Maybe $400 heaters and $85,000 TVs will get consumers spending again
It was a confusing week to be a consumer electronics reporter. At the start, I was convinced that no one wants to spend on anything besides an iPad and by the end, I learned that there are people out there buying $85,000 TVs.
On Tuesday, Best Buy’s shares tanked on disappointing earnings. Our headline shouted “tech shoppers turn thrifty,” and explained how nobody will buy a new flat-screen TV once they have bought their first one.
But if U.S. consumers won’t shell out for new flat screens, maybe they will buy high-end fans and heaters. That’s what James Dyson told me on Wednesday at the launch of the inventor’s latest gadget– a heater that costs $400, the Dyson Hot.
Dyson’s privately held UK-based company has 2,700 employees and saw its profit soar 26 percent this year, on the strengh of items like its cordless vacuum cleaner and swanky “air multiplier” fans that lack blades and cost much more than the competition.
Dyson told Reuters that Best Buy, his company’s largest distrubutor in the U.S., would probably rebound when spending comes back. “People will always want to buy technology,” he said.
I realized that consumers this holiday may still want to splurge on items like the Dyson Hot, which have features that are hard to find in other brands. For example, the new heater makes it impossible to burn yourself on it, with ceramic stones inside the device providing the heat, and unlike other space heaters, there’s no burning smell wafting off the device.
The spell of the pricy $400 heater had barely worn off the next day when I strolled into Bang & Olufsen’s Soho showroom. The Bang & Olufsen showroom is to Best Buy what a modern art museum is to a run-down Radio Shack.
Soon, I was handed a diet coke, 3D glasses and seated in front of an $85,000 TV. Yes, $85,000. A salesman told me the 85-inch plasma TV comes with speakers that sell for $23,000, so technically you are getting the TV for only $62,000. What a steal.
Denmark-based Bang & Olufsen did not reveal how many of these had sold in the U.S. but their new CEO, Tue Mantoni, who took the helm just a few months ago, told me they were on back order in Russia. He assured me Russia is his company’s biggest market for the absurdely priced machine, which is handmade in Denmark.
The company also sells high-end speakers and more mass-market items such as a $999 iPod docking station.
“In the U.S., the economy is difficult but we make such niche products and there’s plenty of people out there who still have money to spend,” Mantoni said.
So if Dyson gadgets are selling like crazy and there’s a market for absurdly priced TVs and speakers in the U.S., maybe Best Buy should follow Dyson’s advice to stock up on his gagdets and other high-end luxury products.
There’s one more thing that Best Buy can do, as my colleague tweeted after she heard about where demand is strongest for $85,000 TVs:
@DhanyaTweets We now know where Best Buy needs to go to sell their TVs! All roads lead to Russia?”