SCIENCE

February and March are emerging as an important selling season for consumer electronics and appliances, according to an analytics-based study produced by IBM. The findings have significant ramifications for merchants preparing for this retailing period.

The study is based both on recent sales trends as well as a forecast of February and March sales for 2012 and 2013, illustrated by the following chart (numbers in billions of dollars):

Particularly telling is the sales momentum – the change in sales from month to month.

The $292 million increase in sales from January 2011 ($7.776 billion) to February 2011 ($8.068 billion) and the $330 million increase in sales from February 2011 to March 2011 ($8.398 billion) indicate that this period – traditionally a slow one for electronics and appliance sales – is becoming more important. In particular, the $330 million differential is $50 million greater than the average for the past 21 years.

Tracking this momentum is an index representing the percentage increase/decrease in sales over the previous month:

The February 2011 Index was more than double its historical mean (3.76 in 2011 vs. -3.30 average over the past 21 years), indicating a significant shift in momentum for this period.  Going forward the forecast indicates that this trend appears to be continuing in 2012 and 2013.

"The first step is for retailers to understand what is motivating the customers who are buying in this time period," said Michael Haydock, retail analytics leader for IBM Global Business Services. "That understanding will help guide merchants as they make their advertising, staffing and inventory plans."

Demonstrated to be accurate to 99 percent, the IBM forecast relies on 21 years of historical data and sophisticated analytics software developed by IBM to evaluate both long-term trends 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.

According to Haydock, all indications are that personal disposable income continues to rise, while savings as a percent of personal disposable income continue to decline – meaning that people are saving slightly less. These two factors combine to provide a good "tailwind," indicating conditions which may lead to better future sales for the industry.

In producing the forecast, IBM uses economic data gathered by the U.S. Census Bureau. The data is derived from a survey of retail store establishments engaged in electronics and appliances as their major line of business.  These store establishments are a representative sample and are not inclusive of all industry activity in this category. Products include TVs, cell phones, personal computers and tablet computers, radios and stereos, refrigerators, dishwashers, ovens, and other devices.