Home Blog 2020 Remote Working and Learning Have Led to Unprecedented Growth in the Consumer Technology Industry in Canada, but will the Momentum Last This Holiday Season?
Nov 25, 2020

Remote Working and Learning Have Led to Unprecedented Growth in the Consumer Technology Industry in Canada, but will the Momentum Last This Holiday Season?

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It’s no secret that the holiday season is one of the most important times of the year for electronics spending in Canada. While 2020 has certainly presented its fair share of challenges for retail in general, consumer technology is well positioned to finish the year off strong. For the year to date ending October 2020 total technology sales are 20% ahead of last year.

Looking at the 10 months of sales in 2020 compared to the entire 12 months in 2019 we see that technology is only -14% behind the total 2019 number. What does this mean for the industry? Essentially, even if the last two months of the year are flat to last year, tech sales will be 14% ahead of 2019. However, based on the growth we have seen since May I think we will see an even better close to the year.

2020 Leaders and Laggards

So far this year there are 35 categories that have already surpassed their 2019 volumes. Some of the categories ahead of last year include notebook computers, desktop computers, inkjet and laser multi-function printers and a number of the work from home categories such as monitors, mice, keyboards and webcams. The common thread throughout these categories is that they all enable the ability to work and learn remotely, an obvious requirement for 2020.

The largest category tracked by NPD, notebook computers, is already 9% ahead of total 2019. Notebooks have seen explosive growth since the middle of March with a number of weeks seeing nearly 2x units sold over last year. Based on this trend, notebooks should continue to grow through the holiday season but even if sales are flat for the last two months of the year notebooks sales will be up 39% over 2019.

LCD TVs have been another hot category with many strong growth weeks this year. Currently, YTD sales are 25% ahead of last year. Compared to total 2019, YTD sales are -24% behind as we head into the last two months of the year which typically represent about 40% of annual sales. Obviously, this is going to be a strong holiday for TVs as consumer spending has already been directed towards a category that only heats up in the final months of the year.

There are, however, some struggling areas that have been hurt rather than helped by the pandemic. Mobile phone accessories have been struggling since the beginning of lockdown. Year-to-date sales are -17% behind last year. While this is quite a negative number, many of these categories experienced weeks of more than -40% declines back in March. In recent weeks, sales in this area are more similar to last year and average selling prices have started to climb. The launch of new phones has helped but many categories are dependent on consumers getting out into the world; the need for power on the go and protection from damage.

Digital imaging was also hit hard at the start of the pandemic and YTD October sales are currently -18% behind last year. Sales have improved and in the last 3 months ending October sales are 9% ahead of last year. If this growth rate continues through the holiday period, we could see the year wrapping up around -11% which is in the same ballpark as the -9% decline in 2019. Not ideal but a vast improvement on the situation we were in back in March.

Looking Ahead

While 2020 has undeniably been a challenging year for many retail verticals in Canada, consumer technology has managed to weather the storm quite well. Despite increasing retail restrictions across much of the country, I expect that we will continue to see strong sales as we head into the key holiday season. Furthermore, the current timeline for widespread vaccine distribution in Canada also suggests that we will be living with this “new normal” well into 2021, which bodes well for several of the growth categories mentioned above.

 


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