Listen Up: Retail Market for Headphones in the US Research Report Now Available from IBISWorld

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Although a drastic dip in discretionary spending due to low disposable income resulted in decreased demand for headphones during the recession, headphone retailers have reaped the benefits of consumers spending more time on mobile devices and gaming platforms, which generally have headphone compatibility, in the past five years. For these reasons, industry research firm IBISWorld has added a report on the Retail Market for Headphones to its growing industry report collection.

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Headphone sales have expanded as mobile electronics proliferate.

Although headphone retailers have reaped the benefits of consumers spending more time on mobile devices and gaming platforms, which generally have headphone compatibility, a drastic dip in discretionary spending due to low disposable income resulted in decreased demand for headphones in the past five years. In 2009, disposable income dipped for the first time in two decades, driving down the upstream Audio and Video Equipment Manufacturing industry's (IBISWorld report 33431) revenue 45.8% that year alone. “Fewer consumers shopped for high-end electronics,” says IBISWorld industry analyst Agata Kaczanowska, “while some held off purchases altogether.” Headphone sales experienced the same trends, pushing down revenue 17.1% in 2009. But because they are relatively inexpensive compared with other electronics and cheaper imports continue to flood the industry, decline was only temporary. Revenue growth turned around in 2010 and even jumped 9.6% in 2011. As a result of these contrasting trends, revenue in the retail market for headphones declined at a 1.7% annualized rate over the past five years.

Industry profit is rising as headphone retailers pay lower wages per unit sold due to more e-commerce sales and diversification of products. “By carrying more products, stores – even including grocery and convenience stores – benefit from high-volume and convenience sales, decreasing the costs per unit for each sale,” says Kaczanowska. “This nature is especially the case for mass merchandisers and e-tailers like Walmart and Amazon, which have increased the variety of headphones they carry in the past five years.” The headphone retailing industry is highly fragmented, with the top four headphone retailers making up only a small share of industry revenue. Many stores sell headphones, ranging from large companies like Best Buy and Amazon to local souvenir shops and dollar stores. While there are many well-known companies in the industry, the majority of the industry is characterized by a large number of small players. The industry will maintain a low level of market share concentration over the next five years.

Continued growth in the use of mobile devices and increasing disposable income are projected to drive industry revenue growth through 2017. Volume sales are forecast to continue benefiting headphone retailers as cheap imports continue to grow as a proportion of the industry's revenue. Additionally, headphone manufacturers are anticipated to increasingly compete through marketing tactics, which will help stores sell higher-end headphones to consumers. For more information, visit IBISWorld’s Retail Market for Headphones in the US industry report page.

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IBISWorld industry Report Key Topics

This industry sells headphones through traditional brick-and-mortar outlets, as well as online and by mail-order catalog. The industry excludes hearing aids, headphones packaged with other electronics, headphone rental and used goods.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld
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