Table of Contents
Executive Summary
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- Overview
- The state of the market
- What you want to know
- What we see
- The role of technology
- What you want to know
- What we see
- Where consumers are shopping
- What you want to know
- What we see
- The path to purchase
- What you want to know
- What we see
- How consumers make a final decision
- What you want to know
- What we see
- What it means
The Market – What You Need to Know
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- Bright future lies ahead
- Some of the largest product categories are declining
- Ecommerce is strong in electronics retailing, outpacing other categories
- Positive economic climate supports the sector
- Expected population growth among 25-44s could boost future sales
Market Size and Forecast
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- Steady growth trajectory
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- Figure 1: Total US retail sales and fan chart forecast of electronics,* at current prices, 2013-23
- Figure 2: Total US retail sales and forecast of electronics,* at current prices, 2013-23
Market Breakdown
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- Product categories
- Computers and phones dominate sales, but both are in decline
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- Figure 3: Household technology ownership, May 2018
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- Figure 4: Personal technology ownership, May 2018
- Retailers
- Electronics retailers finally see a gain after years of declines
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- Figure 5: Total US revenues of electronics retailers, at current prices, 2013-23
- Channel
- Ecommerce a substantial part of electronics retailing
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- Figure 6: Ecommerce sales, by top types of products, 2017
Market Factors
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- Economy
- Macroeconomic indicators paint optimistic picture
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- Figure 7: GDP change from previous period, 2016-18
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- Figure 8: Disposable personal income change from previous period, 2016-18
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- Figure 9: Consumer confidence and unemployment, 2000-19
- Impact of tariffs could lead to price increases
- Population
- Growth anticipated among key electronics buyers (25-44s) and prospects (65+)
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- Figure 10: Population aged 18 or older, by age, 2013-23
- Figure 11: Electronics purchased – Any (net) and knowledge level with technology and electronics, by age, January 2019
- Household dynamics
- More young adults living at home means more shared devices
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- Figure 12: Percentage of young adults living in parental home, by age, 2008 and 2018
- Number of households with children reaches lowest point in a decade
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- Figure 13: Households, by presence of own children, 2008-18
- Homeownership could hamper smart home/security device sales
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- Figure 14: Purchase incidence and intent of smart home or other security devices, by housing situation, January 2019
- The bigger the household size, the more electronics, but household size is shrinking
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- Figure 15: Households by number of members as of 2018 and repertoire of items purchased – Any (net), by household size, January 2019
- Connectivity
- More ways to jump online
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- Figure 16: Devices used to access the internet, December 2017
Key Players – What You Need to Know
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- Dollar stores see gains, while office supply stores see losses
- Best Buy wants to coexist with Amazon, not necessarily defeat it
- Smart assistants are everywhere
- Wearables: yes, no, maybe?
- 5G brings the future to the forefront
- More “things” bring more risk
What’s Trending?
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- Top 10 retailers remain mostly intact
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- Figure 17: Top 10 US consumer electronics retailers, 2018
- Best Buy holds its ground in the age of Amazon
- Mass merchandisers launch private label electronics lines
- Digital assistants are everywhere, and here for good
What’s Struggling?
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- Office supply stores in transition
- Wearables remain out of reach for most consumers
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- Figure 18: US manufacturer shipments of wearable technology, 2013-18
- Will streaming media make Blu-ray and DVD players obsolete?
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- Figure 19: US revenue of various video components, 2013-18
- Digital cameras and camcorders give (significant) way to mobile device cameras
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- Figure 20: US revenue of digital imaging, 2013 and 2018
What’s Next?
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- Here comes 5G
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- Figure 21: Samsung 5G prototype smartphone, January 2019
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- Figure 22: Verizon “First to 5G” TV Commercial, September 2018
- Figure 23: Attitudes toward mobile networks – 5G, by gender and age, January 2019
- Internet of Things brings selling opportunities, but also heightens security risk
- Catering to the needs of seniors
- Samsung wants to go after Apple, plans to open three stores
- GameStop 2.0
The Consumer – What You Need to Know
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- Keeping up with tech trends
- Amazon “bests” Best Buy
- Three out of four consumers are multichannel shoppers
- “Big three” products comprise majority of electronics purchases
- “I know what I want” versus “I need help figuring out what I want”
Knowledge Level with Technology and Electronics
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- Knowledge leads to purchases
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- Figure 24: Knowledge level with technology and electronics, January 2019
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- Figure 25: Attitudes and opinions about technology, by age and gender, October 2017-November 2018
- Young men claim to know the most
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- Figure 26: Knowledge level with technology and electronics, by gender, January 2019
- Don’t underestimate the seniors
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- Figure 27: Knowledge level with technology and electronics, by age, January 2019
- More people = more electronics
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- Figure 28: Knowledge level with technology and electronics, by household size and parental status, January 2019
Retailers Shopped
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- Amazon sits alone at the top
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- Figure 29: Retailers shopped, January 2019
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- Figure 30: Retailers shopped, by knowledge level with technology and electronics, January 2019
- Women will shop based on advice
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- Figure 31: Retailers shopped, by gender, January 2019
- Best Buy faces increased competition for 18-34s
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- Figure 32: Retailers shopped, by age, January 2019
What Consumers Have Bought or Intend to Buy
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- Phones, TVs, and computers are most popular items
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- Figure 33: Items purchased or planned to purchase, January 2019
- Tech Savvy consumers go “all in” on the emerging tech products
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- Figure 34: Items purchased, by above average knowledge level of technology and electronics, January 2019
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- Figure 35: Comfort level with tech, by repertoire of items purchased, January 2019
- Smart speakers see gains
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- Figure 36: Items purchased – Smart speakers, by age and income and household size, January 2019
- Connected home technologies fuel new demand
Method of Shopping
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- Three out of four consumers are multichannel shoppers
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- Figure 37: Electronics browsing versus buying methods, January 2019
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- Figure 38: Electronics shopping versus buying methods – Nets, January 2019
- Ecommerce plays major role in electronics retailing
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- Figure 39: Location of last purchase by item, January 2019
- More often than not, shopping process begins online
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- Figure 40: Online shopping frequency, by method of shopping, January 2019
- Product familiarity and purchase motivation influence preferred shopping methods
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- Figure 41: Items purchased, by purchasing method among multichannel shoppers, January 2019
- Who’s shopping online?
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- Figure 42: Purchasing method, by knowledge level about technology and electronics, January 2019
Reasons for Buying
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- Four in 10 purchases are replacements
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- Figure 43: Reasons for buying, January 2019
- Having knowledge about tech doesn’t always correlate with ownership
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- Figure 44: Reasons for buying, by knowledge level of technology and electronics, January 2019
- 18-24s buy mainly to upgrade rather than to replace
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- Figure 45: Reasons for buying, by age, January 2019
- Electronics make great gifts
Purchase Influencers
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- Product reviews and recommendations hold significant weight
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- Figure 46: Purchase influencers, January 2019
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- Figure 47: Pre-purchase process for electronics and appliances, March 2018
- Tech Statics heed the advice of others, while Tech Savvies educate themselves
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- Figure 48: Purchase influencers, by knowledge level of technology and electronics, January 2019
- Don’t underestimate social media
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- Figure 49: Influence of social media on purchase decisions, by generation, January 2019
- T-Mobile
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- Figure 50: T-Mobile social media posts, October-November 2018
- Verizon
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- Figure 51: Verizon social media posts, October 2018
- Hispanics lean more on in-store tactics and social media
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- Figure 52: Purchase influencers, by Hispanic origin, January 2019
Important Product and Service Features
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- Most of the time, price wins out
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- Figure 53: Top five important product features/services – Any rank (net), January 2019
- Nearly half pay full price
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- Figure 54: Price tolerance, by select demographics, January 2019
- Shipping speeds and customization options can help retailers get past the price barrier
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- Figure 55: Secondary product features/services – Any rank (net), January 2019
- Focus on price increases as knowledge level decreases
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- Figure 56: Secondary product features/services – Any rank (net), January 2019
- Men interested in tech aspects, while women seek advice and assurance
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- Figure 57: Important product features/services – Any rank (net), by gender, January 2019
- Base sales strategies on consumer knowledge and motivation
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- Figure 58: Important product features/services – Any rank (net), by generation, January 2019
Behaviors and Attitudes
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- Half of consumers have preconceived notions about what they want
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- Figure 59: Research and shopping behaviors, by knowledge level of technology and electronics, January 2019
- Consumers are loyal to brands, not retailers
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- Figure 60: Loyalty to brands and retailers, by knowledge level of technology and electronics, January 2019
- More information surrounding recycling programs is necessary
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- Figure 61: Interest in recycling programs, by generation and race and Hispanic origin, January 2019
Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Repertoire analysis methodology
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
Appendix – The Market
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- Figure 62: Total US retail sales and forecast of electronics,* at inflation-adjusted prices, 2013-23
- Figure 63: Percentage of total electronics sales by category, at current prices, 2018 (est)
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- Figure 64: Median household income, in inflation-adjusted dollars, 2007-17
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Appendix – Key Players
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- Apple comes on strong in 2019
Appendix – The Consumer
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- Figure 65: Home solutions revenue, 2013-18
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- Figure 66: Online shopping frequency, by comfort level with technology and electronics, January 2019
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- Figure 67: Online shopping frequency, by purchasing method, January 2019
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- Figure 68: Items purchased, by reasons for buying, January 2019
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- Figure 69: Purchasing decisions for home electronics, October 2017-November 2018
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- Figure 70: Attitudes and opinions about technology, by age and gender, October 2017-November 2018
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