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  • E-commerce continues to gain ground in technical consumer goods markets
    • 08/30/18
    • Retail
    • Global
    • English

    E-commerce continues to gain ground in technical consumer goods markets

    GfK findings for the global technical consumer goods retail markets for IFA 2018 in Berlin

  • Need for performance drives global PC market
    • 08/29/18
    • Technology
    • Point of Sales Tracking
    • Global
    • English

    Need for performance drives global PC market

    GfK findings for the global PC market to be released at IFA 2018 in Berlin.

  • Global smartphone market goes large for premium priced devices
    • 08/29/18
    • Technology
    • Point of Sales Tracking
    • Global
    • English

    Global smartphone market goes large for premium priced devices

    GfK findings for the global telecom market to be released at IFA 2018 in Berlin.  

  • High-end TVs dragging the market upwards
    • 08/29/18
    • Technology
    • Point of Sales Tracking
    • Global
    • English

    High-end TVs dragging the market upwards

    GfK's findings for the global TV market to be released at IFA 2018 in Berlin.

  • Audio devices become smarter and sound better
    • 08/29/18
    • Press
    • Media and Entertainment
    • Global
    • English

    Audio devices become smarter and sound better

    Findings for the global audio market to be released at IFA 2018 in Berlin.

  • German consumer climate declines slightly once again
    • 08/29/18
    • Retail
    • Global
    • English

    German consumer climate declines slightly once again

    Findings of the GfK Consumer Climate Study for August 2018

  • Developing economies: impactful, fluctuating and maturing
    • 08/28/18
    • Technology
    • Global
    • English

    Developing economies: impactful, fluctuating and maturing

    While to have a strong presence in the developed markets is very important to any global brand, the weight of developing economies continues to be impactful internationally. Developing Asia including India plus the Chinese market weigh in with about 41% of all smartphone purchases in the first half of 2018.

    Telecom represented the fastest growing product group in China and India

    With 12% revenue CAGR over this period, Telecom represented the fastest growing product group in China and India. In case of major domestic appliances in the first half of 2018, it is the recoveries in Russia (+11 percent) and in LATAM (+9 percent) that are particularly exceptional. Also APAC stayed on a growth track contributing 66 percent of the total growth. With regards to the TVs, LATAM fueled the global growth heavily. Those countries contributed in the first half of 2018 with a sales value growth of 25 percent towards the global turnover increase in the TV market.

    These market growth opportunities do not come without a risk though. In the TV market, for example, LATAM sales unit growth fluctuated between +19 percent year on year in 2014 and -28 percent in 2015, to be up again at +35 percent in the first half of 2018. In case of CIS region, the drop in 2015 in the TV product category was even -47 percent in 2015 to be up at +15 percent in 1H2018.

    Developing economies are reaching higher levels of market penetration of mobile phone subscriptions that creates new market dynamics altogether across all our panel market product categories. Designing and retailing technology and durable goods for these markets is increasingly becoming more about finding the right replacement and upgrade proposition rather than identifying offering for the first time ownership.

    Developing economies are maturing

    Hand in hand with governments’ focus on sustainable reforms that is linked to economic development and resulting in growing disposable income and growing middle class population, developing economies are maturing. While connecting the unconnected continues, migrating customers to data plans, replacements, upgrades, move to premium priced devices and creating suite of additional services generates pockets of growth that are shifting to where the money is.

     

    This blog has been written by the Strategic Insights team.

     

    To gain actionable insight into the trends driving innovation across the tech industry, take a look at our resources section.

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  • Ongoing disruption: the growing dominance of online retail
    • 08/28/18
    • Technology
    • Global
    • English

    Ongoing disruption: the growing dominance of online retail

    Customers are increasingly asking for omni-channel shopping. Our FutureBuy study indicates an increasing preference of online retail and mobile shopping around the globe. Respondents increasingly agree with statements such as “I really need the shops and services I use to be available at all times” that went up by 4 percent between 2016 and 2018.

    China is setting the pace for online retail

    For technical consumer goods in the first six months of 2018, in Western Europe, the value share of online sales has grown to now 25.3 percent. This is plus of 8.2 percent compared to 1.3 percent growth of the total market. Globally, China is setting the pace for online retail. Being the largest online sales market, another significant increase of more than 20 percent is accomplished. Driving forces in China are the Telecom and Major Domestic Appliances markets – and more potential can be foreseen for the future.

    Traditional season peaks lose relevance with online promotions

    Another serious impact of online retail are shifts in the seasonality of sales. Online retail tries to differentiate through their own promotions and those are easily scalable and hence turnover intensive in a digital environment. Consequently, traditional season peaks like Christmas season lose relevance with online promotions like Cyber week, Singles Day/Double Eleven or 618 (JD.com). While online retail sales are growing up, assortments do the same.

    More growth potential is explored by online retail going mobile. Share of respondents agreeing with “My mobile device is quickly becoming my most important shopping tool” has increased from 34% in 2015 to 45% in 2017 in our FutureBuy study. Convenient shopping online, even on social media or wherever consumers see goods they may want to have – yet another level of easy shopping. In APAC, already 29% of all MDA purchases were done via a mobile device in 2017 (up from 25% in 2016) while in Europe is behind with only 12% in 2017 (also up from 9% in 2016) here, Notebooks still account for the biggest part of purchases (43%).

     

    This blog has been written by the Strategic Insights team.

     

    For more insight on the most important trends driving innovation across the tech industry, visit our insights section.

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  • Only the best will do: the growing appetite for premium features
    • 08/28/18
    • Technology
    • Global
    • English

    Only the best will do: the growing appetite for premium features

    With increasing wealth around the globe and a growing target group which is enabled to buy premium products, value becomes a more and more important driver. Consumers’ preference for “owning fewer but higher quality items” came strongly across in our latest Consumer Life study. Especially in developed and saturated markets, value growth is the main opportunity for retailers and industry together.

    Consumers are upgrading their devices

    At the forefront of this development smartphones reveal this trend. While many markets already reached a certain saturation and global units sales are not growing, the value development is still promising. Consumers are upgrading their devices and flagship models are well in demand.

    Also for TVs, premium features such as 50+inch sizes and OLED turn a negative volume market into a value growth market. Further prominent examples are audio devices equipped with Dolby Atmos or DTS-X sound technology as well as high performance headphones and headsets above 150 Euro selling price.

    Multifunctional appliances with premium price are strong in demand

    Willingness to invest in the place to live is reflected by the growth of value segments in household appliances. Multifunctional appliances with premium price (for example washdryer, hobs with integrated hoods or combi-steam ovens) are strong in demand and spark value growth. Also lifestyle plays a role, especially for small domestic appliances, when consumers are willing to spend more than 300 Euros for a rechargeable handstick vacuum cleaner or a robot.

    While demand for desktop computers or notebooks is still under pressure, also here the increasing sales of gaming PCs results in elevated prices and growing premium segments. But also non-gaming PCs/notebooks pick up in selling price and drive the market value again.

    Overall, it becomes evident that this overarching premium trend originates in consumers choosing for value segments offering more performance, convenience, quality or similar. While this drives prices up as a mix effect, like-for-like products usually are still experiencing price pressure. Consequently, permanent innovations justify the premium price which consumers are willing to pay in 2018.

     

    This blog has been written by the Strategic Insights team.

     

    Check out our further insights to get the important information on the top trends driving innovation.

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  • Performance matters: discerning consumers favour high-end features
    • 08/28/18
    • Technology
    • Global
    • English

    Performance matters: discerning consumers favour high-end features

    With customers becoming increasingly conscious about the performance of their devices, a trend towards high-end feature specifications is observable in smartphones, consumer electronics devices, home appliances and IT equipment.

    Why performance matters?

    On the consumer side, the expectation for rich experiences on their devices is growing. Share of respondents who strongly agree with “I value experiences more than possessions.” in the latest Consumer Life study increased to 45%. Processing-hungry applications are emerging and put pressure on the performance capabilities of the devices. These capabilities are becoming crucial for the seamless usage of the applications.

    HDR & OLED are on the rise

    4K resolution, bigger and better screens, superior front and rear cameras are a few of the key characteristics for a mobile device. 50”+ TV sets stood for 50% of the sales value in the first half of 2018 and grew significantly. The main technological advancements here are HDR & OLED, which are currently on the rise. The PC markets follow a similar trend to high performance, which is reflected, among others, in the growing value share of performance processors, 8+ GB RAM, solid state drives and full HD displays.

    Within in major domestic appliances big is beautiful. Capacity is the key-word that drives all major markets. This translates into increasingly larger loading capacities in washing machines, taller and wider refrigerators, as well as more spacious oven cavities.

    Consumers perceive high performance products as a long-term investment with a long lifecycle, which does not outdate too quickly. The buyers associate these devices with superior experiences and higher quality.

    Manufacturers are constantly on the rush

    On the industry side, manufacturers are constantly on the rush for the ‘next big thing’ and operate in a fierce competitive environment. High-performing products demonstrate their ability to innovate and generate more awareness for the brand. In times of decreasing margins, high-end products can act as turnover stabilizer, especially in volatile markets.

     

    This blog has been written by the Strategic Insights team.

     

    You can learn more about the trends driving innovation, check out our other insights.

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  • Always within reach: being connected is the new norm
    • 08/28/18
    • Technology
    • Global
    • English

    Always within reach: being connected is the new norm

    Being connected is the norm not only for consumers but in the meantime for devices as well. Connectivity has become an integral part of the everyday life. With smart features growing in popularity there is increasing opportunity for voice controlled user interfaces based on big data and artificial intelligence. Through expanding its presence, the AI might become the missing dot within the smart home.

    In the past, smart was offered as an overarching promise to turn everything in people’s homes smart. While the ‘smart’ promise in general resonated well with consumers, currently all indicates that well-crafted individual smart solutions are the way to commercialize it. Manufacturers of security cams or LED lamps first leveraged that trend and came up with handy to use, smartphone-controlled products.

    APAC consumers are taking the lead in connectivity

    Being smart and connected has found its place in both small and major home appliances and contributes to their increasing value turnover. The APAC consumers, are taking the lead in connectivity. Digitization is treated as a priority and consumers are openly taking on connectivity and integrated digital solutions. In the first half of 2018, China alone accounted for nearly 50 percent of all smart appliances sold, with growth rates still around 30 percent. In APAC, 23 percent of revenues came from smart appliances compared to only 10 percent in Western and Eastern Europe. Concrete use cases of smart home appliances are vacuum cleaner robots (more than +100%) and air cleaners.

    Smart TVs have conquered the living room

    Smart TVs have conquered the living room (85 percent value share in the first half of 2018), spurred by the on-demand revolution. Streaming music services also rely heavily on the connectivity and multi room devices (+11 percent Jan-Jun 2018), which allow to play different songs in different rooms are enriching the home entertainment experience.

    Embedded AI assistants further facilitate the control of the devices and contain the huge promise to become the smart home hub and consolidate all smart devices on one platform. One of the previous barriers for smart technology in turning our homes really smart was fragmentation of the user interface. Each smart device was only compatible with other smart devices within the manufacturer’s dedicated web or smartphone app. Arguably, whether voice or display-controlled, AI assistants show a potential to consolidate all smart devices on one platform. Once a system is set up this way, AI would be able to create a common language between these devices without being hindered through network standards, protocols or proprietary systems. By creating a suite of home applications on this basis, the concept of smart home could become an even stronger commercial opportunity.

     

    This blog has been written by the Strategic Insights team.

     

    To learn more about the key trends driving innovation across the tech industry, take a look at our insights section.

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  • What drives price movements of tech devices?
    • 08/20/18
    • Technology
    • Online Pricing Intelligence
    • Trends and Forecasting
    • Global
    • English

    What drives price movements of tech devices?

    It is a common assumption among consumers that the retail price of flagship tech devices and features will gradually drop over time. Moreover, it is often assumed that the release of new models accelerates the price decline for the, now obsolete, previous models.

    That means consumers often think it is better to wait a couple of months before buying the latest tech device. But how much is price affected? We looked at a huge range of online pricing over time, to answer this question.

    How far do the prices of tech devices and features really fall, over time?

    The worldwide TV market recently saw the introduction of exciting new display technologies, such as OLED and QLED. Looking at the average price of three 55 inch OLED/QLED TVs (Samsung, LG, Panasonic), we see that the average online price has fallen by 34% between October 2017 and July 2018.

    Other consumer electronics categories show similar trends, but to lesser extents. For example, the online retail price of a laptop featuring a Core i7 processor has fallen 8%, on average, since the beginning of the year. Similarly, the average price of a smart watch has fallen 6% year-on-year (YoY) to August 2018.

    Overall, there is a considerable degree of variation between different products, reflecting their peculiar product characteristics and strategies, but data suggests a general downward trend over time for ageing technology features.

    Do new model releases accelerate price declines for older models?

    Sim-free smartphones offer a great case study in this area. So, let’s look at the impact that the release of two flagship devices (Galaxy S9 and iPhone 8) had on the average online prices of previous models (Galaxy S8 and iPhone 7).

    The release of Samsung’s Galaxy S9 in March 2018 seems to have had a noticeable influence on the price of the Galaxy S8, which decreased 14% in the following 5 months. A similar, albeit weaker, dynamic applies to Apple. The iPhone 8 release in September 2017 induced a decline in the price of an iPhone 7 of 6% in the following 5 months.

    It is worth noting that the average online retail price of the Galaxy S8 and iPhone 7 does follows a long-term decline trend (the iPhone7 lost 7% and the Galaxy S8 lost 15% YoY, compared to July 2018 prices), but it seems clear that the release of new models certainly had an influence on price movements.

    However, this is only half of the story…

    The price variations we tracked during the considered period highlight a key contrast between the approaches of the two brands.

    Samsung’s device is subject to higher seasonal fluctuations, while Apple focuses on limited price variations in key periods (e.g. Black Friday). This shows that, although there is a long-term price trend in place, brand strategies and retail promotions can have a big influence on average prices and drive considerable discounts.

    This dynamic is even more apparent if we overlay the average online retail price and the lowest online retail price. We can see from the chart below how promotional prices can cut deep under average prices and anticipate the price decline trend by many months. For example, Galaxy S8’ lowest price touched £550 in November 2017, 6 months before the average price reached the same level.

    Conclusions

    The assumption is true, that there is a general trend of price decline over time key tech devices, which is influenced by the faster release of new and upgraded models. However, long-term price movements are also heavily influenced by brand strategies and retail promotions, which can drive deeper price cuts across a shorter amount of time.

    This has important implications for both consumers and marketers:

    For a consumer wanting to buy the latest technology or a newer model, looking out for key promotional periods is a better strategy than waiting for the price to drop over time.

    For Retailers and manufacturers bringing new technology and new ranges to market, the key lies in understanding consumers’ expectation that prices of older models will fall, and their consequent spending behaviour, based on that belief.