state of the ce industry
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STATE OF THE CE INDUSTRY. …and the potential impact on product returns. Steve Koenig Director, Industry Analysis Consumer Electronics Association @ KoenigSteve [email protected]. With Special Focus On:. Today’s Trends …. Tomorrow’s Opportunities. Macro overview Channel trends - PowerPoint PPT PresentationTRANSCRIPT
STATE OF THE CE INDUSTRY
Steve KoenigDirector, Industry AnalysisConsumer Electronics Association@[email protected]
…and the potential impact on product returns.
With SpecialFocus On:
Today’s Trends …
• Macro overview• Channel trends• Shopping Behavior• Purchase Drivers
Tomorrow’s Opportunities
What does all this mean for product returns?
Industry Megatrends
• Mobility and connectivity
• Consumer Empowerment
• Engagement
DEVICES
CONSUMERS
RETAILING
Mobile Connected Devices
M-commerceShowroomingSocial
More $ from fewer customersRelationships, communityPartnerships
2009 2010 2011 2012 2013e 2014p
$169,793 $180,983$195,008 $202,311 $202,629 $211,730
Total U.S. CE Shipment Revenue(in millions)
Source: CEA, U.S. CE Sales and Forecasts, July 2013
6.6% 7.7% 3.7% 0.2% 4.5%%
Growth:
CE Big Five
Smartphones Tablets Mobile PCs LCD TVs Digital Cameras
37.9
27.3
17.2 16.8
4.6
Source: CEA
58% 41% 65% 62% 73%% HHOwning
2013 Shipment Dollars (Billions)
CE Devices Likely to Never Be Purchased
Cell phone that is not a smartphone
Dedicated e-reader
Portable game device
Camcorder
Portable digital audio/MP3 player
GPS or navigation device
Video game console
Desktop computer
Digital camera
Tablet computer
DVD or Blu-ray Disc player
Laptop/netbook computer
Smartphone
HDTV 5%
7%
9%
18%
19%
26%
34%
40%
48%
51%
59%
60%
61%
79%At immediate
risk of becoming obsolete
Most at risk in the near future
Source: CEA, 15th Annual CE Ownership Study, April 2013
Trending in Technology
• Ultra HDTV
• Wireless Speakers • Soundbars• Headphones
• Xbox ONE, PS4
• Wearable Tech
VIDEO
AUDIO
GAMING
MOBILE
CE returns watchlist?
CES Tech Zone
% of CE Dollar Sales by Macro Channel
64.2
31.5
4.3
Physical StoreOnlineOther Channel
4Q End Sept 2013
Source: TraQline US Consumer Survey – Total CE
Internet Retailers Continue to Gain $ Share
11-12 Change %
12-13 Change %
% 4Q End Sept 2013
Discount Store 0.4 0.1 23.5
Elec/majap Store -0.2 -1.0 30.1
Direct / Internet 1.0 1.7 15.9
Office Supply -0.3 -0.2 3.4
Computer Spec -1.0 -0.7 16.8
Other 0.1 0.0 10.3
$ Market Share
Source: TraQline US Consumer Survey – Total CE
CE Dollar Market Share: 4Q End Sept 2013
All Others
31%
Best Buy26%
Walmart12%
Apple9%
Dell5%
Amazon.Com8%
Costco4%
Target3% Sam’s Club
2%
Source: TraQline Dollars R4Q Q2’13
Retailing Trends
Big Box RetailCompeting on PriceCustomer=Commodity
Store within a StoreBrand StoresSpecialty StoresPop-Up Stores
SUNRISE SUNSET
CE Superstores Redefined
• Smaller Footprints• Store within a Store• Solution Selling
• Relationships• Destination, Demos• Service
Impact to Returns
• Brand and specialty stores potentially better at solution selling.
• Retailers emphasize service; offer set-up
• Online: more purchases ‘in absentia’?• Value mix moving up (higher
expectations?)
GOOD
BAD
Spending on Consumer Electronics
$5,000 +
$2,001-$5,000
$1,001-$2,000
$1,000 or less
Nothing/Don't know
4%
10%
13%
53%
20%
7%
16%
13%
49%
16%
Average Annual Household Spend:
2012: $961 2013: $1,312
Annual Household Spend
Source: CEA CE Ownership and Market Potential Study (2013)Base: U.S. adults (n=2,000)
2012
2013
Late Adopters
Mid Adopters
Early Adopters
55+
45-54
35-44
25-34
18-24
Female
Male
All Adults
$402
$784
$914
$351
$613
$765
$722
$513
$410
$693
$552
$468
$815
$1,397
$493
$686
$931
$1,171
$706
$544
$961
$74620132012
Average Annual Consumer Spend
Where Consumers Browse and Research CE
Mobile App
Optimized Mobile Site
Standard Website
Physical Store
18%
23%
67%
72%
Source: CEA Multi-Channel Alignment in CE Retail (2013)Base: Online U.S. Adults (n=1,027)Question 4: “How often do you use each of the following retail channels when browsing for and researching electronics products?”
Omnichannel Marketing
50% of consumers will use a mobile device to help them shop for CE.
15%2013 Holiday Mobile Channel Sales
Of Online Holiday Sales
8.4 Billion Dollars
CEA Holiday Research:
Pre-Purchase Research Activities
Visit Brand's Social Networking Page
Look for Product in Magazines
Look for Product in Newspaper Ads
Find Someone Who Owns Product
Ask Someone You Know About Product
Go To Store Which Sells the Product
Compare Retailer Prices
Look Up Information About Product on Internet
6%
6%
11%
11%
21%
33%
45%
48%
Source: CEA, Millennials: The New Face of Retail (2013)Base: Online U.S. U.S. Consumers ages 13+Q: Which of the following activities, if any, did you do before purchasing the electronics product you purchased most recently?
General In-Store Pre-Purchase Activities
Search for more information on product using mobile device
Compare prices for product using mobile device
Read customer ratings / reviews for product using a mobile device
Get recommendation from salesperson brand/model to buy
Get demonstration of product
Look at the product packaging
Play with or use the product
Talk to salesperson about product
See or touch the product
10%
15%
18%
25%
29%
32%
33%
47%
51%
Source: CEA, Millennials: The New Face of Retail (2013)Base: Online U.S. U.S. Consumers ages 13+Q: Which of the following activities do you usually do at a BRICK AND MORTAR STORE before purchasing an electronics product?
Mobile Device Used for Shopping at Physical Store
15%2% 7% 13% 26% 37%
Source: CEA Multi-Channel Alignment in CE Retail (2013)Base: Online U.S. Adults (n=1,027)Question 20, “How often do you use a mobile device, such as a smartphone or tablet, when shopping for electronics products in a retailer’s physical store?”
Every time (100%)
Usually (75-99%)
Often (50-74%)
Sometimes (25-49%)
Rarely (1-24%)
Never (0%)
22%
Impact on Returns
• More than 1-800 number and web-page.• Consumers help themselves
– Set-up, troubleshooting, repair
• Compulsive Buying?• Gluttony of online purchasing
GOOD
BAD
Site-to-Store Shipping is growing
Walmart Best Buy Sears Staples Apple Target Costco0
5
10
15
20
25
30
35
40
45
50
2012 Q2 2013 Q2Source: TraQline Units R4Q Q2’13
-5%4%
% Online Customers who choose “ship to store”
7% 7%4%
5%
-10%
CE Product Purchase Drivers
Friends have it
Family members have it
Salesperson recommendations
Environmental friendliness
Family/friend/coworker recommendations
Brand
Style or design
Previous experience with brand
Product reviews
Warranty
Ease of use
Product features
Quality
Price
27%
30%
33%
38%
53%
67%
68%
72%
74%
76%
84%
86%
87%
88%
Source: CEA, Millennials: The New Face of Retail (2013)Base: Online U.S. Consumers ages 13+Q: When you are deciding which electronics products to buy, how important are each of the following in your decision process?
Experience & Assortment Increasingly Important in Store Selection
4Q End Jun 2009
4Q End Jun 2010
4Q End Jun 2011
4Q End Jun 2012
4Q End Jun 2013
20
20.5
21
21.5
22
22.5
23
23.5
24
Experience and Selection
Previous experience with store Good selection of products
4Q End Jun 2009
4Q End Jun 2010
4Q End Jun 2011
4Q End Jun 2012
4Q End Jun 2013
60
61
62
63
64
65
66
67
68
69Competitive price
Source: TraQline Units R4Q Q2’13
%%
Impact to Returns
• More to the buy than just price. • Trusted brands• Shoppers seeking experience and
know-how.
• Bargain hunters will persist• Lower consumer tolerance for
product/set-up issues?
GOOD
BAD
Smartphones
• Trends for 2014– Curved, semi-flexible screens
• Samsung and LG• Will trickle down to other OEMs later
– Pushing the limits of pixel density (PPI)– Much larger batteries– 4K video capture– More size experimentation
Smartphones• Samsung Galaxy Round
– Curved 1080p AMOLED display– MSRP ~$1300 (import)– US release early 2014– Same specs as Note 3
• LG G Flex– Curved, flexible 6-inch 720p
screen– MSRP ~$1000 (import)– Screen can flex up to 88 lbs
force
Smartphones
• Huawei Ascend Mate II– Follow-up to 2013 CES debut– 2GB RAM, octa-core
processor– Likely 6-inch 720p screen
• Sony Xperia Z2– Follow up to 2013 CES launch– Sony’s 2014 flagship– 20MP camera, 4K video
capture– Water and dust resistant
Tablets
• Trends for 2014– Size experimentation above 10.1 inches– Dual operating systems– X86 based designs might get some attention
Tablets
• Panasonic ToughPad 4K– 20-inch Windows 8.1 tablet– 2840x2560 IPS screen– Designed for “creatives” with
stylus and Intel Core processor
• Huawei PhoPad– Rumored CES release– Competitor to Asus PadFone– Smartphone docks into tablet– Asus TODAY announced
PadFone v2 coming to US in 2014…
• Samsung Galaxy Note 12.2– Rumored to be in production– Possible CES debut?
TVs: UHD 4K and Beyond
• Trends for 2014– Ultra HD everything, everywhere– Curved (and possibly flexible) displays– More OLED promises?– What about Ultra HD content
• 2013 Netflix announcement
TVs: UHD 4K and Beyond
• LG Curved OLED TV– 77” curved OLED– 3D and SmartTV capable
• Flexible TVs– Korean sources report that
Samsung and LG may demo flexible TVs
– Manipulate viewing angles for best possible picture
– What about 3D?
• Samsung 111” Ultra HD– Claim: World’s largest
240 Hz Ultra HD TV• Dish Network Virtual Joey
app– Allows Dish customers access
to content on other devices (consoles, SmartTVs)
– Allows access without STB
Health & Fitness
• Trends for 2014– Product mix is all over the map– Lots of traditional products with smartphone
integration– CE bridges gap between electronics and other
industries.
Health & Fitness
• Sleep Number x12 Bed– Allows for voice-
controlled adjustments– Sleep tracking tech
integrated with sleep patterns and quality data
• Reebok Checklight– Checklight detects
concussive impacts to athletes
– Concussions in youth sports are a major concern
3D Printing• Trends for 2014
– A media darling, 3D printing is maturing– Format wars?
• Extrusion vs. stereolithography
– Price vs. output quality
3D Printing• WobbleWorks 3Doodler
– World’s first 3D printing pen– Heats and cools plastic as it
passes through the pen– $100, available Feb.
• Pirate 3D “Buccaneer”– Began as a Kickstarter project– High-res 3D printer for
consumer use– Has its own “app store” to
download design files– $500, available April
Wearables
• Trends for 2014– Wearables will be everywhere
• Smartwatches will be the main focus
– Most wearables will be focused on the sensors embedded in them
– Innovation for wearables will be in software and how much like a “regular accessory” they look
• Geek chic is not going to work for everyone
Wearables
• Neptune Pine Smartwatch– Takes a SIM card, requires no
additional phone– Runs full Android OS– 2.4” screen, dual 5MP cameras– Started in 2013 as a Kickstarter
project
• Qualcomm Toq– Works with Android
smartphones– Uses an always-on Mirasol e-
paper display– Charges wirelessly and lasts
for several days between charges
Parting Thoughts
• Mobile technology: the epicenter for returns?• The channel continues to innovate.
– Engagement: SwS, apps, social, service, stores– Omnichannel Marketing
• Price still important, but other factors rising.– Changing the narrative
• CES 2014: Devices, Connectivity, Context
Steve KoenigDirector, Industry AnalysisConsumer Electronics Association@KoenigSteve [email protected]