Trailing Best Buy and Wal-Mart, Target Gaining in Electronics Sales

BIGResearch pegs Best Buy and Wal-Mart as the top destinations for consumer electronics, but Target may turn out to be a big beneficiary of Circuit City's demise.

The BIGResearch Consumer Equity Index indicates that Target is making fast gains in consumer electronics. CEI is a BIGResearch measurement quantifying growth in share of customer preference year-over-year, with an index of 100 being flat and an index of 105 representing five percent growth. While Best Buy and Wal-Mart continue to experience growth, with CEIs of 113 and 115 respectively, Target has them both beat with a CEI of 126. Indeed, a couple of the retailers currently out of the top three are doing even better, with Amazon.com posting a CEI of 171 and Costco enjoying a 128. Pam Goodfellow, a senior analyst with the research firm, said Circuit City's exit had created a market void that represents opportunity for retailers such as Amazon, and even Sam's Club, CEI 119.

Competition for former Circuit City customers has become fierce, and retailers are launching a wide and woolly range of efforts to win them over. Best Buy recently working a deal with Chase that allows it to offer Circuit City credit card holders a switch over to its own card. Wal-Mart has added new branded electronics, and Bill Simon, executive vice president and COO of Walmart U.S., said at a Morgan Stanley event this month, that the move helped the retailer gain more sales from households with annual incomes over $65,000. He added that Wal-Mart's consumer electronics sales in stores open for at least a year have been growing at a nine percent rate.

For its part, Target took a deal with Shaun White from the apparel department, where it was launched, to consumer electronics, offering an exclusive edition of the snowboarder's video game that provides additional content including a Target mountain and, in a big attraction for snowboarding youth, Target chalet.

The retailer remains a distant third in terms of consumer preference â€" which BIGResearch determines by asking consumers where they most like to shop for consumer electronics -- to Best Buy and Wal-Mart. Best Buy's consumer preference rating reached 35 percent last month up from 31 percent year over year, while Wal-Mart reached 20 percent from 18 percent. Yet, chalets aside, Target got just about three percent of purchases compared with two percent in March 2008. The next three retailers ranked improved as well with Amazon reaching two percent, Costco, just under two percent, and Sam's Club, one percent.