With Toshiba withdrawing from the US consumer PC market, the question arises: who will step up to fill the retail shelf and advertising space left behind? Toshiba is the largest notebook manufacturer to completely withdraw from the US market, creating a rare opportunity for other vendors to capture shelf space, especially considering the difficulty for growth within the current PC market. Toshiba notebooks ran the gamut in price bands and were found in most major retailers, leaving room for a variety of offerings to assume their spots on store shelves and in weekly circulars. Market history suggests that the existing leaders will expand their presence in relation to their existing shares, but recent data indicates that some vendors may be utilizing this opportunity to expand at certain merchants, narrowing the gap (slightly) from first place in terms of shelf share.
Can’t Sell It if You Don’t Advertise It
During July of last year, Toshiba held approximately 18% of notebook advertising share with 65 advertisements. Ad count grew for the vendor as the 2015 holiday season approached, reaching a peak of 133 in November, largely due to Black Friday. After the November high, ads for Toshiba notebooks sharply dropped off throughout the spring season, while the discount value offer on Toshiba notebooks increased dramatically as merchants sought to clear remaining notebooks from retail shelves.
Taking a look at the ad activity over the last couple of months, we see the last remnants of Toshiba advertisements primarily consisting of clearance ads at Staples. The last retailer to be actively advertising the vendor’s notebooks appears to be hhgregg, known for carrying notebooks at the end of their life cycles.
Looking at ad share in July 2016 we see Toshiba’s ad presence drop to just 1%, with plenty of year-over-year gains from other vendors. As anticipated, we see the top three advertising vendors, HP, Dell, and Lenovo gain ad share roughly equivalent to their existing shelf presence, gains larger than previously seen when comparing holiday 2015/2014. HP managed to gain the most share (11 points YoY), with a significant ad count increase in both Best Buy and Office Depot weekly circulars.
Room for Rent
Around this time last year, Toshiba was in third place (12%) in terms of retail shelf share with 85 placements across various retailers. Similar to the company’s ad activity, its retail placements peaked during November to 121 and fell each subsequent month. Many of Toshiba’s budget models (including Chromebooks) were the first to go, likely appealing to bargain shoppers during Black Friday and the rest of the holiday season. Slower to fade away were the company’s higher-end models, including those that were equipped with Intel Core i7 processors and/or priced above $499.
While the general public’s awareness of Toshiba’s withdraw from the PC business was relatively low, it is likely that retail store associates were well-aware of the move, prompting them to advise customers on the matter before making a large purchase on a notebook.
Toshiba currently sits with half of its retail shelf share from last year at 6%, with that figure continuing to decline. The majority of the company’s notebooks now exist as clearance items at retailers like Best Buy and Staples, or join a large number of older models from other vendors at stores like hhgregg or Microcenter.
With back-to-school placements pouring in over the last few months and older models still in the process of being phased out, exact gains by each vendor in relation to Toshiba’s exit cannot yet be confirmed. So far, top vendors HP, Dell, and Lenovo have all gained at least two percentage points each in shelf share compared to last year. Considering their previous standings, the gains represent more for second place Dell, and yet even more for third place Lenovo.
As the Dust Settles…
Looking at the notebook environment in the wake of Toshiba’s exit, we see top players HP, Dell, and Lenovo gaining the most retail shelf space and ad share in conjunction with the departure of the vendor. Lenovo was able to return to Staples after a year of absence, while Dell secured more shelf space at the HP dominated club stores. Samsung also doubled its 1% shelf share in the notebook market, largely due to its lineup at Best Buy. Following overall market trends, gaming products have also added to the ad count and retail space and is expected to continue growing.
Top player HP managed to gain significant ad share in the past months, but experienced retail share gain on par with that of second and third place Dell and Lenovo. It is possible that, while retailers are willing to let HP pay for the majority of ad space in their weekly circulars, they are not willing to give up that much of their shelf space to the PC manufacturer. This leaves competitors opportunity to gain shelf share at retailers they may have not had opportunity to prior (Lenovo – Staples, Dell – Costco/Sam’s Club).
Exact gains for each vendor will become more apparent as Toshiba products fully clear from retailer’s shelves and older products (replaced by back-to-school arrivals) follow suit. So far, HP has managed to gain the most ad share following Toshiba’s exit while Dell, Lenovo, and Samsung have secured significant shelf space gains relative to their previous standings. When the dust finally does settle, we may see that much smaller players were able to benefit from the vacancy as well; gaining retail space that would have been otherwise inaccessible. While the immediate take-away can be simplified down to “the big get bigger,” it is important to note the opportunity the event gives for all vendors to secure a stake during the transition. It is also worth noting that within the limited space each retailer has, the big, can only get so much bigger.