Table of Contents
Executive Summary
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- Overview
- The market is shifting
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- Figure 1: Most recent electronic product purchase (difference)*, in-store vs online, January 2019
- The shopping experience is evolving
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- Figure 2: Consumer behavior/sentiment toward online electronics purchasing, March 2015 and January 2019
- What this tells us
- The electronics category is changing
- Retail evolution
- Technology evolution
- Key issues and opportunities in online electronics retailing
- Issue: Online shoppers expect to pay less
- Opportunity: Add value to the post-purchase experience
- Issue: Negative reviews, poor content deter online purchasing
- Opportunity: Respond quickly and use product content to educate shoppers
- Issue: Online storefronts aren’t enough to convince most electronics shoppers to buy
- Opportunity: Strengthen the ties between online and offline
- What it means
The Market – What You Need to Know
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- Online could account for nearly 40% of electronics retail in 2019
- Retail chains see sales shift to online
- Shoppers are more likely to buy emerging technology online
- Favorable economic conditions paint an optimistic picture
- Refurbished electronics will drive more online sales in the future
State of the Market
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- Electronics is the second most popular category with online shoppers
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- Figure 3: How consumers buy products (by category) – Any online, November 2018
- Online could account for nearly 40% of retail electronics sales in 2019
- Share of electronics sales online estimated at four times the share for retail overall
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- Figure 4: US growth indices – ecommerce, technology and communications, electronics retail sales, 2013-23
- Visitation to bricks and mortar electronics stores in steep decline
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- Figure 5: Shopped at an electronics store in the last 3 months, 2008-18
- Retail chains see a measurable shift from stores to online
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- Figure 6: Online share of Best Buy’s overall revenue, 2013-18
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- Figure 7: Online share of Target’s overall revenue, 2014-18
Market Breakdown
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- Emerging tech, smaller devices present the greatest opportunity online
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- Figure 8: Electronic items most recently bought online, January 2019
Market Factors
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- Internet connectivity is near universal, increasingly smartphone driven
- What it means:
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- Figure 9: Devices used to access the internet, February 2019
- Fewer electronics specialty stores may be driving more shoppers online
- Strong and stable macroeconomic environment supports overall growth
- Unemployment and underemployment remain relatively low
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- Figure 10: Unemployment and under employment, January 2007-February 2019
- Disposable personal income continues to rise
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- Figure 11: Disposable Personal Income change from previous period, January 2007-December 2018
Market Drivers
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- Online shopping has become a habit for most
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- Figure 12: Change in online shopping compared to last year, by online shopping frequency, November 2018
- People who shop online more are more likely to buy electronics online
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- Figure 13: Online electronics purchasing, by change in online shopping vs last year, November 2018
- Why would shoppers buy electronics online instead of in store?
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- Figure 14: TURF Analysis – Future online electronics shopping drivers, January 2019
Analyst Perspective
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- Look for online retailers to aggressively market refurbished electronics
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- Figure 15: SmartHome refurbished Insteon electronics promotional email, March 2019
- Physical stores will have an advantage at the high end
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- Figure 16: Abt Electronics, event announcement, March 2019
Retailers – What’s Working?
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- Key takeaways
- Amazon sets the bar
- Walmart adds tablets to its private label electronics line
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- Figure 17: Walmart customer acquisition email, February 2019
- Newegg uses YouTube to engage
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- Figure 18: Newegg YouTube video, “Build your PC the right way with Rosewill,” February 2019
- Best Buy gets personal, leverages its stores as a competitive advantage
- Samsung shows online shoppers in-store product availability
- Why this works:
Retailers – What’s Struggling?
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- Key takeaways
- Once-bankrupt electronics retailers look for new life online
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- Figure 19: Circuit City customer acquisition email, March 2019
- Convincing online electronics shoppers to pay full price
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- Figure 20: Attitudes toward paying full price, by electronics purchasing behaviors, January 2019
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- Figure 21: Amazon Prime Day marketing email, July 2018
- Geo-located pricing offers could alienate electronics shoppers
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- Figure 22: Target price switch story, January 2019
Retailers – What’s Next?
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- Key takeaways
- Online-only electronics retailers, brands will open smaller physical storefronts
- Physical stores will fulfill more online electronics orders
- 5G will drive shoppers to upgrade connected devices
- Visual search will drive more purchasing through apps
- Voice-activated speakers will (eventually) impact more electronics purchasing decisions
The Consumer – What You Need to Know
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- Early adopters are confident in their knowledge of technology
- Most electronics shoppers do at least some online shopping
- Stores play a key role
- Products that aren’t widely available in stores draw online shoppers
- Targeted content can create a “need”
- Carry familiar brands and make it easier to compare
Knowledge Level of Technology and Electronics
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- Nearly half of adults are Tech Savvy
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- Figure 23: Knowledge of the latest technology and electronics, January 2019
- Who are the Tech Savvy?
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- Figure 24: Tech Savvy – more knowledgeable, by key demographics, January 2019
- Tech Savvy electronics shoppers are more engaged online
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- Figure 25: Online electronics shopping prompts, by knowledge of technology and electronics, January 2019
How People Shop for Electronics Online
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- Six in 10 ultimately buy online, stores remain an influence
- Mintel recommends:
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- Figure 26: Online electronics shopping habits, January 2019
- Electronics purchasers are more likely to be online-dominant browsers, store-dominant buyers
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- Figure 27: Where electronics buyers typically browse for electronics, January 2019
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- Figure 28: Where electronics buyers typically buy electronics, January 2019
- Older and rural shoppers start, end online – but for different reasons
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- Figure 29: Online electronics shopping habits, by generation and urban area, January 2019
- Parents of younger children are omnichannel shoppers
- Mintel recommends:
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- Figure 30: Shopping habits for electronics online and smartphone use in store, by parent status and child(ren) ages, January 2019
Browsing and Buying – Device Usage
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- Mobile gains on desktop with online electronics shoppers
- Mintel recommends:
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- Figure 31: Devices and interfaces used to browse for and buy electronics online, January 2019
- Use mobile apps to engage Millennials
- Mintel recommends:
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- Figure 32: Mobile app usage, by generation, January 2019
Retailers Used for Electronics Purchases
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- More than half have bought electronics on Amazon
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- Figure 33: Retailers purchased from, January 2019
- Store-based retailers can compete with Amazon by making stores more digital friendly
- Mintel recommends:
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- Figure 34: Retailers purchased from, by electronics purchasing behaviors, January 2019
Products Most Likely to be Bought Online
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- Shoppers go online for the latest technology
- TVs and smartphones lag the field
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- Figure 35: Location of most recent purchase, by product category, January 2019
- Tech Savvy shoppers drive online electronics purchasing
- Mintel recommends:
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- Figure 36: Most recent purchase – Any online, by knowledge of technology and electronics, January 2019
Attitudes Toward Shopping for Electronics Online
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- In-home assembly and AR (augmented reality) gives retailers an edge
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- Figure 37: Attitudes toward shopping online for electronics, by electronics purchasing behaviors, January 2019
- Familiar brands appeal to Tech Savvy and Tech Static alike
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- Figure 38: Online electronics searching behavior, by knowledge of technology and electronics, January 2019
Online Shopping Prompts
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- Use content to convince shoppers it’s time to upgrade
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- Figure 39: Online shopping prompts, January 2019
- Higher income households have more need to upgrade
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- Figure 40: Online shopping prompts – need to upgrade, by household income, January 2019
- Video, social media content appeal more to younger men and Hispanics
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- Figure 41: Content-related online electronics shopping prompts, by age and gender, by Hispanic origin, January 2019
Barriers to Purchase
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- Cost, experience, product information, last mile concerns hinder purchasing
- Cost
- Experience
- Product information
- Last mile
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- Figure 42: Barriers to buying electronics online, January 2019
- Negative reviews and low-quality images paint an unfavorable picture with younger shoppers
- Mintel recommends:
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- Figure 43: Barriers to buying online – Product information, by generation, January 2019
- Tech Savvy shoppers are more likely to be turned off by bad reviews than almost anything else
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- Figure 44: Barriers to buying electronics online, by knowledge of technology and electronics, January 2019
Future Online Electronics Shopping Drivers
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- Going beyond price
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- Figure 45: Future online electronics shopping drivers, January 2019
- Younger online shoppers want to be more informed
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- Figure 46: Future online electronics shopping drivers, by generation, January 2019
- Parents want electronics retailers to provide more assistance
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- Figure 47: Future online electronics shopping drivers, by parental status, January 2019
Appendix – Data Sources and Abbreviations
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- Data sources
- Market data
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
- Terms
- TURF analysis –Methodology
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- Figure 48: Table - TURF Analysis – Future online electronics shopping drivers, January 2019
Appendix – The Market
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- Figure 49: Total US retail sales and forecast of electronics, at current prices, 2013-23
- Figure 50: Total US ecommerce retail sales and forecast, at current prices, 2013-23
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- Figure 51: Total US technology and communications sales and forecast, at current prices, 2013-23
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