The home electronics industry expects sales to increase at the end of the year
For many years, December and January have seen the highest sales of products in home electronics and many other industries. Consumers increase their shopping budgets as they receive Christmas bonuses, while retailers open their doors on Sundays, ensuring that city retail districts and shopping centers are packed to the brim towards the year end. But for several years now, the end-of-year shopping period has trended earlier: Black Friday, which originated in the U.S.A. in the 1960s (the first Friday after Thanksgiving at the end of November), as well as the Cyber Week surrounding this date, have seen special discounts and attractive offers act as major incentives for shoppers to buy in Germany and many other European countries.
While brick-and-mortar stores are riding along the cyber-wave, online sales in particular, are booming at this time of year. 88 percent of all consumers surveyed by GfK around the world say the seasonal offers and discounts encourage them to buy. GfK’s market researchers also reported that sales grew by 21 percent over the previous year’s event in the European core markets last year, which had also reported strong sales. In Germany in particular, sales growth last year was even higher, reaching 27 percent. Last year’s Black Friday week sales performance exceeded the traditionally strong pre-Christmas weekends, by far. Up to and including 2017, sales during the Christmas period remained higher than those around Black Friday. This was reversed in 2018, and the Black Friday sales have been outperforming Christmas ever since. Trendsetter of this shift in turnover peaks were the United Kingdom and Spain in 2015 already. In 2017 Black Friday week topped the strongest performing week before Christmas in Italy and finally, last year France followed suit.
“We expect sales to remain high again this year – both around Black Friday and in the weeks leading up to Christmas,” said Kai Hillebrandt, Chairman of the gfu Consumer & Home Electronics GmbH supervisory board, as he summarized the industry’s expectations. “Due to the pandemic, sales will shift from traditional retail to online stores. Retailers who see the internet as an opportunity, rather than as a threat, have already seen great results by combining the best of both worlds. Providing service and advice in line with their core competencies, along with providing fast access to information through the internet, is an unbeatable combination. Whoever understands and treats the internet as a marketing tool, wins.”
The consumer and home electronics industries have already recorded growth of more than six percent in the first three quarters of 2020. The restrictions on travel and social events put in place to mitigate the COVID-19 pandemic have ensured that consumers have invested more in products for their homes. Current infection rates suggest that these restrictions will not be lifted in the short term. Consumers will be even more likely to invest in entertainment, comfort and new experiences for their own homes. Plus, they have the financial means to do so, as most of their other spending options are simply not possible right now.
A gfu survey conducted at the start of the lockdown in spring showed that consumers spent more time on food preparation, cleaning, watching TV and playing video games than in periods where there were no such restrictions. Working from home has now morphed from the exception to be the rule for many working families. Many areas of the home electronics industry are benefiting from the fact that all aspects of life are largely taking place within consumers’ home environments.