IBM Forecasts a Merrier Appliance Christmas
Oct 27, 2010
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An analytics-based forecast produced by IBM predicts holiday sales of appliances and consumer electronics in U.S. retail stores to get an early start in 2010. Consumers will spend an a larger-than-usual share in November, the report predicts.

IBM's analytics-based forecast report, said to be proven to be accurate to 99%, relies on 19 years of historical data and analytics software developed by IBM to analyze both long-term trends and seasonal peaks. Consultants in the company 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.

The forecast predicts sales of appliances and consumer electronics to total $10.164 billion in November, representing a 4% increase over November 2009. The report predicts:

• November 2010 appliance sales will total $1.476 billion
• November 2010 consumer electronics sales will total $8.688 billion

December sales of appliances and consumer electronics are predicted to total $13.800 billion, for a 4% increase over December 2009. The forecast:

• December 2010 appliance sales will total $1.603
• December 2010 consumer electronics sales will total $12.197 billion

IBM said the forecast's analysis of the change in sales from month to month, a strong predictor of relative strength, is especially important. In 2010, sales momentum going from October into November is expected to be much stronger than in previous years while momentum from November to December is weaker.

The Momentum Index chart of U.S. Retail Electronics and Appliance Sales illustrates the relative strength of U.S. retail electronics and appliance sales in November and December during the years 2001 to 2010. The trend shows that in recent years, November sales are becoming relatively stronger at the expense of December sales. The bars represent the percentage increase in sales for November and December over the previous month.

"The forecast indicates that retailers should be ready for a robust Black Friday and Cyber Monday," said Global Business Services partner and IBM retail analytics leader Michael Haydock, referring to the Friday and Monday following Thanksgiving. "Retailers that staff up and stock up for November and invest in advertising are likely to have a substantial advantage in the marketplace."

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.

IBM uses economic data gathered from appliance/electronics retailers by the U.S. Census Bureau in the development of its forecast.

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