Digital Trends Quarterly: Inc Impact of COVID-19 - UK - September 2020
Overview
 
Recent purchasing of technology products has fallen as a result of COVID-19, with purchasing of smartphones – the category that typically sees the greatest activity – down from 16% of adults in the three months to September 2019 to 12% in April and June 2020. 

While there is some sign of purchasing intent rising, it remains below pre-pandemic levels. With the economic uncertainty ahead, consumers will be largely focused on replacements in markets such as smartphones, laptops and tablets. The majority will be focusing on reliable devices that offer good value, with fewer people willing to spend on premium models with the latest features. 

There are likely to be delays to take-up of more innovative and expensive designs such as foldable screen technology and hybrid laptops. With many Brits looking to hold onto devices as long as possible, it could also take longer for 5G-ready devices to gain a foothold. 

There are more positive signs in home-entertainment markets, however, with the video games market thriving during lockdown in terms of consoles and software. This trend will be heightened by the highly anticipated winter launches from Sony and Microsoft. Meanwhile, the increasing focus on value will provide opportunities for lesser-known brands that can offer competitive specifications at lower prices in many categories. 

The pandemic has also brought additional focus on health, with fitness trackers and smartwatches continuing to grow in popularity. Such devices are becoming more sophisticated and are able to offer more comprehensive health and wellbeing data each year. With more people using apps and live classes for home workouts and tracking exercise outdoors, there will be more opportunities than ever in the health tech market.

Key issues covered in this report
●	The impact of COVID-19 on purchasing of consumer technology products
●	How online activities have changed as a result of COVID-19
●	The increasing role technology is playing in consumers’ health and fitness habits
●	The latest innovations and new product launches across consumer technology markets.

COVID-19: Market context
This report was prepared on 21 September 2020.

The first COVID-19 cases were confirmed in the UK at the end of January, with a small number of cases in February. The government focused on the ‘contain’ stage of its strategy, with the country continuing to operate much as normal. As the case level rose, the government ordered the closure of non-essential stores on 20 March. 

A wide lockdown requiring people to stay at home except for essential shopping, exercise and work ‘if absolutely necessary’ followed on 23 March. Initially, a three-week timeframe was put on the measures, which was extended in mid-April for another three weeks. 

On 10 May, the Prime Minister announced revised guidance, recommending that people who could not work from home should return to the workplace, and giving people more scope to spend time out of the home. Further relaxations to lockdown rules were announced in the week of 23 May, including gradual re-opening of non-essential retailers, and increased opportunities for social interaction across households.

On 15 June, non-essential retail stores re-opened and on 4 July, hairdressers, restaurants and cafés re-opened as part of the easing of lockdown. From the latter date, people have been allowed to meet others from different households, either indoors or outdoors. On 25 July, gyms and swimming pools re-opened, while consumers were allowed back into casinos and bowling alleys on 1 August.

On 12 August, the Office for National Statistics announced that UK GDP fell by 20.4% between April and June 2020 due to the COVID-19 lockdown. As a result, the UK is now in a recession for the first time since 2009. 

Economic and other assumptions
Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its July 2020 Fiscal Sustainability Report. The scenario suggests that UK GDP could fall by 12.4% in 2020, recovering by 8.7% in 2021 and that unemployment will reach 11.9% by the end of 2020, falling to 8.8% by the end of 2021. The current uncertainty means that there is wide variation on the range of forecasts, however – something reflected in the OBR’s own scenarios. In its upside scenario, economic activity returns to pre-COVID-19 levels by Q1 2021. The OBR’s more negative scenario, by contrast, would mean that GDP does not recover until Q3 2024.

Covered in this Report
This Report covers ownership of and intentions to purchase consumer technology products (eg televisions, laptops, and smartphones) and the activities consumers perform on their laptops/desktops, tablets and smartphones. 

In each quarter, we focus on a different aspect of consumer behaviour. This edition focuses on social and media-related activities including use of social networks and messaging services, online news and video consumption, photo and video sharing and gaming.

Every edition also contains a Special Focus section, where we address a particular aspect of the consumer technology market. This edition’s Special Focus is technology habits during the COVID-19 pandemic.