COVID-19 and Technology: A Year On - UK - 2021
Overview
 
Time spent at home during the pandemic has increased the consideration given to technology products, including those that many people may not have previously considered buying, such as smart home devices. Just 10% say they owned a smart thermostat prior to the pandemic, however 16% who don’t own one think they would be interested in buying one in the next 12 months. Similarly, 8% say they owned a smart home security product (eg a Ring doorbell) before COVID-19, but 19% say this is something they would consider buying in the next 12 months.

Although the closure of retail had a detrimental effect on purchasing, with consumers unable to see devices in person for long periods during the pandemic, digital services such as mobile apps for commerce and gaming have seen greater traction. Meanwhile, video calling was instrumental in connecting friends and families in lockdown. The pandemic has ushered in a new era of digital literacy, and tech adoption, especially for older consumers, which can be a platform for technology products and services to build on with this demographic.

However, COVID-19 saw supply chain issues such as factory closures in the early stages of the pandemic impact on sales of devices such as computers, TVs smartphones, and there is a legacy of ongoing disruption in the form of a global shortage of semiconductors used in electrical goods and technology as a result of that early disruption and increased demand throughout the pandemic. This will likely continue meaning the supply of PCs, Laptops, phones and gaming consoles will still suffer through 2021 and potentially could mean higher prices for consumers at the checkout.

Time spent at home has meant technology products and services have had an increased importance in people’s lives. From voice interactions to online shopping, usage of technology can grow from a platform of increased confidence and habitual use. This can be a driver to add additional tech products to the household such as smart home devices as well as drive digital upscaling, for instance moving to faster broadband connections. Health and wellbeing will also be at the forefront of people’s minds, meaning tech supporting these areas such as wearables and apps and services will continue to gain in popularity. 

Key issues covered in this Report
●	The impact of COVID-19 on the technology market and what the sector’s recovery will look like
●	How COVID-19 shaped consumer behaviour
●	Who the winners and losers were from the pandemic
●	How the pandemic will shape consumers’ behaviour and their future technology purchasing habits
●	What products and services consumers used during the pandemic and which products and services will see greater use and prominence post pandemic

COVID-19: Market context
The first COVID-19 cases were confirmed in the UK at the end of January 2020, with a small number of cases in February. Rapidly rising case numbers led to the first national lockdown, starting on 23 March. It wasn't until 15 June that non-essential stores were allowed to reopen, followed by pubs, restaurants, hotels and hairdressers on 4 July and many beauty businesses on 13 July.

By September, it had become clear that the UK was at the start of a second wave, and social distancing measures were intensified. Continued increases in infection numbers led to Wales implementing a two-week national lockdown from 19 October, England announcing a month-long lockdown from 5 November and Scotland introducing a new five-level system of coronavirus restrictions.

Despite these restrictions, however, case numbers continued to increase. All four UK nations tightened restrictions further in January 2021, effectively leading to a full UK-wide lockdown.

On 22 February, Boris Johnson announced the roadmap to an easing of restrictions in England, starting with the reopening of schools on 8 March, followed by easing of restrictions on outdoor gatherings on 29 March and with a hoped end to all restrictions by 21 June. The Welsh and Scottish governments also gave more details on their plans to ease restrictions, with both nations taking a slightly more cautious approach to the one planned for England.

The UK’s vaccination programme started on 8 December 2020. The Pfizer-BioNTech, Moderna, and Oxford-AstraZeneca vaccines are currently licensed for use in the UK, with a fourth, the Janssen vaccine manufactured by Johnson and Johnson approved for use in the UK in May. So far, 39.7 million first doses and 26.4 million second doses of the vaccine have been administered by June 3.

Economic and other assumptions
Mintel’s economic assumptions are based on the Office for Budget Responsibility’s central scenario included in its March 2021 Economic and Fiscal Outlook Report. After the fall of 9.9% over the course of 2020, the scenario suggests that UK GDP will grow by 4% in 2021 and 7.3% in 2022. 

GDP isn’t expected to return to pre-COVID-19 levels until Q2 2022, although this is six months earlier than the OBR forecast in November 2020, mainly because of the faster-than-expected rollout of vaccines.

Unemployment is expected to peak at 6.5% in Q4 2021. As with GDP, this is more positive than the OBR’s November forecast, but the OBR does raise the prospect of long-term scarring on employment, especially in the more exposed retail and hospitality sectors.

All non-essential retail stores were permitted to open from 12 April, with extended opening hours to allow for a safe return to retail spaces, but with social distancing rules and mask wearing still in place.

Products covered in this Report
For the purposes of this Report, Mintel has used the following definitions: 

This Report covers the market for consumer technology, including hardware and devices, digital goods and service providers.

Definitions used for the category forecasts:

Service providers include mobile network providers, internet, fixed voice and pay-TV.

Hardware and devices include televisions, games consoles, mobile phones, desktops, laptops and tablets, smartwatches and fitness trackers/sports watches, VR headsets and other consumer technology devices.

Digital goods include software, games and mobile apps.