As part of our research for the Top 101 Retailers of 2020 list, we spoke with retail, consumer technology, and gaming analysts to get their take on the most surprising consumer tech usage and buying trends, both in the U.S. and across the globe. Store closings, pauses in manufacturing, and chip shortages aside, nearly nine months of people living and working at home was, on the whole, good for the consumer technology business. Here are some of the more notable expert insights on the pandemic era’s top CE retail trends that we gathered.
People played more video games and bought more game consoles; the popularity of virtual life management game Animal Crossing caused a run on, and subsequent shortage of Nintendo Switch units last year, for example. In the U.S. alone, consumers spent $56.9 billion on gaming throughout 2020, a 27 percent increase from 2019, NPD Group games industry analyst Mat Piscatella says. From gaming hardware to software to accessories and merchandise, every aspect saw sales increases last year.
Newzoo similarly found that video game console sales increased five percent in 2020. Analysts at the games and esports data company expect that 2021 likely won’t surpass 2020’s record sales, and told Dealerscope they anticipate a “corrective year,” with sales registering a “slight decline.” Overall, the games market remains entirely strong and Newzoo forecasts it will generate $204.6 billion in revenue by 2023. By the end of 2021, there will be an estimated 2.9 billion gamers of all ages playing games across the globe, Newzoo predicts.
People spent more time on their phones.
According to John Harmon, senior analyst at retail and tech advisory firm Coresight Research, smartphone sales grew slightly in 2020. Data from Coresight and the Consumer Technology Association (CTA) show that U.S. smartphone sales were up $79 billion, a roughly two percent increase from 2019.
The share of people playing games on their phones is also growing. Mobile gaming is expected to grow roughly 4.4 percent to revenue of $90.7 billion worldwide in 2021, according to Newzoo. By contrast, in Europe, where “city weekends” are popular due to shorter distances and robust train infrastructure, and where lockdowns were enforced more strictly, telecom purchases were down by 3.7 percent due to less interest in outdoor and travel devices.
The biggest surprises were good news.
Appliance sales grew significantly in 2020, “following the trend of workers at home improving their work and leisure setups,” says Harmon, and he added that such domestic upgrades were also the reason that TV sales were “actually much stronger than expected.” TV sales grew 0.8 percent, a surprising outcome considering that the CTA had forecast a 14 percent decline for 2020.
“The long-term strength of sales has been one of the biggest surprises,” says NPD Group technology and mobile analyst Steve Baker. “Volumes were built quickly in 2020 and then have stayed at those levels through all the shifts and changes of the overall societal environment.” He says the most positive impact the pandemic had on the CE space was that consumers were reminded of the value that consumer electronics devices bring to their lives, along with new ways to deploy them at home. “Whether it was the rediscovery of Wi-Fi in their homes (and the consequent growth of mesh networking products), the realization that a multi-monitor environment in their home office is just as useful, and easy to create, at home, or the reigniting of their love affair with big-screen TV, the value of home electronics only increased.”
Across the pond, GfK analysts said one surprising trend in Spain, France, Germany, Italy, and the U.K. was the “accelerated demand growth for online, and click and mortar” purchases, which is what is increasingly referred to in North America as BOPIS (buy online, pick up in-store). In those “Euro 5” countries, as they are collectively referred to, said click-and-mortar purchases jumped 168 percent, online-only rose 64 percent, and purely in-store purchases declined by 33 percent in 2020.
The consumer love affair with technology lives on.
Piscatella believes that gaming sales will continue to increase. “It is safe to say the demand will outpace supply on both console and PC gaming hardware into 2022,” he says. “2021 will be a year where supply will be more impactful to the video game market than demand.”
While the pandemic did accelerate demand for new products, it also forced some retailers to rapidly scale and face the challenges of procuring new supply chains during a time when many people were out of work. Per Baker: “The biggest negative for the industry is the disruption caused by the rapid change in channels and transaction behavior, along with the need to build new models to support retail partners and consumers with these new purchase motions.”