• by Aaron Baar , August 10, 2010

The improving economy, along with a growing belief that staying connected through technology is an essential part of daily life, will fuel moderate sales of electronics and appliances into the fall, according to IBM.

The company, which provides the analytics-based forecasts for its clients, says sales of those products in the U.S. are expected to grow by $739 million in September and October, up 5% from the same period last year.

"The products are becoming a more important part of our lives. Being connected counts," Michael Haydock, retail analytics leader for IBM, tells Marketing Daily.

While the year started off slow for electronics and appliances, with combined January and February sales down $846 million (about 5%), compared with the previous year, things started to pick up in March, April and May, which had a combined revenue increase of $483 million, up 2% from the previous year.

According to Haydock's forecast, sales in August should be $8.55 billion, compared with $8.13 billion in 2009. September sales are forecast at $7.94 billion (vs. $7.55 billion in September 2009), and October sales are projected at $7.86 billion (up from $7.5 billion in October 2009).

"The general trend is up a percent to a percent and a half, over last year," Haydock says. "That's a really healthy trend compared with what we experienced last year."

Both consumer savings and disposable income are increasing, which is giving consumers freedom to purchase items they had been wanting, such as an Internet-connected television or new computer.

"The necessity didn't change, but the ability to pay for it did," Haydock says. "They might have bought electronics goods rather than going clothing shopping or out to a restaurant."

As demand increases, retailers selling electronics and appliances may want to be sure of a few things heading into the holiday season, he says.

One, make sure they have enough inventory to meet this increasing demand. ("If you've got a hot product, don't run out of it," he says.) Two, have knowledgeable salespeople on the staff to answer consumer questions. ("A lot of those products are complicated and the interface between devices is complicated," he notes.)

And, three, don't be afraid to advertise. "If there's going to be a steady state in demand, I would encourage people to advertise to get consumers into their locations," he says.