CEA Study Says CE Accessories Will Grow 11%

By Lisa Johnston -- TWICE, 4/9/2007

ARLINGTON, VA. — Consumer electronics accessories will lay claim to a boon in prior-year sales as well as a promising outlook for future growth, according to a study put out by the Consumer Electronics Association (CEA).

Key findings in the study included the following:

• The U.S. accessories market is expected to generate in excess of $11 billion in shipment sales in 2006 (not including PC and gaming accessories), representing 11 percent growth over 2006.
• Accessory ownership is highest in the home and portable A/V categories; however, it is likely consumers underestimate PC accessory products ownership.
• Men and women own accessories at roughly the same rate.
• Based on consumer reported expenditures, accessory buyers spent an average of $402 on the primary CE device and $62 on accessories in 2006. This equates to an accessory dollars to CE dollars ratio of 15.4 percent.
• In 2006, those spending $500 or more on CE devices were most likely to have purchased a PC-related accessory product. In contrast, those spending less than $100 on CE devices were most likely to have purchased a wireless communication accessory.
• The greatest percent of accessory buyers made their purchase for the purpose of enhancing the functionality of performance of their primary CE device. Other tops reasons include accessories designed for listening, connecting, powering and protecting.
• Spur-of-the-moment buyers were more likely to view their purchase as a luxury compared to buyers that plan/research their purchase.
• Accessories shopping behavior mirrors CE device shopping behavior.
• Sources of information rated as important during the research process don't necessarily correspond to the factors that ultimately determine what accessory product is purchased.
• Ninety-seven percent of those buying accessories from an online retailer were reportedly satisfied with their experience.
• Storefront sales associates boost attachment rates, boost dollars spent on accessories, and play a part in ensuring customers buy their accessories at the same location that they buy their primary CE devices.

The study also listed four key drivers propelling the accessories market forward: CE market growth, new product introductions, changes in consumer behavior, and changes to retail channels and how accessories are sold. To explain changes in consumer behavior, CEA said that an entire class of accessories has been created to support the on-the-go lifestyle. Likewise, changes in retail channels can be attributed partly to the online channel allowing "for virtually unlimited product offerings as well as the ability to make suggestions and recommendations throughout the purchase process," while brick-and-mortar retailers have optimized stores for maximum attachment sales.

Consumers spent an average of $231 on accessories in the past 12 months, with the most recent purchase averaging $62. "Based on the average unit price of accessories, for every two CE devices sold, approximately one accessory product is sold," said the study.

Retailers can look forward to higher sales as consumers expect to spend slightly more on accessories over the next 12 months. According to CEA's study, this can be attributed to increasingly rapid adoption of flat-panel displays and the accompanying need for wall mounts or HDMI cables. Also, the desire to integrate portable digital music players into home stereos and vehicles is another possible driving factor.

Although the top spending accessories buyers were most likely to have purchased a PC accessory, the study states that this may have come about because of "the impracticality of listing every accessory in each main product category [so] consumers may have included items outside of the traditional definition."

When function of the device is taken into account, accessories that enhance topped the list of accessories purchased, with 32 percent of the share. Listening came next with 28 percent, followed by connecting (23 percent), powering (17 percent), protection (16 percent), cleaning (15 percent), transporting (10 percent), in-vehicle use (9 percent) and personalizing (8 percent).

One in four buyers made their purchase out of sheer necessity, according to the study, because their primary CE device would not work otherwise.

Consumers making "planned" purchases were more likely to seek functionality and performance enhancement than those who purchased an accessory at the spur of the moment (33 percent vs. 25 percent).

Spur-of-the-moment consumers were more likely to consider their accessory purchase as a luxury, which was similar to how online consumers viewed their purchase. "Buyers making their purchase from a storefront with the aid of a sales associate are most likely (60 percent) to rate their accessory purchase as a necessity," said the study.

Not surprisingly, the study found that accessories shopping behavior was similar to CE device shopping behavior. Both types of consumers cite friends and family as key sources of information, and they also list Consumer Reports and information found on packaging and user manuals as sources.

Although packaging information ranked fourth in what consumers considered to be sources of important information, it topped the list for factors that ultimately determined a purchase.

Nearly all of online consumers (97 percent) reported being very satisfied or satisfied with their accessories purchase; however, just 72 percent reported being satisfied with the amount of product information and research available. Likewise, 72 percent were satisfied with the amount of time it took to receive the accessory after placing the order, and 67 percent were satisfied with the price paid.

The report also examined the importance of the sales associate. Consumers who visited a store and didn't interact with a sales associate were most likely to make a spur-of-the-moment accessories purchase, whereas online buyers were least likely to make a spur-of-the-moment purchase. Consumers assisted by a sales associate were 40 percent more likely to exceed their original spending expectation and were nearly twice as likely to spend more than they expected when compared to online consumers.

The quantitative study was administered to an online national sample of 2,061 U.S. adults between Dec. 19-23, 2006, while the qualitative portion of the study used one-on-one interviews conducted with men and women, aged 18 to 65, who had purchased a CE accessory within the past 12 months.