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Electronics Retailing - US - April 2019

"Buoyed by a relatively stable economy, the CE (consumer electronics) retailing industry is enjoying an upward sales trajectory with no end in sight. Amazon has usurped Best Buy in sales, but Best Buy’s strong service model and exemplary omnichannel approach keep it alive and thriving. In the future, digitally native electronics retailers – including Amazon – will venture more into the physical retail space, while brick and mortar retailers will improve at creating a seamless shopping experience across channels. As price largely determines product and channel selection, the retail battleground is likely to shift more toward value-added services, and it is here where traditional brick and mortar retailers have an advantage."
- Diana Smith, Associate Director - Retail & Apparel

This Report looks at the following areas:

  • The state of the market
  • The role of technology
  • Where consumers are shopping
  • The path to purchase
  • How consumers make a final decision

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • 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

                                          • 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

                                                    • Steady growth trajectory
                                                      • 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

                                                      • Product categories
                                                        • Computers and phones dominate sales, but both are in decline
                                                          • Figure 3: Household technology ownership, May 2018
                                                          • Figure 4: Personal technology ownership, May 2018
                                                        • Retailers
                                                          • Electronics retailers finally see a gain after years of declines
                                                            • Figure 5: Total US revenues of electronics retailers, at current prices, 2013-23
                                                          • Channel
                                                            • Ecommerce a substantial part of electronics retailing
                                                              • Figure 6: Ecommerce sales, by top types of products, 2017
                                                          • Market Factors

                                                            • Economy
                                                              • Macroeconomic indicators paint optimistic picture
                                                                • Figure 7: GDP change from previous period, 2016-18
                                                                • Figure 8: Disposable personal income change from previous period, 2016-18
                                                                • 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+)
                                                                    • 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
                                                                      • 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
                                                                      • Figure 13: Households, by presence of own children, 2008-18
                                                                    • Homeownership could hamper smart home/security device sales
                                                                      • 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
                                                                      • 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
                                                                        • Figure 16: Devices used to access the internet, December 2017
                                                                    • Key Players – What You Need to Know

                                                                      • 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?

                                                                                  • Top 10 retailers remain mostly intact
                                                                                      • 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?

                                                                                          • Office supply stores in transition
                                                                                            • Wearables remain out of reach for most consumers
                                                                                              • Figure 18: US manufacturer shipments of wearable technology, 2013-18
                                                                                            • Will streaming media make Blu-ray and DVD players obsolete?
                                                                                              • Figure 19: US revenue of various video components, 2013-18
                                                                                            • Digital cameras and camcorders give (significant) way to mobile device cameras
                                                                                              • Figure 20: US revenue of digital imaging, 2013 and 2018
                                                                                          • What’s Next?

                                                                                            • Here comes 5G
                                                                                              • Figure 21: Samsung 5G prototype smartphone, January 2019
                                                                                              • 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

                                                                                                    • 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

                                                                                                              • Knowledge leads to purchases
                                                                                                                • Figure 24: Knowledge level with technology and electronics, January 2019
                                                                                                                • Figure 25: Attitudes and opinions about technology, by age and gender, October 2017-November 2018
                                                                                                              • Young men claim to know the most
                                                                                                                • Figure 26: Knowledge level with technology and electronics, by gender, January 2019
                                                                                                              • Don’t underestimate the seniors
                                                                                                                • Figure 27: Knowledge level with technology and electronics, by age, January 2019
                                                                                                              • More people = more electronics
                                                                                                                • Figure 28: Knowledge level with technology and electronics, by household size and parental status, January 2019
                                                                                                            • Retailers Shopped

                                                                                                              • Amazon sits alone at the top
                                                                                                                • Figure 29: Retailers shopped, January 2019
                                                                                                                • Figure 30: Retailers shopped, by knowledge level with technology and electronics, January 2019
                                                                                                              • Women will shop based on advice
                                                                                                                • Figure 31: Retailers shopped, by gender, January 2019
                                                                                                              • Best Buy faces increased competition for 18-34s
                                                                                                                • Figure 32: Retailers shopped, by age, January 2019
                                                                                                            • What Consumers Have Bought or Intend to Buy

                                                                                                              • Phones, TVs, and computers are most popular items
                                                                                                                  • Figure 33: Items purchased or planned to purchase, January 2019
                                                                                                                • Tech Savvy consumers go “all in” on the emerging tech products
                                                                                                                    • Figure 34: Items purchased, by above average knowledge level of technology and electronics, January 2019
                                                                                                                    • Figure 35: Comfort level with tech, by repertoire of items purchased, January 2019
                                                                                                                  • Smart speakers see gains
                                                                                                                    • Figure 36: Items purchased – Smart speakers, by age and income and household size, January 2019
                                                                                                                  • Connected home technologies fuel new demand
                                                                                                                  • Method of Shopping

                                                                                                                    • Three out of four consumers are multichannel shoppers
                                                                                                                      • Figure 37: Electronics browsing versus buying methods, January 2019
                                                                                                                      • Figure 38: Electronics shopping versus buying methods – Nets, January 2019
                                                                                                                    • Ecommerce plays major role in electronics retailing
                                                                                                                      • Figure 39: Location of last purchase by item, January 2019
                                                                                                                    • More often than not, shopping process begins online
                                                                                                                      • Figure 40: Online shopping frequency, by method of shopping, January 2019
                                                                                                                    • Product familiarity and purchase motivation influence preferred shopping methods
                                                                                                                      • Figure 41: Items purchased, by purchasing method among multichannel shoppers, January 2019
                                                                                                                    • Who’s shopping online?
                                                                                                                      • Figure 42: Purchasing method, by knowledge level about technology and electronics, January 2019
                                                                                                                  • Reasons for Buying

                                                                                                                    • Four in 10 purchases are replacements
                                                                                                                      • Figure 43: Reasons for buying, January 2019
                                                                                                                    • Having knowledge about tech doesn’t always correlate with ownership
                                                                                                                      • Figure 44: Reasons for buying, by knowledge level of technology and electronics, January 2019
                                                                                                                    • 18-24s buy mainly to upgrade rather than to replace
                                                                                                                      • Figure 45: Reasons for buying, by age, January 2019
                                                                                                                    • Electronics make great gifts
                                                                                                                    • Purchase Influencers

                                                                                                                      • Product reviews and recommendations hold significant weight
                                                                                                                        • Figure 46: Purchase influencers, January 2019
                                                                                                                        • Figure 47: Pre-purchase process for electronics and appliances, March 2018
                                                                                                                      • Tech Statics heed the advice of others, while Tech Savvies educate themselves
                                                                                                                        • Figure 48: Purchase influencers, by knowledge level of technology and electronics, January 2019
                                                                                                                      • Don’t underestimate social media
                                                                                                                        • Figure 49: Influence of social media on purchase decisions, by generation, January 2019
                                                                                                                      • T-Mobile
                                                                                                                        • Figure 50: T-Mobile social media posts, October-November 2018
                                                                                                                      • Verizon
                                                                                                                        • Figure 51: Verizon social media posts, October 2018
                                                                                                                      • Hispanics lean more on in-store tactics and social media
                                                                                                                        • Figure 52: Purchase influencers, by Hispanic origin, January 2019
                                                                                                                    • Important Product and Service Features

                                                                                                                      • Most of the time, price wins out
                                                                                                                        • Figure 53: Top five important product features/services – Any rank (net), January 2019
                                                                                                                      • Nearly half pay full price
                                                                                                                        • Figure 54: Price tolerance, by select demographics, January 2019
                                                                                                                      • Shipping speeds and customization options can help retailers get past the price barrier
                                                                                                                        • Figure 55: Secondary product features/services – Any rank (net), January 2019
                                                                                                                      • Focus on price increases as knowledge level decreases
                                                                                                                        • Figure 56: Secondary product features/services – Any rank (net), January 2019
                                                                                                                      • Men interested in tech aspects, while women seek advice and assurance
                                                                                                                        • Figure 57: Important product features/services – Any rank (net), by gender, January 2019
                                                                                                                      • Base sales strategies on consumer knowledge and motivation
                                                                                                                        • Figure 58: Important product features/services – Any rank (net), by generation, January 2019
                                                                                                                    • Behaviors and Attitudes

                                                                                                                      • Half of consumers have preconceived notions about what they want
                                                                                                                        • Figure 59: Research and shopping behaviors, by knowledge level of technology and electronics, January 2019
                                                                                                                      • Consumers are loyal to brands, not retailers
                                                                                                                        • Figure 60: Loyalty to brands and retailers, by knowledge level of technology and electronics, January 2019
                                                                                                                      • More information surrounding recycling programs is necessary
                                                                                                                          • Figure 61: Interest in recycling programs, by generation and race and Hispanic origin, January 2019
                                                                                                                      • Appendix – Data Sources and Abbreviations

                                                                                                                        • Data sources
                                                                                                                          • Sales data
                                                                                                                            • Fan chart forecast
                                                                                                                              • Consumer survey data
                                                                                                                                • Repertoire analysis methodology
                                                                                                                                  • Direct marketing creative
                                                                                                                                    • Abbreviations and terms
                                                                                                                                      • Abbreviations
                                                                                                                                        • Terms
                                                                                                                                        • Appendix – The Market

                                                                                                                                            • 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)
                                                                                                                                            • Figure 64: Median household income, in inflation-adjusted dollars, 2007-17
                                                                                                                                        • Appendix – Key Players

                                                                                                                                          • Apple comes on strong in 2019
                                                                                                                                          • Appendix – The Consumer

                                                                                                                                              • Figure 65: Home solutions revenue, 2013-18
                                                                                                                                              • Figure 66: Online shopping frequency, by comfort level with technology and electronics, January 2019
                                                                                                                                              • Figure 67: Online shopping frequency, by purchasing method, January 2019
                                                                                                                                              • Figure 68: Items purchased, by reasons for buying, January 2019
                                                                                                                                              • Figure 69: Purchasing decisions for home electronics, October 2017-November 2018
                                                                                                                                              • Figure 70: Attitudes and opinions about technology, by age and gender, October 2017-November 2018

                                                                                                                                          Electronics Retailing - US - April 2019

                                                                                                                                          US $4,395.00 (Excl.Tax)