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Trends and Forecasting

Today’s speed to market of new offerings and shortening product lifecycles place a unique pressure on businesses to stay ahead.  Consumer purchasing behavior is shifting more rapidly than ever.

To succeed, businesses need accurate sales forecasts -- based on robust analysis -- and the most up-to-date purchasing and market trends.

We deliver detailed forecasts of consumer demand for technology devices, as well as global technology market trends. 

Our forecasts are built using the world’s largest sample of point of sales data, combined with our global expertise and local knowledge. This combination provides our clients uniquely granular and timely forecasts of future demand – forecasting what products consumers will purchase, in what volume, at what price, and where.  

Forecasting for investors and capital markets

Institutional investors face pressure to perform. To succeed, businesses need visibility to significant trends at the earliest stage(s). Businesses need to acquire reliable and compliant information on where to invest. 

We provide investors with robust forecasts using the world’s largest sample of point of sales data. We predict and document turning points in consumer demand, providing regular, detailed company analyses on technology hardware, semiconductor and consumer durable companies. 

Our forecasts allow investors to make successful recommendations backed up by credible and compliant sources.

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    • 02/24/20
    • Retail
    • Technology
    • Point of Sales Tracking
    • Trends and Forecasting
    • TEMAX
    • Global
    • English

    Coronavirus impact on the tech market

    The epidemic of SARS-CoV-2, otherwise known as coronavirus (COVID-19), is already affecting retail and technology markets. The coronavirus impact on the tech market has already begun with major brands such as Apple and Nissan reporting knock-on effects due to their supply chain and production dependency on China. How fast and how great of an extent can we expect to see similar impacts expand across industries? The timing of when the outbreak can be brought under control will heavily determine the severity of market disruptions.

    Coronavirus (COVID-19) impact on the tech market is a global issue

    Most major manufacturers rely on parts or production capacities from China, but China’s workforce and manufacturing capability have been hit hard. China has more than 75,000 people infected with COVID-19 as of Feb 20th, majority of the workforce is staying home. Blue-collar workers are just now cautiously returning to their manufacturing sites after being away for some weeks while office employees are preferring to compensate by working from home. The coronavirus impact on the tech market is putting a huge pressure not only on the global supply chain but also on the retail and service industries. While some manufacturers and retailers are able to live off their stocks for a certain time, the scarcity of available products will become an issue very soon. This is especially so for the tech industries even with manufacturing capacities in China starting to produce again. The question is whether consumers will be willing to postpone purchases of out-of-stock items or whether they will consider an alternative product that is available right away. Although some companies are already making plans to diversify their sourcing, the supply impact will be unavoidable in the short term. Countries neighboring China might benefit economically from these supply chain and production moves, especially those with strong manufacturing and tech footprint.

    Consumer attitudes towards price and immediacy

    Naturally, price becomes a greater factor at times of short supply and is something consumers are very sensitive to. Globally, 44% of shoppers say they have increased how often they compare prices across different stores compared to a year ago, with older age groups being extra prone to this. At the same time, 61% of the consumers point to the price as the most important driver when choosing the final product. The effects of elevated pricing due to reduced supply and product availability can range from consumers delaying a purchase to choosing an alternative product on stock, or even not purchasing a product at all. If it’s a case of postponed demand, this can be satisfied in the following quarters, if there is enough capacity on the manufacturer side. The more negative scenario might be that these postponed purchases will not materialize at all, which will lead to a significant market decline and lost sales opportunities. The consumer expectation for immediacy is core to these developments especially when it comes to certain consumer segments who highly value immediacy in their purchases – some even at the expense of quality. Globally, 31% specifically say they are “willing to settle for an inferior product or service if it’s available when I need it”. Added to this, 22% in Western Europe say they really need the shops and services they use to be available at all times. All of this can negatively impact retailers’ and manufacturers’ turnover.

    What are the signs that manufacturers and retailers should watch for?

    Risk mitigation and management during disruption like this coronavirus impact on the tech market depends on being able to spot the early changes in buying behavior. The following considerations are important signs to watch for when it comes to navigating through these turbulent times:
      1. Are consumers postponing big-ticket purchases such as TVs or fridges?
      2. Are there significant changes in the competitors’ performance?
      3. Which sectors and product groups are hit first (or the hardest) by the drying supply chain?
      4. What are the changes to online vs offline share of the market as consumers choose to stay at home and avoid contact with crowds (e.g. in China and rest of Asia)?
      5. What effects will postponing launches have on key markets?
    The lack of responsiveness to such disruptive challenges usually comes at a high price. Quick availability of granular data can provide businesses with timely insights to stay on top of these questions and react fast with informed decisions. Data in this blog is from the following reports: GfK Consumer Life 2019, GfK Consumer Insights Engine 2019 and GfK Future Buy 2019.

    Want to spot early changes in buying behavior?

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    • 02/06/20
    • Retail
    • Technology
    • Consumer Goods
    • Point of Sales Tracking
    • Trends and Forecasting
    • TEMAX
    • Global
    • English

    Peak season sales 2019: Retail lessons learned

    It’s not a surprise – for many retailers, their Christmas season performance is the decisive factor for the entire year’s financial success. This is particularly true for those selling tech and durable goods. While peak season sales embrace Black Friday, Cyber week, Christmas week and post-Christmas promotions, it’s increasingly difficult for retailers to set the right priorities for each of these events. To do so, they need the best intelligence on what is selling and when.

    Each peak season is different

    When it comes to Black Friday, Cyber week, Christmas week and post-Christmas sales, retailers need to know that each peak season is different. They must react to different consumer expectations and demands to succeed in the peak season sales. First, the size of the business opportunity must be considered. The fact that Black Friday week and the following week after it are responsible for more than double the revenue of an average week indicates where to focus most energy. Combined with a 16% growth compared to 2018, this sub-season is most crucial for securing revenues and margins. The Christmas weeks (week 50 and 51) may have fallen behind Black Friday/Cyber week, but they still generate 45% more revenue than a usual week. However, relevance appears to be declining over time, for instance, in 2019 turnover was slightly below that posted in 2018. The post-Christmas season (weeks 52 to 02) is different again. Here we see a 12% uplift versus an average week, with growth in 2019 amounting to almost 10% compared to 2018. Vouchers and gift cards – as well as having the time to shop – are key drivers of consumer demand during this time of the year. The center of gravity keeps shifting to the Black Friday weeks, particularly for big-ticket item purchases. Every fifth Euro of the year is spent within these seven weeks of the peak trading season. Or put another way, the season’s performance is about 50% higher than that of an average retail week.

    When is the best time to promote a product?

    Consumer purchase behavior captured in GfK’s weekly Point of sales Tracking for tech and durables tells the story of what to promote and when it during the peak season sales weeks:
    •  Black Friday/Cyber Monday: Consumer Electronics (CE) are the star. Big-ticket items such as TVs soar in Brazil, Spain and Italy. Audio devices contribute strongly to the uplift in categories such as Small Domestic Appliances (SDA). Consumers are increasingly seeking out premium segment purchases, with a focus on entertainment categories including PTV and Audio. Overall, attractive discounts are the trigger to save the most Euros in absolute terms.

    •  Christmas: SDAs, Photo and IT product categories reveal the highest momentum. Printers, hairstyling tools and coffee machines are key movers in the final weeks of the year. The real gifting season peaks now. Smaller ticket items sell well, with a focus on traditional shops rather than online retail. Products to place as gifts under the tree are key.

       

    •  Post-Christmas: Here we see a shift back to CE, namely audio devices. Also, SDAs are more in demand this season. Price promotions pick up again and a more normal mix of assortment is in demand. E.g. Major Domestic Appliances see relative strong demand compared to the Christmas weeks. SDA and CE categories maintain their seasonal strength. 

    How do you protect sales margins?

    Looking at the level of discounts granted, the pressure on margins can be massive. But not playing along is not an option at all – consumer expectations for seasonal promotions become stronger every year and is a major trigger driving demand. The only option to secure peak season sales performance is to listen to consumer needs and behaviors to look out for opportunities. We break it down to three main takeaways: 1. Less complexity: This is the new consumer mantra. According to our latest FutureBuy study, 62% of global tech and durables shoppers complain about too much choice. This hampers decision-making. Instead, we recommend promoting fewer hero products that deliver performance and simplification.

    2. Clear communication: Alerted by media reports questioning the validity of seasonal promotion deals in previous years, consumers are increasingly skeptical about sales, discounts and promotions. It’s important that they are assured that price drops are genuine and that they see Black Friday and other seasonal price drops as offering a real benefit to them.

    3. Premiumization: Owning fewer but higher quality products is a clear and significant trend, especially during Black Friday week. Offering product segments one or two levels above the standard segments yields revenue potential, despite discounts to be granted. That’s why in 2019, average prices rose to a new peak compared to 2018 – at more than 40% above an average week. We saw this in the success of OLED and >50-inch TVs, and headphones/headsets, where prices rose by more than 50% on average Demand was strong for high-performance notebooks for gaming, and with ultra-thin designs, as well as true wireless in-ear Bluetooth headphones. Similar trading-up patterns were visible in the Telecom and Domestic Appliances markets. Ultimately, this ensures interest and traffic, and supports consumers’ aspirations.

    How will peak season sales look like in 2020?

    The year-end peak sales season has undergone a major shift over the past years with Black Friday dominating the promotional calendar as the game-changer. As this trend grows, markets have become more predictable as sales dynamics repeat themselves. Different sub-seasonal focus areas have established themselves in most European countries, as well as in markets such as Brazil. Knowing the details on a country and product level will support profitable decision making for the peak season sales in 2020.
    • 12/04/19
    • Trends and Forecasting
    • Global
    • English

    What does the future of Millennials look like?

    As the oldest members of this oft-discussed group prepare to turn 40, the future of Millennials will have a significant impact on the global marketplace. Although they haven’t suffered from a lack of media attention in the past decade, Millennials are worth another look simply because of their significant impact on the future. For example, they are currently overtaking Baby Boomers as the largest adult generation and approaching their Boomer parents in their share of the US electorate heading into the 2020 Presidential election. And in the past few years, they surpassed Generation X as the largest generation in the workforce. Millennials may also be the first truly global generation. Technology has broken down geographic boundaries, and these young adults are the product of not just their native cultures, but the tumultuous time during which they came of age. A second look at Millennials uncovers three key lessons that will be essential for engaging with them meaningfully in the future.

    Future of Millennials as parents

    Millennials are now the focal points of families and leading households that look quite different than those headed by previous generations. For example, GfK Consumer Life research shows that Millennials today are about as likely to be parents, but less likely to be married, when compared with Gen Xers at the same age in 2003. With Millennials leading more non-traditional households (e.g., single parents, unmarried couples), messaging needs to evolve to encompass these different types of families. Even more interesting is the marked difference in the way that Millennial moms and dads approach parenting today. In contrast to the Boomer tendency to raise “latch-key kids,” and Gen X’s “helicopter” parenting approach, Millennials have their own unique take on the parent-child relationship. Research from GfK Consumer Life shows that they reject “over-scheduling” by reducing the amount of time their children spend on extracurricular activities, are more liberal when it comes to limits on a child’s technology and media exposure, and are eager to spend more time with their kids on a variety of activities, from video and board games to shopping and exercising. With less of a strict dividing line between parent and child preferences across categories like media, entertainment, and health, brands can rethink how their offerings are classified and marketed; they can also create more opportunities & platforms for parents and kids to interact.

    Financial future of Millennials

    Coming of age during the Great Recession left many Millennials with low incomes and record levels of student debt. In fact, the typical Millennial’s net worth is 40% lower than that of Gen Xers in 2001, and 20% below what Boomers experienced in 1989. What’s more, significant financial polarization exists within the Millennial group: income gaps by levels of education are significantly wider than those of previous generations, and the change in net worth among young adults over time has declined among unmarried Millennials while rising among those who are married. And while many did receive financial help from their parents during tough times, many Millennials actually have been playing the caregiver role with their own mothers and fathers. With many forecasting that a possible recession in 2020 will again hit Millennials the hardest, brands need to adapt pricing, marketing, and merchandising to reflect a challenging and more diverse economic reality. Financial stress is just one of the reasons that Millennials have come to be known as the “burnout generation.” This segment—particularly those who are also parents—tends to lead on many indicators of modern-day “hustle culture” tracked by GfK Consumer Life. For example, they are very likely to report high stress levels and more likely than average to admit that they work most weekends and are often so busy, they can’t finish everything they need to do in a day. They’re not “lazy,” they’re simply exhausted – and it’s likely that shaky job security and major financial commitments are partially driving this mindset. This tendency to “hustle” is not unique to Millennials in the US – members of this generation index higher than average on aspirational values such as social recognition and status across all regions of the world. But while Millennials tend to lead on many of these attitudes, they aren’t the only generation suffering from burnout; recent studies of Generation Z (the generation following Millennials) show record-high stress levels among this emerging segment as well.

    Fun is still a priority for the future

    Despite their stress – financial and otherwise – Millennials have not yet outgrown the focus that has long distinguished them from other cohorts: their desire to have a good time. GfK Consumer Life research finds that personal values such as enjoying life, excitement, and having fun are still prioritized more highly among this generation than older age groups. Millennials’ signature optimism hasn’t taken too hard of a hit, either: they report high levels of confidence about their own immediate futures, as well as the lives their children will lead as adults; this mindset is consistently higher than average on a global level as well as in the US. Further, Millennials are more likely than average to seek novelty and fun in everyday products. Appealing to Millennials’ pleasure-seeking tendencies, and giving them enjoyable outlets in their daily lives, will inspire brand loyalty.

    What can brands do in order to keep up with these shifts in Millennials?

    In just a few decades of life, Millennials have experienced significant social, political, and economic upheavals, many of which have had a long-lasting impact on their lifestyles today and prospects for the future. As they enter the “middle era” of their lives with different approaches than their predecessors, brands will be wise to understand that:
      • The economic instability that has defined, and will continue to impact, this generation gives brands the opportunity to offer health innovations to relieve Millennials of their financial stress
      • Millennial parents enjoy a closer bond with their children compared to their predecessors; communicate to the entire family, not just the parent or the child
      • The future of Millennials still needs to include fun – give them opportunities to enjoy life!

    Get updates on consumer trends & insights

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    • 11/13/19
    • Retail
    • Trends and Forecasting
    • TEMAX
    • Global
    • English

    4 facts you can’t ignore about Black Friday

    Seasonal promotions are one of the core reasons consumers make a purchase. The importance of good deals to consumers can be clearly seen in GfK’s weekly long-term sales trends for Technical Consumer Goods. GfK has found that about a quarter of cumulative global sales come from select promotional events that only take place during 10 weeks of the year. Of course, there are regional differences, but Christmas, Singles’ Day and Black Friday dominate the promotional calendar in many countries around the world.

    1. Black Friday 2019 is timed perfectly

    Every year, Black Friday falls on the Friday after Thanksgiving in the US, which is celebrated on the fourth Thursday of November. This year’s Black Friday takes place on the latest possible date, 29th of November: right after payday and only three weeks before Christmas. As a result, many consumers will already feel the pressure to buy gifts and, probably more importantly, will have money to spend on Black Friday deals. For some shoppers, this might be the first time that they can go bargain hunting without having to organize a loan before making their purchase. This year’s Black Friday could well set new sales records thanks to its timing.

    2. Black Friday is bigger than Christmas

    Traditionally, the Friday after Thanksgiving has been regarded as the beginning of the United States’ Christmas shopping season. Today, both in volume and value, Black Friday is bigger than the original peak trading periods including Christmas and the January sales – and it continues to grow. Our Weekly Point of Sales Tracking shows that Black Friday week in 2018 generated more than double the turnover (+113%) of an average selling week across the EU5 (France, Germany, Italy Spain, UK) markets. For those countries plus Brazil, Black Friday is the most important week of the year in terms of sales value generated. Latin America has seen unprecedented peak sales during Black Friday.

    3. Black Friday attracts aspirational bargain hunters

    In general, consumers love bargains and they are actively looking for them. shows that with the ease of making price comparisons online, a growing number of consumers shop around before making a purchase decision. Globally, nearly half of all consumers (44%) have increased the frequency they compare prices from different stores. This is true for 58% of shoppers in Latam, 45% in Europe, 41% in APAC and 35% in North America.  And this is what makes Black Friday so successful and important – but retailers need to make sure the price drops are genuine in this environment of comparing prices. And our research shows that a significant proportion of shopping decisions might be driven by consumers wanting to treat themselves. A growing number of shoppers state that they want to “indulge or pamper themselves on a regular basis” or that they “prefer to own fewer, but higher quality items” or they “only buy from trusted brands”. These types of shopper attitudes give an indication of what aspirational bargain hunters could be looking for on Black Friday.

    4. It’s happening – so don’t fight it

    Black Friday has become an essential part of the annual retail calendar for deal-loving shoppers. So for retailers, it’s a question of “do or die”. To “do” it successfully, it’s important to understand the nuances of purchase behavior and shoppers’ attitudes. To make this key event in the “golden” quarter of the year deliver for your business, manufacturers and retailers alike need accurate weekly point of sale data to evaluate performance and plan tactics. In today’s competitive retail environment, it’s vital to respond quickly to consumer purchase behavior and competitor offers. And in the more mature markets, we’re seeing a trend in retailers and manufacturers finding new strategic answers on their quest to make Black Friday profitable despite the challenge of meeting consumers’ demand for bigger and better bargains. This trend is called “Premiumization” and it could transform Singles’ Day, Christmas and the rest of the 2019 shopping season.

    Can “Premiumization” save shopping season 2019?

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Molemo Moahloli
South Africa
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