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Most television, radio, VCR, and DVD player purchases are made today to replace or upgrade existing equipment. New flat screen and plasma TVs and DVD players represent the latest technological innovations drawing shoppers into the stores for new entertainment equipment. Nearly all (99 percent) of U.S. households own a color television, while 71 percent own two or more TVs. VCR and DVD player ownership is almost as high, with about 90 percent of households having a VCR or DVD player.

Today the digital DVD is being used more as a video recording medium, thus encouraging consumers to upgrade their older VCR player for the latest and greatest digital DVD player. With a purchase incidence of 38 percent in 2000, purchase incidence of TVs, radios, VCRs, and DVD players rose in 2001 to 46 percent of households only to drop back down to 38 percent of households in 2003.

With consumer purchases of $26.5 billion in 2002, the market for televisions and other video equipment is robust. Like computers and audio equipment, upgrades in technology, such as today’s large-sized plasma screen televisions that are so flat they can be mounted on the wall like a painting, tend to drive consumers into the stores to upgrade their old TV sets with newer models. For consumers, it is all about enhancing the television experience and today shoppers can find an enormously wide range of viewing options that improve upon the traditional 21-inch color console set.

With nearly equal purchase incidence, shoppers are as likely to shop for new TVs and other entertainment players in discount department stores as in specialty electronics and appliance stores. Some 52 percent of shoppers made purchases for these products in a discount department store, while 51 percent bought at electronics and appliance stores.

Traditional department stores have a small, but meaningful, share of shoppers in this category of goods, with some 14 percent buying entertainment players in these stores. Shoppers want to see in person the player media they buy, so only 7 percent of shoppers make purchases of this class of goods through nonstore channels such as Internet, mail order, or television shopping.

Product cycle is the key to successful electronic appliance retailing, including televisions. The product cycle includes the pattern of new consumer electronic introductions and the rate at which they gain consumer acceptance. Without new products to promote, retailers can only sell replacement items to their customers, which is not enough to sustain growth, especially because the price of consumer electronic products continue to fall after their initial introduction. A new electronic product, like the plasma screen televisions, sell at a premium and tend to draw shoppers into the stores to see what all the fuss is about.

Today, analysts see the product cycle as very strong with the potential of wireless technology, HDTV, and plasma televisions just beginning to climb on the typical consumer’s radar. “The product cycle should remain strong for the next three to five years,” says analyst Ken Gassman of Davenport & Company. “There are brand new technologies hitting the stores that everyone has to have, like with the VCR revolution of the 1980s.”

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