Despite the overwhelming popularity of tech this holiday season, a spending shift from big-ticket TVs to less expensive audio, mobile and emerging tech devices is proving a drag on CE industry sales growth.
That was a key takeaway from a holiday purchase pattern study presented last week by Shawn Du- Bravac, chief economist and senior research director of the Consumer Technology Association (CTA), at the trade group’s annual CES Unveiled event in New York.
In his presentation, DuBravac provided a deeper dive into CTA’s purchase intent research, which is based on a recent poll of over 1,000 U.S. adults, and was previewed in an October announcement.
Specifically, while nearly three-quarters (74 percent) of gift buyers said they plan to purchase CE as holiday presents (excluding accessories) — up from 73 percent last year — CE sales growth is expected to slow to 2.3 percent this season, or nearly $34.2 billion, compared with last year’s 3 percent gain.
By comparison, total holiday sales are projected to grow 3.4 percent, to $788.5 billion, CTA noted.
This year’s slowdown in holiday tech spend follows a long-decelerating trajectory, as CE seasonal sales grew 4.7 percent on average over the previous 10 years and 6.7 percent over the past 20.
Part of the problem may lie in what DuBravac described as “less interest in TV” by consumers amid increasing strength in smaller-ticket mobile and emerging tech products.
Indeed, LCD TVs, now found in 84 percent of households, are only the third-largest consumer tech category by factory shipment, with $18.6 billion in estimated volume this year, he said.
In contrast, the No. 1 category in CTA’s consumer tech “Big Five” is smartphones, which are found in 79 percent of households and will see some $53.6 billion in projected shipments this year.
(Tablets rank second with $22.6 billion in shipments, and laptops and desktops follow in fourth and fifth place, with $17.8 billion and $6 billion in projected factory sales, respectively.)
TV also takes it on the chin when it comes to consumer demand. According to the CTA study, only 17 percent of video buyers plan to purchase a set this season, compared with 24 percent last year.
• 22 percent intend to buy some form of digital camera or camcorder over the holiday period;
• another 22 percent are looking for an after-market automotive product, whether portable GPS or a hands-free kit (cited by 22 percent each);
• 24 percent intend to purchase a smartphone;
• 26 percent will buy a gaming product;
• 33 percent will buy emerging tech, up from 19 percent last year, including smart thermostats (6 percent, up from 3 percent last year); drones (7 percent, up from 3 percent last year); and fitness devices and smartwatches (both cited by 12 percent);
• 52 percent are in the market for audio, be it an AVR (11 percent), soundbar (12 percent), MP3 player (14 percent), Bluetooth speaker (25 percent) or headphones (28 percent); and
• 53 percent expect to buy a computing device, be it an e-reader (14 percent), external storage (14 percent), a notebook (23 percent) or a tablet (26 percent).
For those planning to buy a TV, connectivity, and to a lesser extent 4K/Ultra HD resolution, matter more than size.
Fully 78 percent of respondents want their holiday TV purchase to be Internet ready, up from 63 percent last year, while 59 percent will opt for a 4K/Ultra HD model. That jibes with CTA’s 4K/Ultra HD shipment forecast of nearly 4.5 million units for 2015, up from the 1.4 million units shipped last year.
But when it comes to size, 79 percent of holiday shoppers said they are in the market for a screen with less than 60 inches of real estate, compared with the 35 percent who want a jumbo display that’s 60 inches or greater.
“Consumers are moving into jumbo screen sizes and connected TVs,” DuBravac said. “4K is driving it too.”
On the notebook front, touchscreens appear to be the most sought-after feature, cited by 73 percent of laptop buyers. Hybrid PCs are also in high demand, with 61 percent of buyers in the market for a flexible form factor. The other two major purchase influences are price, with 43 percent looking for a model priced between $250 and $500, and 39 percent seeing a device under $250.
All told, 65 percent of Americans, or roughly 160 million people, are planning to buy tech gifts this holiday season, which represents a steady increase in purchase intent over last 10 years, the study showed.