As TV-viewing habits evolve and as prices have dropped precipitously on sets equipped with 4K technology, Americans are increasingly ponying up for the sets that gobble up the most wall space.
According to data from NPD Group, there has been a 10 percent year-to-date increase in the number of TVs sold that are larger than 50 inches, even as TV unit sales overall have declined 3 percent.
“It was not that long ago that we used to say that anything over 40 inches is large,” said Shawn Dubravac, senior director of research at the Consumer Technology Association. “Today the average screen size is about 47 inches, up from 29 inches not too many years ago.”
Retailers are noticing the change, with Target and Best Buy saying their sales mix is increasingly moving toward larger sets. HHGregg says its fastest-growing sales category is 60 to 65 inches, and Sam’s Club says it is reducing floor space dedicated to small TVs to make more room for the 60- to 65-inch sets the chain says is now the “sweet spot” for their members.
“There is a huge demand right now for really, really big televisions: Pricing is attractive, the features are attractive,” said Stephen Baker, a consumer electronics analyst at NPD.
The interest in going big has grown as it has become easier on the wallet to do so. While prices for televisions are down 5 percent year-over-year, they’re down nearly 19 percent for sets that are 65 to 69 inches, according to the CTA. And large TVs, especially, are increasingly built with 4K, a technology that has more pixels than HD TVs and thus provides sharper picture resolution.
“4K has probably experienced the steepest price decline in the entire history of consumer technology,” Dubravac said.
Sam’s Club, for example, said it was selling a 60-inch 4K TV for $998 around this time last year. Now, that same price is offered on a 65-inch model.
“Many of our members, if they’re not restricted by space, they’re just going to step up” in size, said Alain Nzigamasabo, vice president of electronics at Sam’s Club.
Meanwhile, the chief executive of HHGregg, Dennis May, says 4K has motivated shoppers to go big in a way that some other recent novelties — such as 3D TV — have not.
“We finally got some innovation that the customer cares about,” May said.
That said, selling 4K wasn’t an instantly easy proposition. When the technology debuted, some shoppers had trouble seeing its value because many movies and TV shows still are not available in 4K. So retailers have been on a mission to show shoppers that it’s nevertheless a worthwhile investment.
“If you’re watching a DVD or Blu-Ray, you’re still going to get a better experience on a 4K TV than you would on a full HD television,” said Luke Motschenbacher, vice president of televisions at Best Buy.
Consumers seem to be responding to that message: Industrywide, 4K TVs accounted for 14 percent of TV unit sales and 40 percent of the dollars in the past three months. That is a big leap over the same period last year, when they accounted for just 3 percent of units sold and 13 percent of dollars.
Our TV-buying patterns may also reflect the changing ways we are consuming entertainment. Baker points out that often our solitary content-viewing is no longer happening on a TV.
“The first thing cord-cutting is doing is dissuading people from buying that second television,” Baker said. “You don’t really need a TV in the bedroom if you’re going to watch stuff on your iPad, your phone or your computer.”
So when we do buy TVs, it’s likely with communal viewing in mind, such as for family movie night or a SuperBowl party. And that could be incentive to go big.
Meanwhile, the “second-screening” phenomenon — in which people are simultaneously swiping and tapping on a gadget while watching TV — shows no signs of cooling off. May, the HHGregg chief executive, said he believes that after years of buying the second screens — smartphones and tablets — shoppers are now looking to upgrade the other part of the entertainment experience.
“So you not only see a growth in 4K, curved TVs, you’re also seeing a growth in screen size,” May said.
To be sure, 60-inches and above might overwhelm living rooms of urban dwellers.
“If your room is only 10 feet long, and you get a 75-inch TV, you’re going to feel like you’re at a tanning salon,” Nzigamasabo said.
That could be one reason some chains might still do a healthy business this holiday season in midsize sets. Wal-Mart, for example, said it is seeing sales growth in the 32- to 40-inch category as they are able to offer those sets at a better price.
Retailers have all of these trends in mind as they plan their slate of Black Friday TV deals. At Wal-Mart, Greg Hall, a senior vice president of merchandise focused on entertainment products, says they design their menu of deals for Black Friday for a range of consumer preferences. For an extremely price-conscious consumer, they have a doorbuster deal for a $149 40-inch TV. That set will not necessarily be from a well-known brand and won’t have the most advanced TV technology available. On the other end of the spectrum, Wal-Mart is offering a 55-inch Samsung 4K curved smart TV for $998. That’s not cheap, but Wal-Mart believes it is an unexpectedly good deal for shoppers looking for the latest technology.
“You want to mix in Samsung, the best brand, with some absolute shocking price points,” Hall said. “That’s how you lay it out.”
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