IBM Forecasts Bump in U.S. Retail Electronics and Appliance Sales

Analytics-based models look at both seasonal peaks and long-term trends

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Aug 11, 2010, 03:14 ET

ARMONK, N.Y., Aug. 11 /PRNewswire-FirstCall/ -- Retailers of electronics and appliances in the U.S. are expected to grow sales of those products by $739 million in September and October, according to an analytics-based forecast produced by IBM (NYSE: IBM). The forecast represents a five percent increase compared with the same period last year.

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Produced using sophisticated algorithms and 18-years of historical data, 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.

Here's the month-to-month breakdown of the September/October forecast (numbers in millions):

	September	October	2-month total
2008 (actual)	$8,188	$7,949	$16,137
2009 (actual)	$7,559	$7,506	$15,065
2010 (forecast)	$7,942	$7,862	$15,804

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.

For more information, visit www.ibm.com/gbs/bao.