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CE Retailers Ahead of the Online Curve Before COVID-19

Retail Distribution Market Analysis and Commentary

27 Apr 2020 - The global spread of COVID-19 presents new challenges to consumer electronics (CE) vendors and retailers alike. However, in an industry already disrupted by changing consumer habits and a polarisation of online and high street, CE retail appears to be faring well when compared with other retail segments. A new research report from Futuresource Consulting explores the retail journey of consumers when they buy headphones, TVs and wireless speakers, and points to a significant shift to online that began prior to the COVID-19 outbreak.

CE More Prepared Than Most

“Online versus instore, along with the omnichannel challenge, have been popular topics within CE retail for some time,” says Mike Fisher, Associate Director at Futuresource Consulting. “There’s been a real sense of innovation, with concerted strategies that seek to integrate online and instore offerings. With the rising threat of pure online players like Amazon, retailers have had to take an adapt-or-die stance. And that groundwork is now paying off as retailers everywhere are coming to terms with a dramatically altered commercial landscape.”

The research, carried out in February and March of this year in China, France, Germany, Spain, the UK and USA, surveyed 36,000 people in total, using nationally-representative samples. It reveals that online* purchases were already dominating the audio sector, with 67% of headphone purchases and 68% of wireless speaker purchases being made online. What’s more, retailer omnichannel strategies were playing their part in leveraging sales. 23% of customers who purchased headphones online opted for click and collect, rising to 27% for online sales of wireless speakers. But these are eclipsed by the omnichannel nature of TV purchases, with more than one-in-three TVs purchased online being collected in store or from another click and collect location.

Pureplay, Online and Bricks and Mortar Fighting it Out

“We’re seeing fluctuating channel trends and buyer behaviours based on geography, but there are universal shifts taking place,” says Fisher. “For headphones, Amazon is the leading retailer in four of the six countries surveyed. The internet giant is also in a strong position for wireless speaker sales, making the top three in all countries surveyed except China. However, when it comes to TVs, the bricks and mortar CE retailers are still leading the sales rankings. Most countries show an out-and-out leader, but in France it’s a closely-fought battle between Boulanger and Darty, with CDiscount fighting off a number of rivals to take third position.”

IT infrastructure Issues Need to be Addressed

While the future looks positive for many, some retailers are over-exposed to failure due to problems with legacy systems and lack of joined up infrastructure. Although hybrid cloud and SD-WAN solutions are now prevalent within many industries, the use of these technologies is not as widespread as it could be within CE. This is a weak point that needs to be addressed by some to ensure continued profitability.

The Value of Amazon Reviews

“We’re seeing Amazon user reviews playing a large role in the consumer decision making process across all product types,” says Fisher. “Whether or not consumers ultimately buy from Amazon, they are paying attention to the reviews. In the UK, in particular, people are more likely to use end user product reviews and retailer websites to influence their decision making. Word of mouth was also regularly cited as a key information source. There is no doubt that we’re all at the centre of a major shift in buyer behaviour on a global scale. For the CE industry, it looks like the shift was already beginning, which will help to diminish some of the difficulties ahead.”

*’Click and collect’ included in online sales.

Futuresource Consulting’s retail distribution consumer research report provides details of the first wave of research from Futuresource’s retail distribution consumer survey, providing insight into the retail journey of consumers buying headphones, TVs and wireless speakers. This wave of research covers China, France, Germany, Spain, the UK and USA, with a sample of 6,000 respondents in each country surveyed in February and March 2020. For further information on this report, please contact Mike Fisher via mike.fisher@futuresource-hq.com

About Us

Here at Futuresource Consulting we deliver specialist research and consulting services, providing market forecasts and intelligence reports. Since the 1980s we have supported a range of industry sectors, which has grown to include: CE, Broadcast, Entertainment Content, EdTech and many more.