Despite being more important to people than sex…
Smart phones, as well as other popular consumer electronics, are industry segments experiencing maturation that is likely to hamper growth in the second half of the decade and beyond.
Tomorrow can’t come fast enough for the consumer electronics industry…
After nearly a decade of turbocharged growth in a variety of segments the consumer electronics industry appears to be slowing despite demand for new electronics and technologies such as:
- Virtual reality
- Internet of Things
However, demand for tomorrow’s consumer electronics in the medium term, according to research, is not likely to be great enough to offset stalling growth in traditional segments.
While the industry will continue to battle cannibalization, such as tablets replacing laptop computers, it will also set its sights on higher growth and higher margin opportunities likely such as smart cars, smart homes, and even smart cities that become increasingly connected and personalized.
But how exactly do you survive today’s industry deceleration and live to thrive tomorrow?
Pivot to Profit
While overall consumer electronics industry growth is expected to slow to 1.5% in 2016 from years prior…
Opportunities for accelerated growth exist outside developed countries like the United States.
Emerging markets such as China and India, assuming manufactures can offer electronics at affordable prices, are expected to grow at double-digit rates in the coming years. However, consumer electronics manufactures will also likely confront strong headwinds currently impacting developed markets such as:
The United States is now the second largest market for consumer electronics with a user
base that is forecast to spend more than $55 billion USD in 2016, significantly less than
China which is forecast to spend more than $64 billion USD:
In addition to the industry’s pivot to Asia, merchants who are also focused on ecommerce will position themselves to grow faster than the overall industry. Worldwide, ecommerce sales of consumer electronics are expected to grow at a compound annual rate of 12.5% through 2021, from more than $210 billion USD in 2016 to more than $379 billion USD in 2021:
Retailers of consumer electronics with the foresight to pivot toward Asia and ramp their ecommerce efforts position themselves to grow faster than the overall industry.
However, new growth opportunities must also be identified as the industry’s standard bearers mature and decelerate.
Discovering Hidden Growth: At Home and In the Car
The smartphone is maturing…
How might merchants offset deceleration in one of the industry’s hallmark products?
While immense opportunity still exists in developing markets and emerging middle classes as well as newly minted millionaires in China, consumer electronics makers looking toward the future are increasingly finding opportunity in the home and automobile.
The smart home segment includes:
It’s important to note that a $7 billion dollar industry in 2015 is now forecast to grow
to a more than $32 billion dollar industry by 2021:
In addition to the home, the consumer electronics industry is also forecast to drive future growth by increasingly connecting the automobile. Technological advances are forecast to more than double revenue in the connected car market from more than $10 billion USD in 2017 to more than $21 billion USD by 2021:
The always-on connectivity demanded by tomorrow’s consumer of electronics is also
expected to nudge manufactures to more closely work with one another to create ecosystems that allow consumers to remain seamlessly connected regardless of device or platform choice and without performance sacrifices as they navigate among various electronics in the home, vehicle, and beyond.
Imagining the Future: Seeing Tomorrow’s Technology Today
Tomorrow’s technologies are about to collide…
Significant shifts in consumer preference, behavior, and geographic centers of affluence will influence how those technologies are used for commerce.
What will the consumer electronics industry look like when ultra-personalized customer experiences powered by next generation beacons that recognize individuals collide with artificial intelligence, virtual reality, and next generation wearables to create opportunities for commerce that do not exist today?
Or consider what might be possible in a future where context-aware consumer electronics devices are equipped to anticipate and predict a user’s needs and actually improve a person’s overall health.
Advances in machine learning, natural language processing, and technology that can
detect our emotions as well as interpret personal health data in real time will likely
combine in ways that make it possible for next gen consumer electronics devices to be
context-aware on a much deeper level than they are today or will be in the near future:
Are You Ready For a Future Like This?
The future, at least as we’ve imagined it, will demand more of successful merchants…
Surviving the industry’s current deceleration, pivoting to higher growth opportunities, and positioning yourself to capitalize on a high-tech future poised to create opportunities for commerce that don’t exist today will require brands to seamlessly operate in a variety of worlds (digital and physical), realities (AR and VR), and with a degree of personalization (AI, Advanced Cross Channel Analytics, and Next Generation Segmentation) that create 1:1 customer experiences between brand and consumer.
Are you prepared to capitalize?
WARNING: If you’re focused on the technology of today you’re not likely able to narrowly focus on the technology that will power commerce tomorrow and beyond. If you’re spending your time and treasure on costly and time consuming design and development you’re not investing in your future:
Ready to focus on the future rather than technology?
The trajectories, trends, and technologies outlined here are just a snippet of what you’ll need to obtain a deeper understanding of the state of your industry, the trends impacting its direction, and the technologies that will influence how you position, market, and sell tomorrow and beyond:
It’s why we’ve created an Industry Report just for merchants in the consumer electronics space.
The industry snapshots, shifts in consumer behavior, and emerging technologies briefly illustrated in the report have been included solely to provide you with actionable insight you can use to make data-informed decisions that powerfully differentiate your brand and help you intelligently chart a strategic course for the future.