This year, Christmas sales will be dominated by speciality products such as more affordable tablets and smartphones, digital toys and niche homeware items.
This is according to Mark Wood, GM: general merchandise division buying division at Pick n Pay, who says as newer, more affordable ranges of smart-devices and tablets are developed, a whole new market is gaining access to tech products. He predicts that this is likely to be a major focus of Christmas sales this year.
“Prices for smartphones and tablets have come down dramatically over the last year, with the result that the category has become much more accessible to the mass market. People can now buy a 3G WiFi tablet for under R1 000; where just last year, it was very difficult to offer even a WiFi tablet for under R 1 500,” he says.
Wood points to brands like Hi-sense, which have developed world-class tech products at really affordable prices, and are opening the market even further. “So, while the traditional brands like Apple and Samsung will always remain strong, we are also going to see a move towards these kinds of brands because they are affordable for a whole new set of tech-savvy customers.”
He also anticipates significant demand for highly anticipated tech products such as the iPhone 6 and smart watches which are due to launch in September. “In this case, demand may likely far exceed supply initially as South Africa has to wait for the product to arrive, but Pick n Pay should have these items in store for Christmas,” he says.
When it comes to toys, traditionally a crucial category for the retailer’s Christmas sales, Wood predicts that the digital toys will dominate sales. “Similar to last year, we are expecting sales of traditional toys to be flat this year as children migrate towards digital and technology products such as, the Leap Frog range and other tech-based toys. This category is growing exponentially and we expect the trend to continue at an even faster rate this year,” he says.
Other categories expected to take a back seat this year are the navigation, photographic and gaming products as a result of the convergence into tablet. “The decline in these categories is compounding at faster rate this year and we are definitely phasing these categories out in favour of smart gadgets,” says Wood.
Interestingly, despite a significant decline in music and DVD sales across the industry, Pick n Pay is still showing great growth in DVDs. “This is because we have changed our approach to DVD sales. People still appreciate owning their own collection of DVDs but they want it to be a good deal and we have had excellent success with our value deals on DVDs,” explains Wood.
He says this strategy has been particularly successful in promoting sales of children’s DVDs because parents appreciate being able to control what their children are watching instead of relying on age-appropriate content to be shown on television. “Parents appreciate being able to buy a selection of more reasonably priced DVDs to build up a home-library. We expect this to continue to drive sales over the festive season this year,” says Wood.
“Another very notable trend this year has been the emergence of speciality coffee and related equipment. Due to the excellent gifting component of this category, with possibilities ranging from beans to brewing equipment to specialist machines, we anticipate that it will form a growing part of Christmas sales,” says Wood.
As a result, he says many retailers, including Pick n Pay, are even looking at developing their own private brand of coffee machines and pods. Coffee-related equipment and innovations are becoming quite novel and the category has grown in popularity and has a very strong gifting component this year.
Wood also predicts that niche homeware such as chopping boards, celebrity-branded knives, crockery and baking equipment is likely to feature strongly in Christmas sales this year – given the recent growth in reality and celebrity cooking shows and personalities driving product preferences.
He adds that shopping for Christmas is likely spike around the November month-end, 16 December and the week leading up to Christmas.
