The grip of Covid-19 might have loosened on global consumers, but many are still living through a period of significant disruption.
Major geopolitical crises, such as the Russian-Ukraine conflict, alongside surging inflationary pressures and spiraling household bills all contribute to a climate in which purchase behaviors and priorities are constantly in flux.
Despite this volatility, there are a core set of product characteristics and traits that continue to appeal. Underlying all of them is the way in which they enhance the lives and experiences of consumers.
This focus on experience is a trend that gained momentum during the peak of pandemic restrictions of course as, unable to travel or socialize outdoors, consumers sought to elevate their at-home experience by purchasing new products or upgrading existing ones.
During this unprecedented period of value growth within the sector, premium brands, smart or interconnected devices, and products with upgraded or multifunctional features all flourished.
And even now, as consumers navigate their ‘new normality,’ products that deliver a richer, more engaging experience continue to appeal.
So how exactly can Consumer Technology and Durables brands and retailers amend their product development strategies to attract these experience seekers?
Powering up performance
The first area of focus must be performance.
Consumers continue to invest in those products that can offer them a better, more efficient performance, even when their existing devices may be functioning perfectly well. In notebook personal computers (NPCs), for example, 24% of new purchases were triggered by looking to upgrade in Q1 2022 versus 20% in Q1 2019. Much the same goes for products that enhance performance through innovative features and functionalities. Year-on-year sales of robotic vacuum cleaners with dirt extraction docking stations were 78% higher in H1 2022, for instance, while sales of hot air fryers climbed 43% in the same period, and espresso pump coffee machines by 17%.
All of this points to a willingness to spend more on those products that deliver value through enhanced performance, despite the impact of the inflationary pressures on consumer confidence in many markets. For brands and retailers this is a clear signal that strategies for product development must be crafted with elevating performance in mind.
With an end to Covid-19 restrictions in many regions, the mobility of consumers is returning once again, be it travel, socializing or in-person events. With a migration to hybrid work too, many are also navigating long commutes while continuing to carry out a higher number of errands from home compared to pre-COVID. “All this creates an environment in which consumers are craving devices that save them time, hassle and unnecessary complexity,” explains Nevin Francis, Director of Strategic Insights at GfK. “They want tools that allow mundane tasks to be carried out with minimal effort and innovations that simplify daily chores and provide convenience alongside rich experiences.”
This is why sales of smart home monitors that simplify home security via interconnected alert detectors, cameras and communication grew by 102% in H1 2022 versus H1 2019. 43% of consumers said it was the increased convenience that appealed, and 27% were drawn by the simplicity of operating the system remotely. It’s also feeding through into the appeal of specific product features, with voice control now considered a baseline across certain smart device categories, such as robotic vacuum cleaners, intruder security and TVs. All this should feed into strategies for product development going forward.
It’s important to note that premiumization isn’t the trend it was during the height of the pandemic. In fact, premium brand growth is largely on pause as the ongoing cost of living crisis dampens consumer confidence.
But that doesn't mean consumers are entirely unwilling to indulge, particularly where brands and retailers have opted for product development strategies that speak to their needs. On the one hand, both the pandemic and now the cost of living crisis have created far greater polarization between different demographics, with consumer confidence varying significantly by age, geography and income. That leaves scope for brands and retailers to pitch premium products to those households less affected by inflationary pressures.
On the other, even where confidence across a particular customer segment is low, they may still splash out when a product feature serves to elevate their experience. In fact, during H1 2022 those products boasting higher end features fueled much of the value growth, outperforming the market average. That included products such as built-in hobs with integrated hoods (+25%), washing machines with a steam function (+11%) and refrigerators with French doors (+12%).
Business decision makers in Consumer Technology and Durables should rethink their premium product development strategies against this backdrop. They could consider, for example, how incremental product innovations can nudge up average price by satisfying consumer demand for richer product experiences.
Though omnichannel strategies are established within Consumer Technology and Durables, the importance of experience for global consumers in 2022 should motivate brands and retailers double down on their efforts to deliver brand engagement, both online and offline. Consumers now expect not only a seamless transactional experience, but creative, multichannel content that inspires and informs across multiple touchpoints.
Meeting these expectations can take a variety of forms. It may include leveraging next-gen digital technologies in brick and mortar stores, or exploring emerging online commerce platforms designed to build excitement, such as livestreaming. “Whatever form it takes, business decision makers should design strategies that transcend barriers between these different channels, and deliver a seamless experience for consumers,” adds Nevin. Learn more on delivering a compelling customer experience in an omnichannel environment here.
Creating product development strategies to elevate experience
Despite an end to Covid-19 restrictions, the ability for product development strategies to drive an elevated experience – either via performance, simplicity, premium features or omnichannel engagement – remains a key trend within Consumer Technology and Durables.
Though an ongoing cost of living crisis has dampened consumer confidence, there are shoppers for whom experience demonstrates significant added value in challenging times, value for which they are willing to pay despite the pressure on budgets.
And for brands and retailers, this creates a clear avenue for growth against a challenging backdrop.
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The data in this article has been collected from GfK Market Intelligence: Sales Tracking and GfK Consumer Life Global.