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HomeState of Tech and Durables2023 global industry report executive summary META

The 2023 picture - META

The first half of this year has seen META consumers returning to increased level of spending for Consumer Tech & Durables (T&D) - especially domestic appliances.

After the sharp growth in sales for META’s T&D market in 2020 and 2021, last year’s revenue stayed flat. However, the first six months this year have seen a +4% increase in revenue compared to the same period in 2022.

Purchases of domestic appliances have led this positive bound, driven by new markets opening in the Middle East, and inflationary restrictions in Turkey and South Africa driving a change in consumers’ willingness to buy. Sales revenue has been especially strong for small domestic appliances, growing +41% in January to June this year compared to the same period last year.

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Product innovation

Disruption driven by launches of products offering dramatic innovation has been low this year. This means that META’s consumers have often not always seeing a persuasive reason to buy the latest, newly launched products in certain categories, rather than buying an older model. Across TVs, tablets and some home appliances, models launched two or more years ago make up the same share of purchases as we were seeing in 2019. An exception is smartphones, where new models have taken a greater share in Q1 this year compared to Q1 2019.

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While significant discounts obviously impact retailers’ margins, promotional activities seen across META so far this year are approaching levels last seen in 2019. These events are motivating consumers to open their wallets, and we expect similar promotions will be crucial to trigger volume demand in the remainder of 2023.

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What factors will drive consumer spend in 2024+?

  • 1. Product lifetime costs

    As well as price, shoppers are also considering a product’s operational costs across its full lifetime – it’s durability, repairability, energy use. The crucial question is: which factor takes the lead at point of purchase?

    • 41% of panel TV buyers globally say “durability” is an important aspect in making product choice – up 14 pp in two years.
    • 41% of consumers in META bought energy-saving products to save money in the long run

    Source: gfknewron Consumer 2023 & GfK Consumer Life 2023

  • 2. Making life easier

    Robotic, multifunctional, smart, and cordless products that are easy to use and make lives more convenient continue to outperform the category average. Opportunities lie in products offering AI-controlled energy saving.

    • 57% in META say “I really like the idea of technology that 'knows' me and can make recommendations and take actions based on my wants and needs”
    • 49% in META are prepared to pay more for products that make their life easier

    Source: GfK Consumer Life 2023

  • 3. Individualism and the tailored experience

    Aspirational design continues to drive purchases, but “solutions looking for a problem” are out. People are keeping their ‘treat myself’ spend for products designed specifically for them as an individual. Examples can be seen across gaming, digital content creation, photography, gardening, and more.

    • 46% in META say “It is important to indulge or pamper myself on a regular basis”
    • 54% in META say “I like to buy products that can be tailored to my needs.”

    Source: GfK Consumer Life 2023

  • 4. Environment and sustainability

    70% of people in META see “Global climate change / global warming” as a very or extremely serious issue. This affects consumer spending in two ways:

    • Needs-based purchases to combat climate effects: electric fans, air purifiers, air conditioners
    • Values-based purchases that support products and brands that are eco-friendly.

    Consumers’ expectations here are expanding. In order to be perceived as genuinely eco-friendly, manufacturers and retailers need to be able to point to everything from the suppliers they work with; to their products’ material, packaging, transportation, durability, recyclability; to their support of environmental or humanitarian causes.

    This is a natural expansion of what we are already seeing at product level. In the EU5’s highly competitive smartphone, mobile and phablet market, two-thirds of sales revenue in January to June this year came from products that have 3 or more eco-claims. With a growth rate of +22%, these items are substantially out-performing the rest.

Planning for 2024+ global recommendations

How do manufacturers and retailers capitalize on the consumer trends above to shape an ambitious but sustainable strategic plan and budget allocation for 2024+?

With budget planning for 2024 in full swing, these are our global recommendations on how to drive growth over the next few years. The local market and consumer landscape set out above will drive how best these are implemented at regional and country level.

1. Invest in targeted innovation (product & service)

Innovation continues to appeal but must deliver value that is directly relevant to the consumer’s life. Develop targeted, consumer-centric use-cases that show the benefits of upgrading to ‘affordable premium’ models.

2. Build up your brand to be a differentiator, as well as your product

The emotional connection between consumers and a brand plays a crucial role in competitive markets. Balance tactical activity with long-term, upper-funnel brand marketing that allows you to differentiate based on brand, rather than product or pricing alone.

3. Intensify manufacturer-retailer collaboration to optimize omnichannel category management

By teaming up to deliver consumer-centric planning that is unified across their respective merchandising, marketing, and supply chains, manufacturers and their retailers can optimise their mutual goal of creating a consistently personalised and enjoyable product experience at every touchpoint.

4. Planning for the upcoming shopper generation

Gen Z will soon surpass millennials in size. Two-thirds are aged 15-24 and starting to frame opinions about brands. They consume 53% more content than the average but spend 50% less time on content than millennials. Like any generation, they include complex segments with differing demands.

5. Review regional and category footprint to capitalize regional growth opportunities and mitigate individual category risks

Each region has unique market, category, and consumer dynamics. Manufacturers and retailers must have a full view across all regions and categories, and map this against their own portfolio, to pinpoint where growth opportunities exist for their products.

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