Rebecca Day

Talk among consumer electronics and tech executives about strategies for launching the first virtual CEDIA Expo Sept. 15-17 (see Ref:2007090070]), instead of the physical one previously planned for Denver, highlight event challenges faced in the COVID-19. Last week, we interviewed about a dozen such representatives.

Target will require customers to wear masks or face coverings beginning Aug. 1, it said Thursday. The new policy is in keeping with "guidance" from the Centers for Disease Control and Prevention "on the role masks play in preventing the spread of the coronavirus," emailed a spokesperson. Target will exempt young children and customers with underlying medical conditions. This "builds on the more than 80% of our stores that already require guests to wear face coverings due to local and state regulations," said the spokesperson. Store employees already wear store-provided masks. Target will provide disposable masks at store entrances. It will add signage and overhead audio messages and station team members at entrances to remind customers to wear masks. The retailer will steer shoppers to its "no-contact fulfillment options, including Drive Up, Target.com and Shipt, if they’d prefer," she said. Walmart and Best Buy announced customer such requirements this week (see report, July 16).

Retailers are cracking down on the maskless. Walmart shoppers will be required to wear masks beginning Monday, it said Wednesday, citing the spike in confirmed COVID-19 cases. About 65% of Walmart’s 5,000-plus stores and clubs are in areas that have such government mandates, blogged Dacona Smith, chief operating officer-Walmart U.S., and Lance de la Rosa, COO-Sam’s Club. Citing states and municipalities with mask mandates that “virtually everyone” complies with, they anticipate the same to happen in other parts of the country. The company didn’t respond to questions. The National Retail Federation hopes it's a “tipping point” in the debate over masks. NRF encouraged all retailers to adopt such a nationwide policy. It highlighted Starbucks, Best Buy, BJ’s Wholesale Club, Apple, Qurate and Costco requirements. The association co-signed a July 2 letter with the U.S. Chamber of Commerce, Business Roundtable and other industry groups to President Donald Trump, Vice President Mike Pence and governors, advocating that a national mask standard be implemented locally. As Best Buy was gearing up for a reopening after shelter-in-place last month, it said staffers would be required to wear face masks and it was asking customers to wear them, too. It upgraded that position Wednesday, joining other retailers requiring customers to wear face coverings in its stores.

COVID-19 cut Voxx sales in fiscal Q1 ended May 31, said CEO Pat Lavelle on an investor call Monday. The results came at 5:30 p.m. EDT Friday. Monday, the stock closed down 6.6% at $5.28. Revenue in the automotive segment declined $12.4 million from Q1 a year earlier, said Lavelle. Consumer electronics sales were down $9.1 million, he said. Voxx reported its net loss nearly tripled to $9.1 million. The closure of virtually all automotive OEM production idled Voxx factories in Orlando that make rear-seat entertainment systems, said Lavelle. The shutdown of most new car dealers doubly hurt, he said. “April was reported to be the worst month for car sales in over 30 years.” Retail lockdowns harmed the Voxx consumer business, and the shutdown of movie theaters halted sales of Klipsch commercial speakers targeted to “large venues,” said Lavelle. “The only bright spot was some of the large brick-and-mortar retailers that sold food and remained open” as essential businesses, he said. “We saw increases at retailers such as Walmart, Costco and others.” Voxx e-commerce sales activity “picked up as well,” he said. “But this was mostly offset by Amazon focusing on essentials for a large part of the quarter.” The pandemic’s economic impact is “far from over, but we remain cautiously optimistic” about the rest of calendar 2020, said Lavelle. In June, the first month of Voxx’s fiscal Q2, “we saw a rebound, with sales up 30%,” he said. The company bought Directed Electronics' automotive aftermarket business this month (see 2007060044).

“Watch Google,” said a Friday streaming TV analyst note to investors from LightShed on the war for the living room among MVPDs, platform providers and media companies. Google could be a “much needed disrupter” in the connected TV world, reducing leverage Roku and Amazon currently hold, wrote Richard Greenfield and colleagues. Amazon “has underwhelmed” with Fire TV as a TV operating system, and Apple doesn’t want to be a TV OS on third-party TVs, said analysts, leaving “all eyes” on Google to take on category leader Roku. Unlike Roku, whose devices and platform were “purpose built for streaming video,” Google doesn’t need to make money, “at least today,” from connected TV ad inventory or sharing in new subscription VOD services, analysts said. Google’s interest is in gaining data on user behavior, capturing more of consumer’s time, boosting usage of its ad-supported YouTube app and growing its YouTube TV, Stadia and Nest Aware apps, they said. Google didn't comment. Analysts cited increased tension between platforms and programmers/apps that first became evident in January with a battle between Fox and Roku before the Super Bowl. Now, TurnerMedia’s HBO Max, which launched late May, doesn't have an agreement with Roku; NBCUniversal’s Peacock, rolling out broadly on Wednesday, reportedly doesn't have an agreement with Fire TV or Roku, either, they said. Those companies also didn’t comment.

Online “booth fees” for 2020 CEDIA Expo Virtual are $750-$7,500, said an Emerald X presentation for prospective exhibitors. Companies have a choice to opt out of the virtual show and get a refund over the next 30-60 days for registration fees they paid for the physical 2020 show. COVID-19 forced the cancellation of the physical show in Denver. Companies also can have a portion of their 2020 funds applied to the mid-September virtual show and the remainder toward the next scheduled physical show, Sept. 1-3, 2021, in Indianapolis, Eric Bodley, CEO of Future Ready Solutions, told us Thursday, calling the options "fair." Show owner Emerald canceled the in-person event due to COVID-19 (see 2005280029). CEDIA Expo 2020 was scheduled for Denver Sept. 8-12; its virtual counterpart is Sept. 15-17.

Hype about Friday's Disney+ release of Hamilton, with theaters closed during COVID-19 lockdowns, showed consumers’ appetite for viewing theatrical content in a streaming format. In May, Disney Chairman Robert Iger tweeted the decision to bring Hamilton to Disney+, 15 months before planned theatrical release.

Capital Audiofest 2020 will roll over to 2021, Director Gary Gill told us Monday. The consumer high-end audio show reached agreement with the Hilton Washington, D.C./Rockville Hotel & Executive Meeting Center in Maryland “to move the show from 2020 to 2021 without any issues,” said Gill. The 2021 show is scheduled for Nov. 5-7. Last year's show drew about 3,000 attendees; this year's event was to be Oct. 30-Nov. 1. Though Gill didn’t want to cancel, “it’s the direction the industry was going,” he said, referencing other cancellations. “I didn’t want to put people at risk. At a trade show, people sit shoulder to shoulder in small listening rooms.” Virtual vendor additions could be part of the 2021 program, Gill said.

E-commerce experts say COVID-19 boosts e-commerce, often for the big players (see 2007010054). The winners are well-known retail brands Amazon, Target and Walmart that gained new customers who didn’t shop online before the pandemic or had limited experience, said Kaitlyn Glancy, Flexport general manager-Northeast. “The big names are continuing to get bigger.” Electronics are a beneficiary of pandemic stay-at-home trends, said Glancy, citing spending on TVs and gaming devices. Consumers are also upgrading, she said on her freight transportation company's webcast Wednesday. Consumers are responding to “click and collect” options, where they can choose to have products delivered or picked up in store, said Glancy: Some 87% hope, and expect, the model to exist beyond the pandemic.

Warehouse staffing, consumer expectations for delivery and the Trade Act Section 301 tariffs on Chinese goods are among challenges Sonos is juggling as the company ratchets up e-commerce amid the novel coronavirus, said John Hills, senior manager-logistics, America. Hills told a webinar hosted by freight logistics company Flexport that during the pandemic, which slammed brick-and-mortar sales worldwide, Sonos is “not only dealing with the impact of COVID, we’re still navigating some of the waters with these 301 tariffs” imposed last year by the Trump administration on goods imported from China. Higher tariffs led Sonos to steer production of most U.S.-bound goods to Malaysia. Sonos CEO Patrick Spence highlighted a spike in direct-to-consumer sales (D2C) in April when consumers turned to e-commerce to buy goods they couldn’t get when stores temporarily closed. More people are required to move 1,500 units in a D2C model vs. a “handful” of pallets destined for one retailer, Hills said Wednesday. Forecasting D2C sales fluctuations can be unpredictable, said the executive: “It’s much more challenging to capture spikes in demand for D2C than it is for B2B.” An online article or blog can drive a surge, or a successful promotion can produce an unexpected order spike, he said. Sonos is also competing with big box retailers that have bigger warehouse staffing needs due to the pandemic-fueled jump in e-commerce business. FedEx also is getting more e-commerce consumer interest (see 2007010052).