2021
9
UK Electrical Goods Retailing Industry Report 2021
2021-03-23T03:03:52+00:00
OX1042525
2195
135744
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Report
en_GB
“Spending on electricals fell by 7% as it was hit by COVID-19 in 2020. This was underpinned by a sharp decline during the initial lockdown, a polarisation of demand and…

UK Electrical Goods Retailing Industry Report 2021

£ 2,195 (Excl.Tax)

Report Summary

Providing the most comprehensive and up-to-date information and analysis of the UK Electrical Goods Retailing market, including the behaviours, preferences and habits of the consumer.

A lot of retail markets saw heavy impacts due to the COVID-19 pandemic, and electrical goods was no exception. With the shutting of many retail outlets and the economic uncertainties faced by consumers, sales in household appliances, computers and telecoms fell sharply. The sector overall saw a spending fall of 7% throughout the year, ending the 5 years of consistent growth previously seen.

With extended periods at home and a shifted focus towards flexible living and homeworking, consumer spending behaviour changed rapidly. Sales in homecooking and baking electrical goods were boosted as people took up hobbies to pass the time, while there were significant losses in telecoms as people’s work habits changed.

This prioritisation of the home creates some interesting long-term implications for the market, as well as the acceleration of people shopping online. This could potentially lead to new market opportunities to improve online band presence, as well as implementing circular business models. While the economic uncertainties coming out of the pandemic could cause many to look for cheaper options, those who have saved during the crisis could be convinced to upscale to more premium goods.

Read on to discover more details or take a look at all of our UK Technology and Telecoms market research.

Quickly understand

  • The impact of COVID-19 for spending on the electricals.
  • How this disruption will change demand in the short, medium and long term.
  • Opportunities for retailers amid this disruption and extended periods inside.
  • The future of the purchasing journey and the growing role of online-only retailers.
  • How multichannel retailers, and particularly specialists, can boost market share, and revive the role of the store moving forward.
  • The opportunity for wellbeing and sustainability in the market.
  • Technological innovations to bridge the gap between multichannel retailers and housebound consumers.
  • The opportunity for increased engagement on mobile apps.

Covered in this report

Products: Mobile phones, kitchen and household appliances (small and large), television, desktop and laptop computers, personal care appliance, tablet computer, wearable technology, video games consoles, entertainment electronics, cameras, virtual reality headsets.

Brands: Amazon, Dixons Carphone, Currys PC World, Argos, eBay, John Lewis, Tesco, Ao.com, Apple Store, Asda, Sainsbury’s, Very.co.uk (Littlewoods), Carphone Warehouse, Debenhams, eBuyer, Co-op, Richer Sounds, Hughes Electrical, BrightHouse, Maplin Electronics, Euronic UK, Buy It Direct, Game Direct, EE, O2, Vodaphone, Three.

Expert analysis from a specialist in the field

Written by Jack Duckett, a leading analyst in the Consumer Lifestyles sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

While the lockdown periods have been challenging for all consumers, there can be little doubt that the closure of schools meant that families were among the hardest hit as many parents were forced to juggle home schooling and childcare responsibilities with the shift to working from home. But with modern life all too often cited as a barrier to quality family time, the silver lining of this time has been a renewed sense of family collectivism. This will prove to be a powerful sentiment for marketers in the coming months and years, with FMCG brands and travel/leisure operators all able to garner appeal by highlighting the central role their products and services can play in bringing the family together.

Jack Duckett
Associate Director – Consumer Lifestyles

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • COVID-19: market context
    • Impact of the January lockdown and the vaccination roll-out
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • Impact of COVID-19 on electrical goods retailing
      • Figure 1: Short-, medium- and long-term impact of COVID-19 on electrical goods retailing, 1 March 2021
    • The market
      • Figure 2: Consumer spending on all electrical products: market size and forecast (including VAT) [prepared 28 February 2021], 2015-25
    • Specialist sales hit as online pure players grow market share
    • Companies and brands
    • Amazon leapfrogs Dixons Carphone as leading electrical goods retailer
    • 20% year-on-year increase in online electrical sales in 2020
    • The consumer
    • Four out of five consumers made a purchase in the past year
      • Figure 3: Types of electrical products purchased in the past 12 months, November 2020
    • A year of unprecedented growth online
      • Figure 4: Channels of purchase, November 2020
    • Consumers still turn to the security of computers when purchasing online
      • Figure 5: Channels of purchase, November 2020
    • Mobile websites remain paramount in purchasing
      • Figure 6: Means of mobile purchasing, November 2020
    • Pure players extend their lead online
      • Figure 7: Retailers used online, November 2020
    • Supermarkets come to the fore on the high street, as department stores stutter
      • Figure 8: Retailers used in-store, November 2020
    • Electricals again top Black Friday purchases
      • Figure 9: Black Friday purchases, December 2020
    • COVID-19 has seen a fundamental shift in shopping behaviours
      • Figure 10: Changes in shopping behaviour, 19 February-1 March 2021
    • Extended periods inside opens a wealth of new demand
      • Figure 11: Purchasing behaviours since the outbreak, November 2020
  3. Issues and Insights

    • The short-term impact from COVID-19
    • Opportunities from polarised demand
    • The long-term impact from COVID-19
    • Ensuring the appeal of multichannel moving forward
  4. The Market – Key Takeaways

    • COVID-19 disruption sees sales drop by 7%…
    • …despite a wealth of new consumer opportunities
    • Ongoing polarisation of demand
    • Specialist sales hit as online pure players grow market share
  5. Market Size and Forecast

    • Sales fall despite new consumer opportunities
      • Figure 12: Short-, medium- and long-term impact of COVID-19 on electrical goods retailing, 1 March 2021
    • COVID-19 disruption sees sales drop by 7%
    • Spending falls sharply in initial lockdown
    • New opportunities amid extended periods inside
    • A polarisation of demand
    • Before recovering from 2022 onwards
    • Ongoing polarisation
    • The net-long-term benefit for online will advantage pure players
    • Continued COVID disruption
      • Figure 13: Consumer spending on all electrical products: market size and forecast (including VAT) [prepared 28 February 2021], 2015-25
      • Figure 14: Consumer spending on all electrical products: market size and forecast (including VAT), current and constant prices, 2015-25
    • Segment forecasts
      • Figure 15: Core electrical goods segments as a % of the total market, 2015-20
      • Figure 16: Total spending on core electrical goods segments, 2014-20
    • Market drivers and assumptions
      • Figure 17: Key drivers affecting Mintel’s market forecast (prepared 15 December 2020), 2015-25
    • Learnings from the last recession
      • Figure 18: Consumer spending on the home, 2007-12
  6. Market Drivers

    • The impact of the 2021 lockdown
    • Household appliance sales recover momentum but computing remains in the red…
      • Figure 19: Annual % change in all retail sales, electrical household appliance specialists and computers & telecoms equipment specialists, non-seasonally adjusted value series, January 2019-January 2021
    • …which is largely mirrored in volume sales
      • Figure 20: Annual % change in all retail sales, electrical household appliance specialists and computers & telecoms equipment specialists, non-seasonally adjusted volume series, January 2019-January 2021
    • Largely stable inflation eases potential disruption
      • Figure 21: Price inflation: annual % rate of change in core electrical categories, by month, May 2020- January 2021
    • House moves fall by 56.8% in April 2020…
    • …before picking up sharply
      • Figure 22: Number of residential property transactions with a value of £40,000 completed in the UK, January 2019-January 2021
    • Home-cooking and baking surges with restrictions
      • Figure 23: Changes to home-cooking, 26 March-16 April 2020
    • Uptake of credit falls amid uncertainty
      • Figure 24: Monthly consumer credit, excluding student loans, January 2018-December 2020
    • Christmas sales
      • Figure 25: What consumers give as Christmas gifts, 2018-20
  7. Specialist Sector Size

    • Specialist market share hit by disruption
      • Figure 26: Electrical goods specialists’ sector sales (including VAT), 2016-20
      • Figure 27: Electrical goods specialists’ sector sales (including and excluding VAT), 2016-21
    • Store numbers fall in 2020 with closures
      • Figure 28: Electrical specialists’ number of retail outlets, 2015-20
  8. Channels of Distribution

    • Online-only sees sharp gains due to the redirection of demand
    • Supermarkets come to the fore
      • Figure 29: Estimated distribution of spending on electrical goods, 2019 and 2020
  9. Companies and Brands – Key Takeaways

    • Slumping mobile-phone revenues hold back specialist leader Dixons Carphone
    • Significant uptick in online-only non-specialists’ electrical revenue
    • Amazon leapfrogs Dixons Carphone as the leading electrical goods retailer
    • 20% year-on-year increase in online electrical sales in 2020
    • Amazon outperforms all others when it comes to usage and customer experience
    • Livestream shopping and drive-thru click-and-collect to combat impact of COVID-19 disruption
    • Retail advertisers of electrical product adspend dives 15.1%
  10. Leading Specialists

    • Slumping mobile-phone sales hold back Dixons Carphone performance
    • Services and wearables boost Apple Retail revenue growth
    • AO UK sales driven by more consumers shopping online during lockdown and expanded product offering
    • Euronics UK (C.I.H) optimistic about future sales
    • Repair and refurbishing acquisition helps drive Buy It Direct revenue growth
    • Falling store sales hit Hughes Electrical revenue
    • BrightHouse call in administrators
      • Figure 30: Leading specialist retailers of electrical goods net revenues, 2015/16-2019/20
    • Revenue growth momentum with online specialists
      • Figure 31: Leading specialist retailers of electrical goods, CAGR of net revenues, 2015/16-2019/20
    • Falling sales and diminishing footfall force store closures
      • Figure 32: Leading specialist retailers of electrical goods, outlets, 2015/16-2019/20
    • Store-based sales expected to be hit hard by COVID-19 restrictions
      • Figure 33: Leading specialist retailers of electrical goods, estimated sales per outlet, 2015/16-2019/20
    • Pressure on prices and infrastructure investment drag down Dixons Carphone and Ebuyer profitability
      • Figure 34: Leading specialist retailers of electrical goods, operating profits, 2015/16-2019/20
    • Cost savings and revised pricing bolster Hughes Electrical and AO UK operating margin
      • Figure 35: Leading specialist retailers of electrical goods, operating margins, 2015/16-2019/20
  11. Leading Non-Specialists

    • Significant uptick in online-only retailers’ electrical revenue
    • Boost in gaming console sales benefit Game Digital
    • Digital sales drive supermarket and department-store electrical revenue during COVID-19 crisis
      • Figure 36: Leading non-specialist retailers’ estimated sales of electronic goods (excluding VAT), 2016-20
    • Predominantly store-based non-specialist electrical revenue growth lag online-only retailers
      • Figure 37: Leading non-specialist retailers of electrical goods, estimated CAGR of net revenues, 2016-20
      • Figure 38: Estimated Amazon and eBay total GTV/GMV electrical sales, 2016-20
    • Scaling back store presence
      • Figure 39: Leading non-specialist retailers of electrical goods, outlet numbers, 2016-20
  12. Market Share

    • Amazon and AO UK the biggest gainers in COVID-19 pandemic-driven market
      • Figure 40: Estimated market shares of the leading specialist and non-specialist retailers of electrical goods, 2020
      • Figure 41: Estimated market shares of the leading specialist and non-specialist retailers of electrical goods, 2018-20
  13. Mobile-Phone Specialists

    • The market
    • Network providers rethinking role of stores as sales migrate online
      • Figure 42: Estimated store numbers of the Big Four network providers, 2020
    • Falling service revenue drags on network providers’ performance
      • Figure 43: Leading network providers, financials, 2016-19
    • Carphone Warehouse sales slump
      • Figure 44: Dixons Carphone financial results, by trading segment, 2017/18-2019/20
  14. Online

    • COVID-19 pandemic accelerates online share of electrical goods sales to nearly 74%
      • Figure 45: Estimated online sales of electrical goods (including VAT), 2016-20
    • Online the dominant sales channel
      • Figure 46: Channels of purchase, November 2020
    • Amazon near-40% of all online electrical sales
      • Figure 47: Leading online retailers’ estimated share of online spending on electrical goods, 2020
  15. Launch Activity and Innovation

    • Comet relaunches as an online-only brand
    • Chinese ecommerce giant considering UK store launch
    • Online electrical specialist AO launch physical stores
    • Sky launches its first ever bricks-and-mortar retail shop
    • Livestream electricals shopping
    • Giving unwanted devices a second life
    • Currys PC World’s ‘Go Greener’ tech initiative
    • Zero-contact one-hour drive-thru click-and-collect service
    • Pop-up retro video game store
  16. Advertising and Marketing Activity

    • Total sector adspend falls 15.1% year on year in 2020
      • Figure 48: Total recorded above-the-line, online display and direct mail advertising expenditure by UK retail advertisers of electrical products, 2016-20
    • DSG Retail is the sector’s biggest advertising spender for a fifth consecutive year
      • Figure 49: Leading UK retail advertisers of electrical products: total recorded above-the-line, online display and direct mail advertising expenditure, 2016-20
    • Sector adspend highest around Black Friday and Cyber Monday
      • Figure 50: Total recorded above-the-line, online display and direct mail advertising expenditure by UK retail advertisers of electrical products, by month, 2019-20
    • TV accounts for the biggest share of sector advertising spend
      • Figure 51: Total recorded above-the-line, online display and direct mail advertising expenditure by UK retail advertisers of electrical products, by media type, 2016-20
    • Nielsen Ad Intel coverage
  17. Brand Research

    • What you need to know
    • Brand map
      • Figure 52: Attitudes towards and usage of selected brands, December 2020
    • Key brand metrics
      • Figure 53: Key metrics for selected brands, December 2020
    • Brand attitudes: Amazon and AO provide a great online service
      • Figure 54: Attitudes, by brand, December 2020
    • Brand personality: Currys PC World ethically minded, Argos accessible
      • Figure 55: Brand personality – macro image, December 2020
    • John Lewis stylish
      • Figure 56: Brand personality – micro image, December 2020
    • Brand analysis
    • Amazon: an excellent customer experience and recommended by those that have used it
      • Figure 57: User profile of Amazon, December 2020
    • Apple Store innovative and a brand worth paying more for
      • Figure 58: User profile of Apple Store, December 2020
    • John Lewis & Partners trustworthy and reliable, but lacks excitement
      • Figure 59: User profile of John Lewis & Partners, December 2020
    • AO.com untrustworthy and not a retailer worth paying more for
      • Figure 60: User profile of AO.com, December 2020
    • Argos good value for money and accessible
      • Figure 61: User profile of Argos, December 2020
    • Currys PC World authoritative and ethically minded but an unenjoyable experience
      • Figure 62: User profile of Currys PC World, December 2020
  18. The Consumer – Key Takeaways

    • The surge in flexible living opens a wealth of new demand
    • But demand has polarised
    • A year of unprecedented growth online
    • Strengthening online pure players but also raising questions over multichannel
    • The need for more engagement via mobile apps
  19. Impact of COVID-19 on Consumer Behaviour

    • Anxiety eases off slightly following third lockdown spike
      • Figure 63: Extremely worried about exposure to COVID-19/coronavirus, 8 December 2020-1 March 2021
    • A fundamental change in shopping behaviours
    • Older consumers lead the shift in behaviour
      • Figure 64: Changes in shopping behaviour, by age, 19 February-1 March 2021
    • The sector could be buoyed by redirected spending
      • Figure 65: Spending, by sector, 19 February-1 March 2021
  20. Electricals Purchased

    • Four out of five consumers made a purchase in the past year
      • Figure 66: Electrical products purchased in the past 12 months, November 2017-20
    • Phones still lead the way despite decline
    • Extended periods inside underpin new growth
    • The focus on wellbeing moves within the home
      • Figure 67: Types of electrical products purchased in the past 12 months, November 2017-20
    • Older shoppers turn to appliances
      • Figure 68: Types of electrical products purchased in the past 12 months, by age and socio-economic group, November 2020
  21. In-Store vs Online

    • A year of unprecedented growth online
    • But decline on the high street raises questions of the future of stores
      • Figure 69: Channels of purchase, November 2020
    • Online dominates in every product category
      • Figure 70: Purchases by channels of purchase, November 2020
  22. Channel of Purchase Online

    • Consumers still turn to the security of computers
      • Figure 71: Channels of purchase, November 2020
    • Older shoppers look to the security of computers online…
    • …while younger shoppers are happy using smaller devices
      • Figure 72: Channels of purchase, by age, November 2020
  23. The Continued Rise in Mobile Purchasing

    • Mobile purchasing varies by price
      • Figure 73: Purchases by channels of purchase, November 2020
    • Mobile websites remain paramount
    • One third bought via mobile apps
    • But this was hit by disruption in the past year
      • Figure 74: Means of mobile purchasing, November 2020
    • But retailers must boost engagement with apps
    • Attracting new customers
    • … and re-engaging lost ones
    • Younger consumers spearhead app use
      • Figure 75: Means of mobile purchasing, by age, November 2020
    • A renewed opportunity for social media
      • Figure 76: Sources of inspiration/alternative purchasing platforms, April 2020
    • The pivot from influence to direct consumers…
    • …could see social-media companies become major players in the market
  24. Retailers Used Online

    • Pure players extend their lead
    • But specialists continue to offer an important alternative
      • Figure 77: Retailers used online net, November 2020
    • Amazon’s dominance grows
      • Figure 78: Retailers used online, November 2020
  25. Retailers Used In-Store

    • Supermarkets come to the fore…
    • …as department stores stutter
      • Figure 79: Retailers used in-store net, November 2020
    • Currys PC World remains king of bricks and mortar
      • Figure 80: Retailers used in-store, November 2020
    • How to ensure the continued relevance of the store post-disruption
    • First-person advice
    • Serving newer areas of interest
    • Online shoppers migrate across retailers
      • Figure 81: Repertoire analysis of retailers used in-store net, November 2020
  26. Black Friday

    • Two fifths made a purchase during promotions
      • Figure 82: Black Friday methods of purchase, December 2020
    • Electricals topped total purchases
      • Figure 83: Black Friday purchases, December 2019 and December 2020
    • But promotions continue to displace demand
      • Figure 84: Attitudes towards Black Friday 2020, December 2020
  27. COVID-19 and Electrical Goods Retailing

    • Two thirds have made a purchase since the outbreak
      • Figure 85: Purchasing since the outbreak, November 2020
    • Extended periods inside opens a wealth of new demand
      • Figure 86: Purchasing behaviours since the outbreak, November 2020
    • Technological innovation remains limited to younger buyers
      • Figure 87: Purchasing behaviours since the outbreak, November 2020
    • Purchasing behaviours reveal the polarisation of demand
      • Figure 88: Purchasing behaviours since the outbreak, by socio-economic band, November 2020
  28. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  29. Appendix – Market Size and Forecast

    • Forecast methodology
      • Figure 89: UK value of spending on electrical products: best- and worst-case forecasts [prepared 28 February 2021], 2015-25

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This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

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