent, from the same period in 2009.

March, April and May recovered with an overall revenue increase of $483 million, or 2 percent compared with the 2009 period.  In September and October 2009, sales were down $1.072 billion, or 6.6 percent, compared with the comparable months in 2008.

Haydock noted that disposable income, as reported by the U.S. Commerce Department, is on the rise, as is the household savings rate, perhaps indicating pent-up consumer demand.

The IBM forecast is produced using statistical and analytical software to evaluate both the long-term sales trend and seasonal peaks.

IBM consultants use these predictive techniques to help clients improve performance by addressing complex issues of supply and demand.  These techniques also aid clients in planning product mix and new store locations.

In producing the forecast, IBM uses economic data gathered by the U.S. Census Bureau. The data is derived from a survey of retail establishments engaged in electronics and appliances as their major line of business.

Products include TVs, cell phones, personal computers and tablet computers, radios and stereos, refrigerators, dishwashers, ovens, and other devices.

All of this data includes the thousands of dollars in electronic goods that the Turbomeister spends on each and every year (including this year’s iPad!).

Written by turbotodd

August 12, 2010 at 7:13 pm

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