Möchten Sie zur deutschen Seite wechseln?JaNeina
Close

Text summary

Dear visitors,

Thanks for your continued interest in our insights on the technical consumer goods market. With the relaunch of our website we are restructuring our content offerings. If you wish to receive market insights in the future, please do register here.

 

COVID-19 crisis has hit developed economies in Western Europe in an unprecedented way. A significant slow-down in economic growth and an increase in unemployment is expected to lead to reduced consumers’ purchasing. This will affect TCG sectors in Europe and worldwide. This is clearly visible already in Q1/2020 although only March has been the month slowing down the growth. Please visit the GfK resource center, containing all our latest market intelligence to help you manage disruption and make the right decisions for your business success.

    • 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?

    hbspt.cta.load(2405078, 'ac9177ea-0ae3-4836-bbc6-babf38e96d00', {});
    • 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.
    • 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?

    hbspt.cta.load(2405078, '9b56efc8-b37c-4efc-a368-d6deb0c4d6b3', {});
    • 10/16/19
    • Retail
    • Technology
    • Consumer Goods
    • Point of Sales Tracking
    • TEMAX
    • Global
    • English

    The importance of localizing your global e-commerce strategy

    One in every four US dollars spent on Technical Consumer Goods (TCG) today are for transactions made online, but it’s not a consistent global story of expansion. Therefore it’s time to rethink if your global e-commerce strategy on a local level. The growth of online shopping has slowed in some markets and where spend happens varies hugely by country and region. E-commerce share ranges from almost zero to more than one-third of turnover. The perception of online retail also varies, from a premium destination driven by promotion to a mass-market channel offering value-for-money solutions. In this article, we discuss the regional differences in sales dynamics, pricing and assortment to evaluate the characteristics of e-commerce.

    Global online shopping keeps growing, but…

    Where does the natural equilibrium between online and offline retail sit? There are already indications that growth is slowing in countries where online shopping is more mature. Globally in the first half of 2019, e-commerce increased to about 24% of total revenues (+1.6 percentage points), a flattening dynamic compared to past years, when almost three percentage points were gained annually. However, the global view masks local nuances. China is leading the online retail sector with a share of 36%. In the Chinese and other advanced markets, there’s a blurring of online and traditional retail concepts. For instance, e-commerce players have been moving from pure online stores and integrating traditional shops into their retail ecosystem to reach customers regardless of channel. Many brick and mortar retailers have been adding e-commerce operations and technology to add digital experiences to the traditional in-store shopping trip. Offering a seamless omnichannel approach is challenging the definitions of e-commerce and ‘traditional’ retail used today. Other regions are at a much earlier phase of the online retail evolution, such as Middle East/Africa and Emerging Asia (excluding China). Here, online sales account for about 5% compared to 36% of turnover in China.

    E-commerce pricing reflects a region’s socio-economic developments

    How online retailers are seen in different markets is not just about the assortment mix offered or their pricing, it’s about the socio-economic market situation and the adoption level of online shopping. In some markets, it’s predominantly the more affluent consumers whohave access to online shopping. Retailers have responded by offering premium items. This is the case in Brazil, where online retail offers a premium assortment mix and generates high average prices. Facilitated by online promotions, consumers buy premium product segments at an attractive price which is reflected in an above-average price index of almost 140% compared to the total market covering online sales. It’s a different story in the huge Chinese online market: internet shopping is highly adopted by consumers and online retailers employ a mass-market approach, facilitated by simple-to-use app-based payment systems, to sell lower-end product segments at entry-level prices. Hence, the price index is below 60%. For both markets, a convergence is visible – but they are still distant from a 100% price index average.

    Getting the assortment spot on: Balancing conflicting customer needs

    It’s not only socio-economic considerations adding to the challenge of creating the right e-commerce strategy – individual consumer needs and wants are also important. Where consumers are in their purchase journey determines how they view the product assortment on offer. For instance, shoppers in the exploration phase who are unclear about what to buy may perceive too many choices as a barrier for their decision-making. On average, shoppers have 2.7 times more choice online compared to what is offered by a traditional retailer. However, overwhelming choice is a common concern among consumers: 59% agree globally that “there are too many choices in many of the categories I shop” (GfK FutureBuy study, 2019). On the other hand, for a shopper who is at the end of a purchase journey and ready to buy, tan online retail store with a large assortment can maximize their advantage. Offering a choice of both touchable and digitally available products is the solution desired by the consumer. In-store, retailers need to offer the right assortment to make a directional decision about what to purchase. Should consumers want to access more product variants, this can be done via a virtual assortment of stock at the location, or at a central warehouse.

    There’s no one-size-fits all approach to e-commerce strategy

    It is essential to understand local and regional differences that affect your strategy: from the level of online shopping adoption to the assortment and pricing of your range, to how channel dynamics are changing, to where consumers are in the various stages of the purchase journey. GfK’s Point of Sales Tracking can help you keep up-to-date with how online and offline sales channels are developing at a country level. This will enable you to adapt your e-commerce strategy to stay relevant for consumers and the market—wherever that may be.

    Stay on top of sales channel dynamics
    with GfK’s POS Tracking

    hbspt.cta.load(2405078, 'da5bc1b2-c1b5-4bd2-93e3-681f23d8b38c', {});

Table summary

Western Europe 15 - Q1 2020
Q2 2019 M. EUR Q3 2019 M. EUR Q4 2019 M. EUR Q1 2020 M. EUR Q1 2020 / Q1 2019 / +/- % Q1 2020 M. EUR Q1 2020 / Q1 2019 +/- %
Consumer Electronics (CE) 5,144 5,451 8,568 5,691 -6.4% 5,691 -6.4%
Photography (PH) 961 929 1,050 709 -19.2% 709 -19.2%
Major Domestic Appliances (MDA) 8,212 8,869 9,728 8,449 -0.4% 8,449 -0.4%
Small Domestic Appliances (SDA) 4,094 4,298 6,401 4,519 0.1% 4,519 0.1%
Information Technology (IT) 12,291 12,980 16,439 13,857 -2.4% 13,857 -2.4%
Telecommunications (TC) 13,263 14,381 19,549 14,163 0.3% 14,163 0.3%
Office Equipment & Consumables (OE) 3,019 2,874 3,220 3,135 -7.1% 3,135 -7.1%
GfK TEMAX® Western Europe 46,983 49,783 64,954 50,523 -2.2% 50,523 -2.2%
General