In the face of inflation and economic uncertainty over the past years, electrical goods retailers have seen consumers shift spending from discretionary categories to essentials, placing pressure on brands to revamp their strategies. Looking ahead, consumer behaviour towards electrical goods will be increasingly influenced by the evolution of AI and its integration into shopping platforms and hardware.Â
Electrical Goods Market – Current Landscape
The electrical goods market is highly discretionary, dependent on economic growth and consumer confidence. Rapid technological breakthroughs with AI have the potential to drive the market forward for home technology. However, the category remains skewed towards the young and the wealthy, with almost half of shoppers aged over 65 and a third of lower-income shoppers not having made a purchase in the last 12 months.
The cost-of-living crisis has led consumers to become increasingly price-conscious and, in response, there has been growth in demand for refurbished devices, as well as for flexible payment options and offers to trade-in to upgrade to the latest technology.
As confidence improves, specialist retailers can appeal to shoppers by transforming stores into spaces that reflect the coziness of consumers’ homes. These stores would encourage them to browse and to purchase, in addition to providing high-quality product demonstrations and full support with installation and repairs.
Electrical Goods Market – Statistics
- Electrical goods market market size: Mintel estimates the consumer spending on electrical goods in Germany reached €55.9bn in 2023.
- Electrical goods market growth: Mintel estimates that consumer spending on electrical goods will reach €64.7bn in 2028.
- Electrical goods market share: MediaMarkt and Amazon together represent 41% of consumer spending on electrical goods
- Electrical goods market trends: 62% of electrical goods shoppers willing to spend more on electricals that can improve their health and wellbeing.
Key Topics Analysed in the Report
- The impact of inflation and the cost of living crisis on the ability of consumers to purchase electrical goods and how much they spend on the category.
- The importance of the online channel for the purchase of electrical goods.
- Key purchase drivers for consumers in the electrical goods market.
- Leading retailers used to purchase in the electrical goods market.
- Consumer behaviours regarding the maintenance, repair and replacing of electrical goods.
- Factors driving the purchase of electrical goods in Germany.
- Interest in electrical goods services and product development from retailers.
Market Scope
The full report covers the retailing of electrical goods at both specialists and non-specialists. The following product categories are covered:
- Household appliances
- Audio-visual and photographic equipment
- Computing and telecoms
- Personal care appliances
Readers of this report may also be interested in our German Lifestyle Consumer Report, or our range of German Market Research.
Meet the Expert Behind the Analysis
Armando had over 15 years’ experience in market research when he joined Mintel in 2019 to write the European retail reports. He rejoined Mintel in 2023 as Associate Director, focusing on the German market. Armando studied Business and Economics at University of São Paulo and managed his own research business for 11 years prior to joining Mintel.
Electricals is a highly discretionary market, but there are opportunities to entice shoppers with smarter and energy-efficient products that make life easier.
Armando Falcao
Associate Director – Retail Reports
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EXECUTIVE SUMMARY
- Overview
- Key issues covered in this Report
- The five year outlook for electrical goods retailing
- Market context
- Retail sales grew 3% in 2023 mainly due to inflation
- Graph 1: retail sales (incl VAT), 2014-24
- Consumer demand remained constrained in 2023
- Even at lower levels, inflation is still impacting consumption in Germany
- Graph 2: harmonised consumer price index, by category, 2021-24
- Sales of electrical goods are strongly influenced by economic stability and consumer confidence
- Mintel predicts
- Market size & forecast
- Spending on electrical goods will see healthy growth moving forward
- Electrical goods will be increasingly redefined by the use of AI
- Offer credibility and in-depth knowledge to consumers looking for smarter and more efficient devices
- Opportunities
- Capitalise on consumers’ willingness to spend on products that improve their wellbeing
- Leverage consumers’ willingness to spend more on devices for their health and wellbeing
- Target younger men’s interest in esports and their higher spending on videogames and VR headsets
- Target families with loyalty rewards and flexible payment options to upgrade their favourite devices
- The competitive landscape
- MediaMarkt and Amazon together represent 41% of consumer spending on electrical goods
- Graph 3: leading retailers’ share of consumer spending on electrical goods, 2023
- Specialist retailers are gradually losing share of the electrical goods market
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MARKET DRIVERS
- The German economy
- 2024 is expected to remain challenging
- Graph 4: key economic data, in real terms, 2019-25
- The inflation rate is bouncing back to more conventional levels
- Inflation is still the key factor affecting consumers’ finances…
- …confidence and expenditure
- Graph 5: financial confidence index, 2022-24
- Retail sales have risen, but Germans actually bought less in 2023
- Graph 6: retail sales excluding fuel and chemists (excl VAT), 2016-24
- Sustainability
- Appeal to environmentally conscious shoppers by enabling them to verify environmental claims
- Consumers will increasingly look for – and purchase – more energy-efficient electrical goods
- AI and technological development
- Development and use of AI will reshape the shopping experience for electrical goods
- Drive consumer interest with AI-powered products
- Retailers will increasingly tap into AI to enhance the customer journey and the shopping experience
- The impact of AI on the gaming industry will directly affect the electrical goods market
- Regulatory and legislative changes
- New EU rules on the right to repair
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MARKET ACTIVITY
- Sector size and forecast
- Consumer spending on electrical goods has seen ups and downs
- Graph 7: consumer spending on electrical goods (incl VAT), 2014-23
- Spending on electrical goods is highly discretionary
- Spending on electrical goods to rise as confidence recovers
- Technological developments and growing consumer adoption of innovative products will drive the electrical goods market forward in coming years
- Market segmentation
- Household appliances were the only electrical goods category to see growth in spending in 2023
- Graph 8: consumer spending on electrical goods (incl VAT), by category, 2014-23
- Consumer electronics account for 56% of electrical goods spending
- Graph 9: breakdown of consumer spending on electrical goods, by category, 2014-23
- Consumer electronics have lost share of spending to telecom and communication products
- Specialist sector size
- Strong competition from online and non-specialists continues to challenge specialists to grow
- Graph 10: electrical goods sales from specialist retailers (excl VAT), 2014-23
- Specialists are gradually losing share of the electrical goods market
- Graph 11: specialist retailers’ share of consumer spending on electrical goods, 2014-23
- Amazon and non-specialists continue to challenge specialist retailers to grow
- Channels of distribution
- Online retail declined in 2023, but should grow again from 2024
- Graph 12: online retail sales in selected categories, 2016-23
- Online is the preferred channel to buy electrical goods
- Graph 13: channels used to purchase electrical goods, by age group, 2024
- A fifth of consumer spending on electrical goods goes online
- Graph 14: online share of consumer spending on electricals, 2016-23
- Create an unforgettable in-store experience that online competitors cannot match
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WHAT CONSUMERS WANT AND WHY
- Electrical goods purchased
- Mobile phones and small household appliances are the categories purchased most
- Graph 15: electrical goods purchased in the last 12 months, 2024
- Mobile phones and small household appliances are purchased most
- Younger men drive the market for electrical goods
- Certain electrical goods categories are strongly skewed towards younger shoppers
- Graph 16: electrical goods that consumers have purchased, by generation, 2024
- Entice younger men by promoting higher-ticket items with the latest technology
- Graph 17: consumers who have purchased electrical goods, by gender and age group, 2024
- Target families with exciting in-store experiences and product bundles for the entire family
- Video games offer great potential with more affluent shoppers
- Graph 18: electrical goods categories’ positioning by shoppers’ average age and household income, 2024
- How much they spend on electrical goods
- Despite the cost of living crisis, at least 10% of German shoppers spent over €1,500 on electrical goods in 2023
- Graph 19: how much consumers spend on electrical goods, by generation, 2024
- Capitalise on shoppers willing to spend more with bundle offers and easy payment methods
- Encourage wealthier shoppers to upgrade to smarter devices
- Graph 20: how much consumers spend on electrical goods, by monthly household income, 2024
- Encourage wealthier shoppers to spend on smarter versions for their devices
- Video game and home entertainment buyers are the most likely to spend above €1,500 on electrical goods
- Graph 21: how much consumers spend on electrical goods, by product category, 2024
- Appeal to buyers with in-store gaming experiences
- Channels used to buy electrical goods
- Deliver a truly omnichannel shopping experience
- Graph 22: channels used to purchase electrical goods, by generation, 2024
- Electrical goods shoppers enjoy the convenience of comparing and buying the latest products online
- Target Millennials with a flawless and engaging smartphone shopping experience
- Appeal to online high-ticket buyers with wider product variety and immediate availability
- Graph 23: electrical goods categories that consumers have purchased, by channel, 2024
- Encourage online shoppers to “test-drive” new products in-store
- Strengthen social media sales by appealing to younger shoppers with trusted and relatable influencers
- Graph 24: platforms used to buy electrical goods via smartphone, by generation*, 2024
- Retailers used to purchase electrical goods
- Amazon is the most popular retailer to buy electrical goods
- Graph 25: retailers used to purchase electrical goods, 2024
- Amazon’s popularity is highest among older electrical goods buyers
- Graph 26: retailers used to purchase electrical goods, by generation, 2024
- Bring higher earners to stores by offering premium repair services and product upgrade schemes
- Apple Store and smaller specialists are strongly skewed towards younger, wealthier shoppers
- Graph 27: leading electrical goods retailers’ positioning by shoppers’ average age and household income, 2024
- Younger Millennials shop around for electricals
- Loyalty to a single electrical goods retailer increases with age
- Graph 28: repertoire of electrical goods retailers used, by generation, 2024
- Behaviours related to electrical goods
- Nearly three quarters of shoppers wait for items to be on sale
- Graph 29: consumer attitudes towards electrical goods, 2024
- Strengthen consumer engagement with higher circularity and sustainable product replacement
- Target families with loyalty schemes that allow them to upgrade devices
- Graph 30: consumers who have traded in used electrical devices, by household type, 2024
- Entice home office workers with attractive rental and bundle offers on more energy-efficient devices
- Graph 31: behaviours towards electrical goods, by work location, 2024
- Entice younger men with products from lesser known brands coupled with attractive credit options
- Graph 32: consumer behaviours towards electrical goods, by age group and gender, 2024
- Factors favouring one retailer over another
- Proximity to the home would entice nearly half of electrical goods shoppers to favour one retailer over another
- Graph 33: factors encouraging consumers to favour one retailer over another, 2024
- Whilst certain factors are relevant for all ages, after-sales support is particularly important to older shoppers
- Graph 34: factors encouraging consumers to favour one retailer over another, by generation, 2024
- Seduce Empty Nesters in-store with enticing promotions and expert advice
- Combining these factors is key to effectively attract shoppers who would otherwise shop with other retailers
- Flexible payment options are especially relevant for younger buyers
- Graph 35: factors favouring one retailer over another, by average age and income, 2024
- Entice older women to buy electricals with user-friendly support with installation and repairs
- Shoppers will better respond to one factor over another depending on where they shop for electrical goods
- Capture shoppers from the leading players with promotions and availability…
- …then retain them with loyalty rewards and the experience they find in-store
- Maximise engagement of younger shoppers with immediate loyalty benefits and rewards
- Shopping behaviours related to electrical goods
- Two thirds of shoppers want more transparency on product energy consumption
- Graph 36: consumer behaviours towards electrical goods, 2024
- Entice wealthier shoppers with smarter and more energy-efficient products
- Target younger shoppers’ willingness to upgrade their devices with loyalty schemes
- Target younger shoppers’ willingness to upgrade devices with loyalty schemes
- Graph 37: behaviours towards electrical goods, by generation, 2024
- Entice online shoppers with leasing schemes for exciting smart products to upgrade their existing devices
- Graph 38: behaviours towards electrical goods, by channel, 2024
- Specialists are most likely to capitalise on shoppers’ willingness to spend more to upgrade to smarter devices
- Graph 39: consumer behaviours towards electrical goods, by where they shop, 2024
- Win wearable tech shoppers over with full support on product demos, installation and troubleshooting
- Captivate electrical goods buyers with memorable in-store experiences
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RETAILER ACTIVITY
- Leading retailers
- Leading electrical goods retailers in Germany face a challenging time
- MediaMartk focused on its digital transformation recently but will continue to rely on physical stores
- Voluntary groups, Expert, Euronics and Electronic Partner, account for nearly 11% of the market
- Amazon and Conrad Electronic navigate the shift to online for electrical goods
- Brand specialists differentiate with cosier in-store environment that fosters browsing and purchase
- Market share
- Specialist retailer MediaMarkt/Saturn and Amazon share 41% of the electrical goods market in Germany
- Graph 40: leading specialist retailers’ estimated share of the electrical goods market, 2024
- Market share evolution
- Retail innovation
- Samsung offers smarter devices that make use of AI to help shoppers save money on electricity bills
- Renting over owning high tech products
- Samsung lets shoppers test-drive the Galaxy mobile phone experience for free
- Stores for lounging and browsing: from sterile warehouses to cosy atmospheres
- Trading in old devices at the Apple Store and regularly upgrading your iPhone
- Logitech G-Hub simplifies and enables a more personalised gaming experience
- Advertising and marketing activity
- Voluntary group Expert positions itself as the local electrical goods retailer
- MediaMarkt’s campaign on energy saving strongly appeals to consumers’ needs to keep costs under control
- Euronics’ “Just right” campaign relates to consumers’ wish for personalisation by understanding their exact needs
- Euronics’ “We understand each other” campaign also fosters the sense of understanding consumers individually
- MediaMarkt’s Christmas campaign draws on consumers’ need for troubleshooting support with their electronics
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APPENDIX
- Appendix – products covered, abbreviations, consumer research methodology and language usage
- Products covered in this Report
- Abbreviations
- Consumer research methodology
- Generations
- A note on language
- Appendix – Repertoire analysis methodology
- Repertoire analysis methodology
- Appendix – TURF Analysis methodology
- TURF Analysis methodology
- Appendix – market size and forecast methodology
- Forecast methodology
- Forecast methodology – fan chart
- Market size – value
- Market forecast and prediction intervals – value
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