The holidays are not cancelled with serious retail shopping already underway and likely to last longer than usual as pent-up demand drives sales into the new year. The season may look a little bit different, but retailers with the right product mix are positioned for a strong finale to an unprecedented year.
“Demand came in so much earlier than the usual holiday season and started to consume all available inventory and safety stock that vendors typically build for the future,“ said Fred Towns, president of New Age Electronics. “As components arrive, they’re being absorbed very quickly to try and meet the pent-up demand.”
When the pandemic first broke out, the big question—what everyone wondered, Towns recalled–was how long the country would be quarantined. “We wanted to protect our lives by staying home,” he said. “We wanted to protect our family and friends. Consumers began supplementing gear they had at home to make their work-from-home and daily lives more palatable. As the time at home kept getting extended, more and more people started thinking they should probably upgrade.”
Not only are consumers considering significant upgrades for themselves for the holidays, they’re planning to increasingly purchase tech as gifts this season as well.
According to the 27th Annual Consumer Technology Holiday Purchase Patterns report, an estimated 184 million adults plan to buy tech products this holiday season. Even with the pandemic still looming large, 81% of those surveyed were unaffected or more likely to purchase—further demonstrating the role and value of technology in these uncertain and transformative times.
Replacing Visits With Gifts
While the pandemic has created pent-up demand for shoppers it’s also bolstered another trend this season—for givers.
“With the limitations to travel, people staying home, and doing things in a more controlled fashion, it’s going to be a year of guilt giving,” said Towns. “People are concerned about not getting to see relatives—their children, their grandchildren—so the thought is to send them nicer gifts this year.”
For that reason, Towns expects the Facebook Portal, the Amazon Echo Show and assorted devices from Google to do exceptionally well this season. “These enable connectivity for those who aren’t comfortable using more sophisticated ways to connect like a PC,” he said.
Connectivity, Towns continued, remains the hub of consumers’ ecosystems as work from home and learn from home remain the new norm—and holiday purchases will reflect that. “You need a good engine and that means improving Wi-Fi to ensure there’s a strong, complete signal throughout the home or the work environment,” said Towns. “Consumers started to notice all the things they needed to better communicate whether it be a new PC, a larger monitor, an ergonomic chair, an updated desk or a better way to store projects that were being managed at home that would eventually go back to the office and ultimately be shared—so all those types of peripheral products have become extremely popular.”
Even touch-free thermometers, said Towns, are hot items. “The finger devices that let you check the oxygen level in your bloodstream—these simple devices are the kinds of items that people want to own and have in their homes today,” he said. “There’s also a new demand for white boards. When you’re teaching a child at home and going through lesson plans, these are needs we don’t traditionally think about, but people are looking at now to replicate the school environment at home.“
Tech Tops Shopping Lists
In addition to holiday shopping starting earlier, consumers are planning to spend more than they did last year. “Our forecast shows consumer spending on tech will increase 10% over holiday 2019,” confirmed Steve Koenig, vice president of research for the Consumer Technology Association.
Topping the shopping lists are smart phones, devices that are supported 5G and Wi-Fi 6, HD TVs, smart home and connected products, gaming, audio products that connect to consumers’ ecosystems, smart appliances including cleaning devices, and drones.
Smart phones are tracking to be big sellers with upcoming product announcements driving interest. “With buying activity throughout this season and all year long, a lot of households have already upgraded laptops and flagship displays,” Koenig said. “We’ve heard about iPhone 12, a new Google Pixel phone and the Galaxy Fold so consumers are pivoting and looking at their mobile device as a principal upgrade. In fact, a smart phone is number one on the holiday tech wish list for consumers and number three on the purchase list so that really underscores the enthusiasm for this.”
Beyond smart phones, Koenig spotlights gaming consoles. According to CTA’s report, interest in video gaming consoles is up to 38% this year versus 33% last year. Content, the other side of the gaming coin, Koenig noted, will also be strong. “According to our estimates, gaming content is going to account for 54% of overall content spending so that adds up to $16 billion on just gaming content spending alone this holiday season.”
Towns, too, predicts gaming consoles will be big sellers. “Leading manufacturers are expected to introduce new consoles,” he said. “These will be highly coveted, in high demand and that will continue through January, February and March. Even the software will be a top item. For those comfortable downloading content, consumers are going to do that to get the games faster. The hard copy of the games is going to be more challenging to get in the stores.”
Other top tech items on shopping lists are no surprise. “The usual suspects like TVs, laptops and smart watches are going to be popular,” Koenig said. “But there are two emerging categories that people should be taking a closer look at—first, STEM education products or toys. In this season of distanced learning a lot of parents would like to augment their children’s education with a STEM education product or educational toy. Another sector we’re watching closely and seeing budding enthusiasm for is home technologies—air purifiers, UV sanitation systems, water filtration and so forth.”
As consumers shop this season, they’ll be prioritizing safety. “People are planning to shop online and that doesn’t surprise anyone,” Koenig said. “With safety top of mind, there will be more clicks than bricks in holiday 2020. But what may surprise folks is that consumers are planning to go out to the stores—with the caveat that they’re going to pay very close attention to social distancing orders and to safety precautions. That will be important in terms of which stores consumers choose to do their shopping. A total of one-fifth of consumers say they will opt for curbside pick-up—something that’s been popular all season long.”
The More Tech, The Merrier
As a strong holiday season unfolds, the even better news is that sales are likely to continue into 2021.
“When people start using their gift cards, the season will extend beyond January, said Towns. “What we see into 2021 is that demand is still not fulfilled yet—and that demand will still be there for the products that consumers couldn’t get over the holidays.”
“Demand will continue to spill over into 2021,” echoed Koenig. “Any inventory limitations or supply constraints will be a function of that historic high demand—not a function of supply chain issues. The demand that carries into next year is going to pay dividends down the line as across America we level-up tech adoption. Our research shows time and time again that the more tech people own, the more tech people want.”
For details on prepping the right product mix for the holidays and beyond, New Age
Electronics offers retailers flexible solution bundles that include everything on your customers’ wish lists.
For more information, visit https://www.synnexcorp.com/newageelectronics/build-a-box/holiday-solutions/
About New Age Electronics
A division of SYNNEX Corporation, New Age Electronics, supports retail customers with better ways to move, monitor, manage and market products. The company gives retailers the power to stand out from the crowd with a comprehensive product portfolio and innovative solutions and services. Its team conducts extensive research on today’s products so retailers can rest assured that they have the widest array of the hottest items and accessories to satisfy their customers’ needs and wants. Premier services like comprehensive bundling, extended assortment, electronic software download, superior logistics, extended warranty and concierge services, as well as remanufacturing and end-of-life services, help make a positive impact on the retailer’s bottom line.
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