Thanks to more informed and more demanding consumers willing to pay more to get what they want, CE sales revenue rose 3.2 percent to $967 billion in 2017, and is projected to rise another 3.9 percent to $1.014 trillion this year according to market research firm GfK Global.
Contributing to this sales revenue rise are continual growth in key product categories, and GfK has presented these 2018 projected growth figures:
- TVs: units up 5.8 percent to 236 million, revenue up 14 percent to $122 billion
- 4K UHD: units up 38 percent to 98.4 million, revenue up 35 percent to $77.8 billion
- Smartphones: units up 3.2 percent to 1.527 million, revenue up 4 percent to $487 billion
- Wearables: units up 32 percent to 211 million units, revenue up 35 percent to $28 billion
- Smart Speakers: units up 230 percent to more than150 million
- Major Domestic Appliances: revenue up 10 percent to $216 billion
Jürgen Boyny, global director of GfK's CE practice, noted that the overall CE sales revenue increase does reflect more units sold. But revenue increases are often higher due to higher average selling prices (ASP) on a number of high-profile devices, higher prices that consumers seem willing to pay.
This willingness to pay more is not just shrug-of-the-shoulder resignation. "Consumers know it's about best value, not just best price," opined Boyny. "A consumer asks for innovation and is willing to pay for it. They are redefining value. Every retailer now has to be aware that any consumer who steps into their shop has already informed themselves online."
According to GfK, the ASP of a number of devices have risen sharply in just the last year, from 2016 to 2017. For instance, GfK said that TV ASP has risen from $488 to $502, home audio products from $265 to $272, digital cameras from $536 to $564, and smartphones from $315 to $320.
Boyny expressed what today's tech-savvy consumers are thinking: "As a price-conscious, critical and savvy consumer, best value, as opposed to just price, is top-of-mind for me and shapes my shopping behavior and brand choice. I demand and expect to receive quality and value at all price points."
Today's consumers also are more demanding of instant gratification than their Gen X and baby boomer antecedents. Boyny defined today's younger consumers — millennials, the first internet generation born between 1982 and 1996, and "iBrains," born between 1997 and 2011 and constantly online to "check and recheck and answer messages, even on the toilet" — as wanting "instant everywhere."
What is this global younger buyer attitude? "What do I want? Everything. When do I want it? Now!" Boyny said. Since they can buy everything on their mobile phones instantly, "the only question is delivery time," Boyny observed. "If they're told what they want won't be available for a few weeks, they'll go to another store." This instant gratification demand for products as well as entertainment and services places higher inventory and fulfillment pressure on retailers and providers.
With so much time now devoted to being and staying social media active, younger consumers have less time to be patient shoppers. "I expect to have access to goods, services and entertainment around-the-clock and on-the-go, delivered wherever and whenever I dictate, in a format I demand," Boyny explained of this new connected consumer expectation. "As I feel under more time pressure than ever before, convenience is a must, and products and services that help me save time and effort are a real bonus."