Home Blog 2019 Brands Must Look Beyond Tech Enthusiasts to Find Growth in a Competitive Landscape
Sep 4, 2019

New Buyers Will Power Tech’s Growth

Subscribe to our blog

For years, the technology industry has coveted tech enthusiasts – those consumers who spend the most on technology the soonest after it is released. And for good reason- the highest spending shoppers, a group making up just 10 percent of all tech buyers online, account for 50 percent of e-commerce technology spending, according to NPD’s Checkout data. This tremendous buying power combined with their status as technology mavens naturally makes these consumers a coveted online customer segment.

Targeting these high-value shoppers online has been a successful strategy for brands, particularly in years when household adoption of tech was growing sharply. However, today, overall tech ownership is nearing a saturation point, particularly in high-volume categories, such as tablets and smartphones.  Though the consumer technology market is forecast to grow 3 percent over the next 24 months, according to NPD’s Future of Tech report, market growth is being fueled by just a few product categories and brands. Given that we are seeing the hallmark signs of slow growth and maturity, brands must be more strategic in order to find growth.

One way to grow in today’s environment is to target new groups of shoppers. In contrast to heavy technology spenders who are likely to be saturated with tech products, light spenders generally own less tech. They are also just as likely to shop many of the same major e-commerce sites all consumers go to and the non-tech related sites they shop point to their lifestyle interests, which present opportunities to reach these buyers with tech messaging in new ways. Further, light tech spenders actually increased their spending on technology products over the past year by 38 percent while heavy spenders spent 30 percent less.

The types of products commonly purchased by these groups are likely impacting this dynamic. Heavy spenders over-index for purchases of higher priced technology products like notebook PCs and TVs – products that are purchased infrequently. By comparison, light spenders show a higher likelihood to buy mobile and wearable device accessories as well as consumables – products with lower average selling prices that tend to be purchased more frequently. Light spenders still buy and own the high-priced technology products we all do, however their spending is led by lower ticket products. Reaching these consumers at the times they are buying high ticket technology products requires that marketers be more strategic in when and where they are reached.

New product categories are also changing this dynamic. According to Checkout, 16.5 million shoppers purchased a home automation product online in the last 12 months. Among them, 74 percent or around 12.1 million buyers were light technology spenders for whom a marketing plan targeted to high spenders’ online shopping habits and browsing behaviors is likely to miss. Categories that have entered the market more recently, such as home automation, gaming, and wearables are engaging non-traditional technology buyers and helping to diversify the technology customer profile.

The quest for growth in today’s technology market has placed an intense focus on market share wins, but gaining a greater share of buyers is equally important in driving new sales. Tech’s biggest spenders will remain the primary focus for a lot of brands; however, competition for these high-value shoppers will only increase in this mature market. Companies looking to grow can continue to compete with the rest of the industry for the same buyers, or look to new segments of shoppers for growth. With tech now a virtual necessity of everyday life, consumers of all spending levels should be a potential target.  



Upcoming Event


Future of Technology

Presenter: Ian Hamilton, President, Technology Sector; Stephen Baker, Vice President, Industry Advisor, Technology & Mobile; and Ben Arnold, Executive Director, Industry Analyst, Consumer Electronics.
Date and Time: January 8 at 1:00 p.m. ET
Location: Virtual
Description: We will release our latest forecast through 2022 and explore tech’s success in 2020. Hear about the importance of remaining agile in a still-uncertain environment.

Register Now

Stay current in your industry
SUBSCRIBE

Related Content

Tagged: Consumer Electronics , E-Commerce


Hear the Difference: Audio Trends in North America
Hear the Difference: Audio Trends in North America

We’re turning up the volume on differences in audio trends across the U.S., Canada, and Mexico. Marketers in the tech industry can explore our Retail Tracking Service data to understand that what works in one part of North America may not be the solution in another.

Piecing Together a Retail Roadmap for 2021
Piecing Together a Retail Roadmap for 2021

There will be some level of recovery in 2021, but much uncertainty remains. But this knowledge can help retail prepare for consumer shifts that will emerge.

Emerging Tech Categories See Strong Growth As Consumers Seek New Forms of Entertainment
Emerging Tech Categories See Strong Growth As Consumers Seek New Forms of Entertainment

In a year where social distancing and safety measures kept many Americans home more than usual, the consumer tech industry experienced strong sales in categories that kept people connected and entertained. Read on to find out what categories saw strong interest.

NPD Forecast: Historic U.S. Consumer Technology Sales in 2020 Set the Stage for Long-Term Industry Expansion
NPD Forecast: Historic U.S. Consumer Technology Sales in 2020 Set the Stage for Long-Term Industry Expansion

2020 was a year of historic growth for the U.S. consumer tech industry and NPD’s latest Future of Tech report forecasts this momentum will continue into the first quarter of 2021. Find out more about NPD’s expectations for consumer tech sales through 2023 in this piece.

Newsletter

Subscribe and get key market trends and insights relevant to your industry each month.

We will not sell your information. View privacy notice. | Cookie Settings