Back at the beginning of the year, everyone knew 2022 was going to be different—and a bit of a challenge to forecast. There were high expectations that COVID would finally become manageable and no longer define how—and where—Americans spent their time and money. And when it came to consumer technology trends, CTA initially projected “over $505 billion in retail sales revenue for the first time ever…. Strong demand for smartphones, automotive tech, health devices and streaming services will help propel much of the projected revenue.”
Then, seemingly out of nowhere, food and fuel prices blew up. The rising, historic inflation rates are affecting everything—including how consumers spend their money.
The NPD Group’s May 2022 press release noted some disturbing shopping facts due to inflation:
“More than 8 in 10 U.S consumers are planning to make changes to mitigate their product spending in the next three to six months. According to The NPD Group, while general merchandise retail sales revenue is down just 1% through mid-May compared to the same period last year and 19% above pre-pandemic levels in 2019, consumers have already begun to make fewer purchases than a year ago. These shifts in shopping behavior will have broader retail consequences.”
They also found consumers will:
So, consumers are buying less and paying more per purchase.
In April 2022, The NPD Group found that higher-income consumers will likely continue to buy while others pull back.
On the flip side, major retailers like Target, Walmart, and Best Buy have too much inventory in stock of certain products—including big ticket items. So, unlike in 2021 when it was hard to find discounts, these stores in 2022 are offering major discounts to help clear the overstock. Their promotions should help draw in shoppers of all income levels, bumping up the opportunity for add-on sales as well.
So, given the economic challenges that have developed in Q1 and Q2, what’s trending now?
In May, CTA released their 24th Annual U.S. Consumer Technology Ownership and Market Potential Study. The foreword states:
“51% of U.S. consumer households (HHs) said they were less likely to purchase technology due to inflation, and 68% agreed that tech products are more expensive this year. Across all 83 products tracked, there was an average one-point drop in the percentage of households planning to purchase them in the next year when compared to 2021. Looking at it another way, purchase intent rose for just 16 products, remained the same for 20 and declined for 47 products.“
“This year’s study reflects a nation in flux, shopping for tech to prepare them for the new normal, albeit with a budget-mindful approach. While purchase intent may be falling slightly compared to 2021, interest remains high for many products relative to pre-pandemic years, showing that consumer technology will remain relevant and resilient in the year to come.”
The chart below tells you where to expect the most purchases. HH means households.
Beyond the various Top 10s, CTA noted intent-to-purchase percentages for other consumer technology areas:
Health & Wellness
Wearables
Automotive
Lifestyle
Consumers are still buying. Innovations and new technologies are still emerging. But as everything costs more, many consumers are pulling back and looking for value on those things they do buy.
Thanks to CTA’s Top 10 lists of consumer technology trends, you now have an edge. You can see what is still on consumers’ shopping lists. You can better direct your dollars, energies, and efforts.
Since consumers are spending more on purchases and buying less overall, here’s some relevant advice for marketers and retailers from The NPD Group:
“It’s crucial to find ways to tell consumers now is the time to buy. Increasingly, retailers must entice customers to buy, rather than simply waiting for them to do so. Now that consumers are back in stores again, there’s a lot more opportunity to entice them to spend on impulse again.”
In other words, think of all the specials Target and Best Buy have been running. It’s either that or sit on overstock for a while longer—perhaps even a year.
The NPD Group also suggests:
“An appealing shopping environment, displays that make the product pop, and persuasive promotions are necessary to get more items into the basket when consumers do shop.”
You can’t control those outside inflationary forces. But you can try to adapt. Figure out the best way to navigate this crazy rollercoaster of an economy. Take this opportunity to make sure what you sell—and how you sell—is presented as appealingly and as cost-efficiently as possible.
To find out how we at Petra Industries can help your business grow, be sure to visit petra.com. Scroll down to the PETRA FOR CUSTOMERS and PETRA FOR MANUFACTURERS sections and dive right in.