2020 brought immediate and drastic changes to our industries, and those changes are likely to reshape future expectations in ways we would never have imagined just a few months ago. gap intelligence industry analysts hit the pause button last week to look back at the first half of 2020 and shed light on what to expect in the future during the webinar, Hindsight is 2020: The Year in Review & The Year Ahead. The 45-minute presentation, which was followed by a 10-minute Q&A, left the virtual crowd of several hundred attendees with a host of key insights covering a variety of consumer categories including smart devices, personal entertainment, home appliances, computing, and printing. Below are curated highlights from the session, which can be accessed and replayed by clicking here.

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Webinar Key Insights:

  • Stay-At-Home orders have caused unprecedented catalysts for change – forcing consumers to change their behavior and requiring those behaviors to stay changed long enough for them to become permanent
  • Consumers have become increasingly comfortable making large >$1,000 purchases online
  • Buyers have become savvier and increasingly comfortable making online purchases through merchants other than Amazon, which couldn’t fulfill everything during the pandemic
  • Expect even more focus on brand awareness and loyalty campaigns following deep declines in spending in many consumer categories

What Happens with Black Friday:

  • Brands and retailers will be more cautious about slashing prices and avoid steep discounts, focusing their promotion messages instead on building brand awareness and loyalty through vehicles such as gift cards, which help lock in future holiday buying dollars
  • Expect an even more elongated sales period – more like “Black November”
  • Look for more activity through manufacturer-direct channels where brands can control their own buying experience and better manage their inventories and value chains

What About Amazon Prime Day:

  • Delayed due to the pandemic and Amazon’s shift in focus on essential grocery services
  • Consumers more reluctant to spend on discretionary purchases now
  • Move to August or even September giving consumers a chance to stretch their limited budgets by spreading out and, in some cases, accelerating holiday gift buying

And Back To School:

  • Could see a large negative impact or even skipped this year
  • Demand still driven by learning-from-home dynamics, but may be offset by uncertainty around Fall semester plans by colleges and universities

Key Takeaways by Category

Computing

PC Inventory Trend

  • Rapid work-from-home (WFH) shift drove sudden spike in unplanned sub-$600 notebook, 2-in-1 PCs and Chromebook purchases
  • 27-inch Computer Monitors flew off shelves as WFH consumers sought to replicate their dual-display office setups
  • Both consumer and gaming desktop PCs saw rapid demand increases as home-bound consumers settled in and looked for ways to keep themselves entertained
  • PC demand likely capped for next year; but extensions in corporate remote work policies post-pandemic will sustain steady demand
  • Expect demand to rise for higher-end devices as buyers look to upgrade their newly purchased entry-level devices over the next year to 18 months

Printing and Supplies

Printer Google Trends

  • Google trends show “Buy Printer” and “Buy Scanner” saw the biggest spikes in search activity in years
  • Unexpected shift in demand caught manufacturers and supply chains off guard as inventory availability plummeted by 35 to 40% in a matter of weeks
  • Strong demand for both inexpensive cartridge-out and pricier continuous supply system printers will funnel more consumers into supplies replenishment and subscription services
  • Expanded install base in work-from-home offices is a new long term opportunity for consumer and SOHO printer and supplies brands along with the expected continuation of remote working

Home Entertainment

TV Prices

  • Once work-from-home needs were addressed, consumers realized the challenges of sharing the family TV, driving demand for additional screens for the home
  • But consumer interest in high-value, premium products will be lower, targeting sub-$500 for the second, third, and fourth screens for the home
  • Heavy emphasis on new features like Dolby Atmos are baiting demand for in-home upgrades of Sound Bars amid months of movie theater shutdowns

Voice-Assisted Speakers

  • Voice Assisted Smart Speakers were already on a strong uptick before COVID, and are increasingly the gateway to the smart home and high predictor of further smart device purchases
  • Marketeers changing their messaging to focus more on video chat features as evidenced by Facebook’s Portal and Amazon’s Echo Show advertising content
  • With more confidence shopping online, look for similar increase in adoption of shopping by voice
  • Physical merchants are helping consumers adapt by leaning more heavily into “skills” of their own to facilitate branded experiences and loyalty

Major Home Appliances

Promotion Discounts YoY

  • Given that purchasing of large home appliances is so experiential, Best Buy and its BOPIS model leaned heavily into twice-weekly advertising to draw shoppers from open home-improvement chains, which stayed open as local governments deemed them “essential”
  • Unemployment, underemployment, and fears around job security fears weigh on both large and small HA markets, especially premium segments, as consumers are hesitant with their discretionary income and delay major remodel projects
  • Demand will shift toward the heavier discounts on older models and less expensive entry level options with bundled promotion appealing to both savings- and convenience-minded buyers

Small Home Appliances

Small Appliance Bundles

  • Surge in mid-pandemic marketing efforts show how retailers and brands make life easier for shoppers as consumer desire to make living spaces more comfortable
  • Small home appliances, especially floor care and air purification, enjoyed growth thanks to heightened awareness around home cleaning despite a down tick in advertised discounts
  • Post-COVID strategies shift as consumers are less influenced by promotion activity, more driven by need

Headphones and Smart Wearables

Wireless Headphones

  • The true wireless headphone form factor won out as makers were forced to prioritize limited supply chain and factory resources due to pressure from CV-19
  • Marketing messages adapted to focus on consumers’ new realities, shifting from long battery life to “freedom from wires” and “blocking out distractions while working from home”
  • Smart wearables and fitness trackers suddenly a higher priority with focus on personal wellness as marketing and advertising activity focuses squarely on this shift for the coming year

Smartphones

Smartphone store closures

  • Half of the available market wiped out due to closures of all (non-essential) carrier stores, funneling buyers into mass market and club stores — not known for grab-and-go transactions, which heavily impacted the postpaid smartphone segment
  • Upgrade activity tanked – AT&T and TMO/VZW report lowest ever rates: 3% and 4%, respectively, during the last three months
  • Product launches continue despite market challenges, including the iPhone SE, which coincided with the first round of government stimulus checks
  • Still, many consumers awaiting availability of affordable 5G devices that have been promised, but have not yet been delivered to market

That’s a Wrap

The latest U.S. government retail reports show a dramatic rebound in retail sales from April to May 2020 of nearly 18 percent, which is welcome news after retailers saw sales plummet by more than 8 percent in March and nearly 15 percent in April. Most believe this was pent up demand that was unleashed as the economy began to reopen. So we still have a long way to go, and without a proven vaccine for CV-19, storm clouds will continue lingering on the market horizon.

Stay tuned for another round of gap intelligence insights delivered by our world-class Industry Analysts at our Q3 2020 Webinar, which will again be open to the public. Don’t hesitate to contact us at info@gapintelligence.com if you have any questions for our team or if you are interested in attending the next public presentation. Until then, stay safe everyone.

For more than 17 years, gap intelligence has served manufacturers and sellers by providing world-class services monitoring, reporting, and analyzing the 4Ps: prices, promotions, placements, and products. Email us at info@gapintelligence.com or call us at 619-574-1100 to learn more.