In home, the car, and the office – consumer electronics are used everywhere, all the time. The devices consumers use are changing rapidly, as are consumers’ preferences. The features they want are converging. And it’s all happening in the midst of some of the highest device-ownership levels we’ve ever seen. To top it off, this is occurring in a mature market.
How do you make sense of it all and drive growth for your business? NPD has been tracking and analyzing trends in the consumer electronics market for more than 25 years, offering both retail and consumer information for all channels, including the Web. You can use this information to understand the rapidly-evolving product landscape and consumer electronics trends at the national and local market levels.
Beyond market measurement, we combine our robust data assets and industry expertise -- including your own data or third-party data, as needed -- to address specific issues at each phase of your business cycle from opportunity identification to marketing evaluation and pricing optimization.
The Retail Tracking Service monitors retail sales of consumer technology products. Data provided by our participating channel partners delivers a detailed picture of product movement down to the item level. National information is available weekly and monthly; local market information is available monthly.
Store-Level Enabled Retail Tracking
Store-Level Enabled Retail Tracking complements our national Retail Tracking Service– it can help you determine whether sales are distribution-driven or whether certain parts of the country are contributing more to national share or driving growth. The velocity measure set that is part of Store-Level Enabled Retail Tracking takes into consideration sales volume (Annualized Industry Volume or AIV) rather than considering store count alone, for a more meaningful read on where products are selling and how they are performing.
Account Level Reports
These reports enable retailers who choose this option to share their information with approved vendors, allowing vendors to analyze business performance at specific retailers down to the item level in many instances. By making this report available to their vendors, retailers can work together with them to optimize performance. These reports may only be made available with the express permission of the retailer.
Explore comprehensive market research on consumer behavior and attitudes across a wide array of industry sectors. This service provides a total market view, encompassing activity at all retailers including Walmart. It delivers critical insights into market trends, demographics, and customer satisfaction to help companies address the challenges of market sizing, competitive analysis and response, new product development, product positioning, and more.
Checkout Tracking℠ provides information on consumer buying behavior at the market basket level, based on receipts for brick-and-mortar retail purchases. You get precise, item-level purchase detail that is linked to buyers and their demographics. Data comes from large-scale longitudinal panels, making it possible to study the same consumers over time, analyze competitive market baskets, and identify purchase patterns.
You have opportunities. You face threats. What you need are smart, quantifiable methods of distinguishing one from the other and maximizing your chances of success. NPD’s Analytic Solutions Group includes a team of senior leaders with extensive experience developing and delivering analytic solutions that address strategic marketing, sales, and planning issues.
We combine NPD POS and consumer information, industry expertise, and custom survey research – then add state-of-the-discipline research techniques and methodologies to explain the "why behind the buy.” Through advanced modeling and analytic services, we offer insight into what will happen in the future, not just what has happened in the past, answering your most pressing business questions:
- What consumer segments should we target and why? How do we know if we’re successful over time?
- What is the optimal feature combination for my product?
- How do I monitor my performance in my sales territories, distribution areas, etc.?
- Is your promotion strategy attracting new buyers or just moving forward sales you would have gotten anyway?
- How will a competitor’s price drop impact your sales next quarter, and how should you respond?
- Will my product category grow or decline? Why? What does this mean for my market share?
- What’s the competitive landscape and where are my best opportunities (Food)?
- Which products are hot? How should we respond?
- What’s the sales potential and ROI for my new / revamped product idea?
- Is our online advertising set up for off-line sales success?
- How effectively will a new in-store display we’re developing boost point-of-sale transactions?
- Which of the new communications we’ve worked so hard on communicates the product’s value proposition most effectively?
See how clients have used our analytic solutions to solve their business challenges in our Analytic Solutions Case Study Library.
The tablet market is beginning to mature after explosive growth following the device’s introduction. The tablet is now an integral part of the typical American household’s electronics inventory. Our new Tablet Accessory Inventory Report evaluates tablet accessory purchasing and ownership, providing fresh insights straight from consumers and our industry analysts.
Kids and Consumer Electronics, 2014 Edition delivers new insight on the significant role consumer electronics products play in children’s lives — and how it’s changing, with trended insights back to 2011. Looking at ownership and usage among kids ages 4 to 14, the report covers of a host of consumer electronics products — from smartphones and tablets to gaming consoles and TVs. Discover the frequency with which kids use these devices, the average age they begin using them, and more.
What's Driving Consumer Behavior? Our new consumer technology reports explore the products and market trends that matter to your business right now. These timely reports can help you navigate the fast-moving CE and IT landscape.
The VAR channel represents significant business potential. Now you can get a picture of this elusive technology market! Our VAR Tracking Service delivers detailed monthly sales information with views at the category, brand, item, and feature levels.
Turntables are seeing renewed consumer interest as evidenced by double-digit growth in both U.S. dollar (16 percent) and unit sales (23 percent), for the 12 months ending February 2017 versus year ago, according to global information company, The NPD Group. Premium products were a key contributor to sales growth, as dollar sales of turntables priced above $250 grew 135 percent in the 12 months ending February 2017, accounting for 11 percent of total sales. An expanding number of entry-level products also aided the market increase, as evidenced by a six percent decline in average selling price.
Year over year, the number of homes with an installed connected TV device increased by six million, now totaling 60 percent of U.S. internet homes, according to the NPD Connected Intelligence Connected Home Entertainment report. As the number of connected TV homes continues to grow, the devices used to make those connections have shifted. In January 2017, streaming media players were the most commonly installed internet-connected TV device. Thirty-five percent of U.S. internet homes now have a streaming media player, up from 29 percent last year.
According to global information provider, The NPD Group, U.S. dollar sales of drones more than doubled in the 12 months ending February 2017, with a 117 percent increase year-over-year. While premium drones (priced $300+) fueled revenue growth, increased distribution and assortment during the holiday season helped drive unit demand for drones priced between $50- $100.
In 2017 the Tech Industry Will Return to Growth for the First Time Since 2010, According to a New Forecast from The NPD Group
Global information company, The NPD Group, today shared insights from a new, 24-month technology industry forecast, predicting a return to growth for the U.S. market in 2017 for the first time since 2010. Covering over 100 technology categories, NPD is forecasting* a nearly two percent increase in technology industry sales in 2017 versus 2016.
238 Million Installed Internet-Connected TV Devices Expected by 2019, According to NPD Connected Intelligence
According to the NPD Connected Intelligence Connected Home Forecast, by the end of 2019, 238 million installed devices are expected to be connected to the Internet and able to deliver apps to TVs, representing 59 percent growth from 2015 to 2019. Connected TVs are projected to drive 45 percent of the growth over the coming four years, while less expensive, content-heavy streaming media players are projected to drive 35 percent growth.
Unlocked Mobile Phones Account for 12 Percent of the U.S. Market with Growth Expected to Continue, According to a New Report from NPD Connected Intelligence
According to the new Unlocked Phone Demand Report from NPD Connected Intelligence, the unlocked mobile phone market is growing rapidly with an estimated 28 million consumers owning an unlocked device in the U.S., accounting for 12 percent of the market. Additionally, due to limited options available in-store, half of all unlocked phones (51 percent) are being purchased online – a notable deviation from locked phone purchases which traditionally take place in-store. By comparison, 74 percent of locked phones are purchased in stores/kiosks.
Global information company, The NPD Group, today announced that it has expanded its Retail Tracking Service to provide a view of virtual and augmented reality headset sales. The new service is the first to provide retailers and manufacturers with sales data in this emerging category and will include data dating back 12 months.
Growing Consumer Interest in 4K UHD TVs and 4K UHD Streaming Media Players Indicates an Impending Shift from Early Adopter to Mass Market Audience
With awareness and interest on the rise, this holiday season could mark the shift in the 4K Ultra-High Definition (UHD) TV consumer base from early adopter to mass market audience. According to The NPD Group Connected Intelligence Home Entertainment Report, 2016 has seen steadily growing consumer interest regarding 4K. In fact, 38 percent of those surveyed said they are very, or somewhat, likely to use a 4K TV in the future, an increase of five percentage points since Q1 of this year.
NPD Highlights: Consumer Tech for the Holidays
Whether at home or on-the-go, Millennials are leveraging their smartphones increasingly across a number of activities. From Q2 2015 to Q2 2016, the number of Millennials reportedly using their smartphones for video calling has increased 14 points (to 56 percent), for shopping has increased 10 points (to 59 percent), and for video streaming has increased 9 points (to 40 percent), according to The NPD Group Connected Intelligence Application & Convergence Report.
Store-Level Enabled Retail Tracking: How BodyGuardz Proved its Growth Potential and Won More Distribution
With shelf space in a large wireless retailer and strong direct-to-consumer sales results, BodyGuardz set its sights on increasing in-store distribution to reach additional consumers and continue to grow brand awareness. To prepare for discussions with retailers, the company wanted a more in-depth view of the competitive cell phone accessories category and partnered with us to make its case.
In-Store Display Compliance Analysis: How The NPD Group and Mobee Identified a $40+ MM Revenue Opportunity for GoPro
GoPro, a leading consumer electronics brand and maker of world-class cameras, invests heavily in merchandising its products through specialized in-store displays across thousands of retailer locations. In order to maximize their intended impact, these displays need to be fully executed and fully functional. Unfortunately, broken and incomplete displays are a fact of life in retail. In order to generate buy-in from retail partners, GoPro needed a credible, trustworthy estimate of sales dollars lost as a result of incomplete compliance.
How a New Measure, Store-Level Enabled Retail Tracking, Will Change Your Business
The United States business-to-business channel and Canadian distribution market closed the fourth quarter flat at 0.2 percent and up 6.3 percent year-over-year, respectively. Our industry analysts have identified key trends and categories to watch in the U.S. and Canada, including notebooks, large format commercial displays, tablets, and solid state drives.
Millennials in the U.S. are known to be frugal — they’re careful about where and how they spend their limited income. And while they shop more frequently at brick-and-mortar retailers, they spend more when they shop online
Store-Level Enabled Retail Tracking: How a Headphone Manufacturer Grew Sales by Expanding Distribution
Recently, a consumer electronics manufacturer approached us in its effort to grow its headphone business. It needed a retailer to carry its latest headphone model, but there was just one problem: the item’s overall sales and market share were lower than that of competing brands. Even so, our client knew it had a winner. This client asked us, “How can we convince the retailer to carry our headphones in its stores?”
While HP, Inc. has a strong track record of measuring marketing campaigns using existing modeling and analytics, they wanted to run a market test to quantify ROI on these campaigns and project returns on future campaigns at a national level. In this case, HP, Inc. wanted to look at the entire printing ecosystem, including consumables and hardware . . .
A leading IT manufacturer wanted to know more about its business with VARs. Specifically, this client asked NPD to show how often its products sold as standalone or single items on an invoice vs. multi-line. NPD helped the client get to the bottom of it, revealing where to focus with VARs and how to add more to the VAR “basket".
Drones are one of the technology industry’s brightest stars right now, with nearly 300% growth in the course of a year. But it’s been a challenge to get a handle on the details of that remarkable growth – who’s buying, which brands are winning, what accessories the drone customer wants. Only The NPD Group can tell the story of this emerging – and exciting – category. Here’s a look at the latest insights.
Drones represent excitement and innovation in the U.S. technology industry. It’s a story of rapid growth, and the story is still unfolding. Only The NPD Group can show you how high drones have flown. Here’s a look at the latest insights.
Insights and Opinions from our Analysts and Experts
Spring is making a late arrival in New York this year, and the delay is beginning to take its toll. Last week, as I prepared to drive back from the warm, balmy air of Virginia towards New York, I decided to take the top off of my Jeep for a taste of spring. Despite knowing it was a rainy day back home, I took my chances and tried to judge how far I could push it before pulling over to put the roof back on.
Naturally, I sought the advice of my smartphone’s digital assistant. After all, this seemed like the perfect task for a product that everyone tells me is clever and packed with intelligence, albeit of the artificial variety. Silly me. What I thought was a simple question: “When will I encounter rain on my journey,” or even better, “Warn me 15 minutes before I will encounter rain,” left my digital assistant confused and, sadly, referring me to a variety of websites that could not answer my question. Besides, I was driving and hands-free is the only option. I did not seek a website; I wanted an answer. In the end, my digital assistant let me down…and I may have gotten a little damp on the ride home.
A couple of years ago, I probably wouldn’t have expected a useful result from a digital assistant, but I’ve been slowly persuaded to think bigger. We’ve gone from positioning these ‘assistants’ as simply being a voice interface to something rather more intelligent that, when asked a question, will provide an answer.
I would posit that there are a couple of different issues that lead to consumer disappointment. First is the over-hyped nature of artificial intelligence that’s now promised in almost every tech device. Second, I suspect, is that there needs to be a greater break with the ‘old’ technology that is within the smartphone. The smartphone gained its place in our hearts because it provided access to the internet via websites and apps. As such, there’s a tendency for the new assistants to leverage those sources as legitimate answers, rather than assuming that you want the actual answer immediately.
I expect big changes in the next year or so, as digital assistants migrate from smartphone-based solutions to a plethora of devices, such as wearables, that don’t have large screens. Without these screens, the creator mindset will have to change significantly. Indeed, one could argue that we’re already seeing that; Alexa and Google Home were originally designed around a speaker, not a screen, but both have the safety net of a smartphone app for more complex questions. To continue to evolve, manufacturers and developers will need to eliminate the reliance on a screen – even as a fall back – and enable digital assistants to operate without them.
The winner(s) in this space are by no means a done deal (even though Alexa has a head-start in terms of third-party integration), and failure to fix the issues will lead to mediocre use of any digital assistant beyond the simplest of tasks. But, maybe that’s okay in the near-term, as long as we all stop over-selling the products, promising the impossible. After all, we are very much programmed to work around our phone’s limitations, rather than the other way around. Take for example, the man I encountered at a Starbucks on the drive back to New York. He was busily restarting his phone and re-entering his password so that he could purchase a coffee using an app. Cash or credit would’ve been far quicker and easier... but where’s the fun in that?
Have you streamed video? Of course you have, as the majority of U.S. homes subscribe to a streaming service such as Netflix, Amazon Video or Hulu.
Have you watched programming on a 4K TV? Maybe, as 15 million U.S. homes already have one.
Have you streamed a 4K video on that TV? The odds are probably higher than you think. Here’s a quick overview of the landscape… bottom line is, the ability to stream 4K video content is ramping up fast.
4K UHD TV sales are accelerating rapidly and the resulting installed base tripled over the past year. In fact, a majority of consumers that purchased a 55-inch or larger TV during 2016 opted for a 4K model. But for 4K streaming content to reach viewers, they must also have enough bandwidth. Generally, consumers need a steady Internet speed of at least 25 Megabits per second (Mbps) for 4K content streaming.
Source: The NPD Group, Inc. / Retail Tracking Service;
NPD Connected Intelligence Connected Home Entertainment Report – January 2017
To observe viewer’s in-home Internet speeds a broadband speed test was embedded into our surveys. This does not track the speed consumers pay for, but how much they get throughout the day, as the average home has eight connected devices that may be eating up bandwidth.
The net result showed that approximately six in ten 4K TV homes have fast enough Internet speeds to stream 4K video – totaling nine million households. The growth in 4K TV sales and fixed broadband speeds enabled this audience to grow from only 2.4 million homes one year ago... And the projections for the next few years, well, that chart looks like a hockey stick.
Here we are at the start of 2017, years removed from the time when many analysts would not hesitate to tell anyone that would listen that the days of consumers printing are coming to an end. Yet when we look at the past year Canadian consumers spent $1.1B at retail to support their printing needs, a four year high. In fact this past year Canadians spent $13M more than the previous year based on NPD’s Retail Tracking Service.
Personally I find that I am not printing at the same level at home as I would have in the past but as the designated IT buyer within our household I find that my print shopping excursions remain steady. Despite our household relying more and more on non-traditional PC devices within the home, there still exists that printing need. Based on NPD’s most recent sales results my home apparently is no different than many other homes across Canada.
What is most interesting about the latest results is that every printing category tracked this past year has shown an increase in revenue. Printer Hardware sales in the past 12 months experienced an increase in revenue of $6.5M; Inkjet Cartridges sales are up $4.4M; Toner up $1.1M and Technology Paper up just under $1M. One factor that needs to be considered with these higher revenue results is the higher prices due to a weaker Canadian dollar. Across the board we do see each segment showing an increase in pricing however printer hardware unit sales this past year are only 1% less than they were four years ago. This slight decline along with positive revenue results for Hardware, speaks to the continued need from consumers to replace or add a printer for their home or small business.
Everything indicates a healthy market this past year and although we are probably not set to see double digit printing growth moving forward we are not seeing the significant decline once thought as being inevitable. The printing market will remain a top revenue generating segment for retailers and manufacturers alike as we move through 2017 and beyond.
Even though we are just casual NFL fans in my house, the Super Bowl is still an exciting event for us. This year, my wife and kids are looking forward to Lady Gaga’s halftime performance – and they’ll probably even check out the Puppy Bowl. I always watch the entire Super Bowl; however, I find the big-budget commercials to be more memorable than the game itself each year. Such is life as a fan of the perennial 7-9 team in Washington D.C.…
Regardless of one’s team affiliation, Super Bowl week is a net positive for the big screen TV market. For consumers, of course, it’s about getting a good deal. Last year, during the week leading up to Super Bowl L, the average selling price for a 55-inch flat panel TV was $738, $40 lower than the preceding 12-month average and the lowest level seen for the 52 weeks ending that week, according to The NPD Group’s Weekly Retail Tracking Service. Prices for 4K TVs were attractive during the week leading up to last year’s Super Bowl as well, averaging $962 for a 55-inch set, 11 percent lower than the 12-month average. This level of price promotion achieved its desired effect, driving a 25 percent increase overall in 55-inch unit sales for the 2016 Super Bowl week over the same week a year prior.
The markets of the teams who make it to the Super Bowl see a lift in sales before game day, too. Last year, February sales of TVs 55 inches and above grew in both Charlotte and Denver by 47 percent over the same month a year prior (nationally, sales grew by just 30 percent). Similar to last year, this year’s game pits a perennial favorite, New England, against a team that hasn’t been in the big game since 18 years ago, Atlanta. For that reason, I expect to see a sharp increase in unit sales, especially in Atlanta this year. Falling prices and new technologies like HDR and OLED will also continue to help drive increased sales in these markets, as they have nationally throughout the past year.
No matter what your rooting interest this weekend, Super Bowl LI looks to be another promising event for the TV market. For bargain hunters, the big game provides Black Friday level pricing on many size segments, while those looking to upgrade their primary set to the latest and greatest technology can find deals from many of the top-tier TV brands. Add to this one powerhouse, big-market team and another who hasn’t been to the Super Bowl in almost a generation and you have the makings for another successful TV sales event.
2016 ended with a mixed bag of holiday sales and proved to be a very uneven year overall for the CE space. As we near the end of the first month of the new year, we’re stopping to reflect on some of the positive momentum of 2016, as well as looking ahead towards what key technologies, categories and products might change the direction of the tech hardware markets this year (and beyond).
It is fair, I believe, to view 2016 as mostly a transition year; one in which the industry and consumers were introduced to the potential of new categories, new technologies, and new business models. Viewed from that lens, 2017 is shaping up to be a tipping point year - a year where new technologies will prove their worth or begin to fade away. A year where products will move into the mainstream, or miss their mark and where some level of consistency in demand around new business models will need to be confirmed. From a technology standpoint, the optimistic view is that 2017 appears to be the start of what we experienced in 2009-2011, where new products, new technologies and new use cases provide a burst of opportunity and excitement for the market. Looking back, those years saw the explosion of the iPhone and flat panel TVs, the beginnings of the deployment of LTE, the introduction of the iPad and the netbook, and the first indications of the re-invention of audio. It also represented peak camera, GPS, MP3, and printer sales, and should serve as a cautionary tale that technological change goes both ways.
NPD’s recently-distributed tech industry forecast reflects this exciting (and scary) outlook. Looking ahead over the near-term, we see a slim 2 percent increase for 2017. That represents a reversal of the worst of the industry’s maturity-based stagnation with the promise that today’s most interesting new technologies will begin to provide the momentum that has been sorely lacking in an older, heavily-saturated hardware environment. But that forecast comes with its own risks and rewards. The past year saw an explosion of business models focused on reversing the saturated view of mature markets by refocusing those businesses on premium products and solutions, and away from a volume-based, entry-level focus. PCs were the harbinger of that, driven by the incredible growth in gaming, the rise in average sales prices overall, and the renewed focus on premium products (not just in price, but in fit, finish and design as well). 4K provided some of that same momentum to TVs, helped along by the growing interest in large screens. But the fall in pricing, and the shift by some consumers back to legacy sizes and products (often fueled by pricing), put a damper on revenue growth. Even the much-maligned tablet market was restructured to emphasize higher-priced products like Surface Pro and iPad Pro. All of this reflects a positive reinvention of the view of technology for both brands and retailers and their consumers, away from a volume perspective towards a growing revenue total addressable market (TAM) for the industry.
But technology shifts are always more exciting and provide the most long-term opportunity for the business. Among the technology shifts, Smart Home appears to be the one most poised to explode in 2017. As we exited 2016, it became apparent that the Smart Home category, and the products that fall within, is the next great hardware opportunity. The Smart Home category, which grew by over $400 million in U.S. sales in 2016, is being propelled by products like Amazon Echo and Google Home, Nest, Ring and a vast array of security camera makers. This grouping offers the best long-term potential for the tech industry, precisely because its focus on hardware; this means that sales opportunities in the future will remain in retail and will remain focused on hardware, without the cannibalization that gobbled up cameras, GPSs and others. And while there are many product segments that will show solid growth in the next few years based on the shifting progress of technology (AR/VR and wireless headphones, to name two), only Smart Home seems to have a virtually unlimited TAM, a path to success and a roadmap to get there.
The start of a new year is a time for reflection and resolutions. As we move through January we often shape and finalize goals and objectives for the upcoming year. However, in the business world the most important question is how did the last year end? How did the market do and how did my business do? Will we see decline or growth in the year to come? These are great questions which can, and should, be examined.
This year I thought it would be fitting to begin the New Year with a brief analysis of how the Canadian IT Hardware distribution market fared in 2016. According to The NPD Group, the industry posted positive growth of +6 per cent in 2016 over the previous year.
There are a few categories that helped spur this growth. Categories like Notebooks, Large Format Commercial Displays and Solid State Drives all posted double digit growth on the year. Tablets in particular had a role to play in the overall growth of the commercial market in 2016.
Tablets posted an overall growth of +13 per cent for the year. However, if we exclude the retail channel which gives us a pure commercial view, the Tablet category actually grew an impressive of +59 per cent. This is especially encouraging given the lackluster growth that Tablets have seen in the consumer market over the last 3 years.
But why has the category seen such stellar growth in the commercial market?
As you can imagine, the use of Tablets is widespread in the commercial space. Not only are they being used by businesses (both large and small) for productivity but they are also being used in places like doctors’ offices and medical clinics, where physicians can take notes and print prescriptions quickly and easily. Other niche businesses are also beginning to utilize Tablets to organize processes and reduce paperwork. For example, if you have visited or taken your children to a paint ball arena, rock climbing gym, or indoor playground, you will notice that owners/operators of these businesses are often utilizing Tablets to manage consent forms, waivers and registration. Another common application includes their use in restaurants where your orders are taken and sent directly to the kitchen for speedy prep and payment.
These applications are also driving certain product sales. For example, it is not surprising that the use of larger Tablets in these environments is common. NPD distributor track non-retail data shows that Tablets with screen sizes of 10+ inches almost doubled their revenue in 2016 vs. the year prior.
While Tablets have quickly become a useful tool for businesses of all kinds, the question remains whether or not this momentum will continue, and for how long?
My contention is that as long as businesses are able to save time and money by leveraging Tablets the category will continue to grow in the commercial space.
Another Holiday season has come to an end and based on The NPD Group’s sales results, the past 6 weeks for the IT Hardware market did very well. Across the consumer IT industry the majority of categories delivered positive revenue results, which has not been seen for quite some time. Standing on top is the Notebook market which, during holiday, I would say exceeded expectations with volume growth at +9% and revenue results at +20%. I am not surprised by the revenue results as we have been tracking the Premium Price/Performance market throughout the year and Canadians continue to embrace these higher performing Notebooks – and certainly seem prepared to pay for that higher performance! Premium Notebooks, priced above $800 experienced revenue growth of 29% during Holiday.
For those who wished to find a Premium Notebook under their tree they were not disappointed. Over 63% of every dollar spent for a Notebook during Holiday 2016 was spent on a Notebook priced above $800. Despite the increased focus on Black Friday and tremendous deals being offered throughout the holiday, Canadian consumers have shown a desire to have Premium Notebooks to address their computing needs. In fact it is the Ultra-Premium market, $1,200 and above, that delivered the strongest performance with volume sales up 24% and revenue results almost 50% stronger than Holiday 2015.
For the industry, what I see as a very encouraging sign is that 10 of the top 11 vendors in the market all experienced an increase in both volume and revenue results in this Premium market. A fantastic way to end 2016 and hoping that as we look towards 2017 that this industry embraces these strong Premium results, during a time typically driven by low-end sales, and uses this as a springboard for 2017. Let’s hope for continued focus on Premium Notebook product lines to meet the needs of what Canadians are demanding.
For the past few years, the Canadian Retail calendar has been marked by two key promotional events which take place during an extraordinarily condensed period of time: Black Friday/Cyber Monday and Boxing Week. Not surprisingly, the Consumer Technology sector has typically been a key focal point of attention and spending for many shoppers for both of these events. As Black Friday has increased in importance, one key question asked by both manufacturers and retailers is the impact of that shift on the proceeding weeks and particularly on Boxing Week.
In examining the 2016 holiday sales results, for the first time since Black Friday became a phenomenon in Canada, the sales for that week (Nov 20-26) surpassed Boxing Week (Dec 25-31) by 5%, making it the most important sales week of the year in Consumer Technology. From a share perspective over the past four years (2013-2016), if we break the 6-week holiday season into two week chunks, the share of dollars spent in the first two weeks (Black Friday/Cyber Monday) increased by 4 points to 38%, the share of dollars spent in the ensuing two weeks declined by 6 points to 24% and the share of dollars spent in the final two weeks of the holiday season (which includes Boxing Week) increased by 2 points to 38%. So indeed, over a relatively short period of time, Black Friday has eclipsed Boxing Week in the Consumer Technology sector, driven primarily by a sharp drop in sales in the interim weeks.
From a growth perspective versus 2015, dollar sales over the six-week holiday season grew by 3%. That growth was fueled during the first two weeks of 9% and during the last two weeks of 6%, while the interim two weeks declined by 9%. Televisions and Notebook Computers were the key growth drivers increasing by 21% and 36% respectively and together accounting for 57% of the dollar gain versus last year. Other key growth engines included Stereo Headphones (+20%), Health & Fitness Trackers (+16%), Mobile Power (+24%) and Monitors (+41%). Amongst declining categories, Tablets decreased by 15% and accounted for 40% of the overall decline. Other key categories contributing declines to the marketplace were MP3 Players (-31%), Point & Shoot Cameras (-31%), and Streaming Media Players (-21%).
Black Friday is certainly here to stay and appears poised to become the dominant event during the holiday season; but at the same time, the heritage of Boxing Week in Canada cannot be underestimated as it too has grown in share and importance in 2016. Seems like a winning situation long-term for the Canadian technology shopper.
If there was any doubt that we are entering the post-mobile era, this year’s CES ratified the fact. The absence of mobile integration as a core discussion, and “must show-off” checkbox, demonstrates that the ground has shifted. Where iOS and Android integrations were the must-have stamp of approval in previous years, this year the badge of honor was to show-off Alexa integration.
Of course, that’s not to say that mobile integration has been abandoned. Far from it; all home automation and other products still need to work well with mobile. The “post-mobile era” simply means that mobile is no longer the absolute center of the tech universe. There is now room for a new operating system or interface to control the surrounding tech devices, particularly as the range of devices that need connecting are primarily static devices within the home. The simple power of an always-listening voice interface that can work across a broad range of devices, (almost) regardless of brand, is compelling and is seen as a way to help drive demand for new tech categories such as home automation.
This fundamental shift in power regarding who controls the consumer connection has the potential to shake up the industry. As a case in point, the last such change was the shift from mundane mobile phones to mobile computing platforms (aka, the smartphone), which saw a dramatic change in tech leadership, with the ascent of Apple and Samsung in particular, the collapse of Nokia and Blackberry, and a twilight zone of struggling OEMs in the middle.
As such, while Amazon was clearly the winner at CES – without even showing up – Apple should be concerned that Siri was rarely mentioned as an interface for home automation solutions. Of course, Apple still holds a key card when it comes to the consumer, thanks to the iPhone, while Amazon has not succeeded in making an impression in the mobile space. As a result, Amazon still has to address the mobile part of the post-mobile era, which remains key; however, that does not necessarily mean that it needs to build a mobile phone. Rather, if Alexa’s momentum continues, there is the potential to communicate with Alexa through an app as opposed to owning the hardware… and let’s not forget, at least one Amazon app is typically found on most smartphones, regardless of the underlying OS.
While Amazon’s Alexa was last week’s big winner, Google has the potential to ultimately benefit the most. The combination of Google Home, Android phones, Nest devices, Android-based TVs and set-top devices provides a comprehensive base that supports a unified consumer/device communication via whatever device type the consumer happens to be using. Further, with tighter integration into the operating system, and its own search engine backing all of those random inquiries, Google certainly owns enough of the ecosystem to compete in whatever the post-mobile world brings… including more phones.
As we embark on the holiday season, two distinct dynamics tend to converge: chaos; and new technology. Is your work done? Are you ready to take the week off between Christmas and New Year’s Day? Have you even started your holiday shopping? I can firmly say no to all of these questions, yet I’m sitting here writing a blog about this year’s trendy new devices. As you read on, I hope you spot a gift idea for that tech-crazed special someone on your list.
Holiday gift list for the tech geek:
- Consider picking up a pair of the new Spectacles from Snap. That is, if you’re lucky enough to live in a trendy town where Snap has embedded a pop-up kiosk offering you the privilege of standing in line for a couple of hours. Ah, demand creation genius. Simple, stylish, and a little bit retro; these $140 Wearables pick-up where Google Glass left off. Instead of a do-everything device, they do one thing well, recording a 10-second video and posting it to Snapchat. Let’s just say these made the list by being cool.
- Butler anyone? The technology is getting there and artificial intelligence is making its way into robots manufactured for the consumer retail market. But for this holiday season most of us will need to settle for a personal assistant. There are two primary choices here: Google Home; and Amazon Echo. Echo has the head start, and its Alexa voice assistant API is quickly finding its way into numerous other devices; yes an eco-system is forming. But don’t count Google out. The company’s deep integrated search data is critical as artificial intelligence is only as good as the data that informs it.
- A modern View-Master: after years of development, 2016 is the year virtual reality headsets will finally be under the Christmas tree. Entry level options include Google’s $15 cardboard, and $79 Daydream View. Those looking for high processing power and an immersive gaming experience can fork over $599 for the Oculus Rift PC-compatible headset, or $399 for Sony’s PlayStation 4-compatible VR. For the Samsung loyalist, Gear VR is compatible with newer Samsung mobile phones and offers a virtual reality experience for $99.
- Panoramas are so last year, but check out the new 360-degree cameras. Virtual reality headsets offer gaming and other entertainment experiences, so why not add a 360-degree camera and capture immersive videos as you head down the slopes this winter? Indeed, Samsung promotes the Gear 360 camera alongside its VR headset. This little accessory will set you back another $299 … no one ever said being an early adopter was economical.
- The NES Classic Edition, a $59 blast from the past comes with HDMI-inputs for our modern TVs. This updated version of the 1985 mega-hit game console comes with 30 of Nintendo’s most popular games built-in. Intentional or not, it’s priming the market for Mario’s return on the Nintendo Switch console coming in early 2017. As with Snap’s spectacles, the short supply is generating buzz and driving up the price. The least expensive one on Amazon today is $220. If this is the gift for you, consider doing what I did a couple of years ago and buy a refurbished original. You’re bound to have a few friends willing to pull their game collections out of the attic. For more on the NES launch check out my blog about being a Tech Luddite.
By now you’ve realized this is not a list of new products like 4K UHD TVs that will drive a large part of retail revenue this season. However, there are a few themes we’re seeing in the technology that are capturing consumer’s attention, including single-function use cases, integration of artificial intelligence, marketing strategies to facilitate demand creation, development of eco-systems, and a splash of retro design. Indeed, there was an industry message to this holiday gift list after all.