An unstable economic and geopolitical situation, coupled with recession fears, is leading to a decline in purchasing willingness across sectors, with stabilization at best.. For the consumer tech and durables sector this means that in the first six months of 2024, sales of 395 billion US Dollars were achieved – a decline of 0.6 percent. Manufacturers in this sector navigate market uncertainty, budget cuts, and pressure from retailers, who must carefully balance stocking levels to avoid both overstocking and understocking in a time of fluctuating demand.
Top priority: understanding and fulfilling consumer needs
In order to boost consumption, the top priority remains to meet increased consumer needs and demands with product and functional innovations. The graphic highlights what consumers define as innovation and which aspect matter to them the most. Among other things, consumers today seek products that simplify complex tasks, enhance well-being, and integrate seamlessly into their lifestyle. This is evident from the introduction of over 110,000 new products across 8 categories in 2023 alone, including mobile devices, wearables, TV, and home appliances. (Washing machines, Air Conditioners, Vacuum Cleaner etc.).
Successful product innovation revolves around convenience, performance, health, hygiene, user-centered design, and sustainability. For instance, appliances with advanced functionalities, such as washing machines with steam functions and vacuum cleaners with wet and dry capabilities, are gaining traction due to their enhanced performance and convenience. Consumers also increasingly value products that offer personalization and eco-friendliness. Features such as energy efficiency and sustainable materials are no longer just desirable but expected. The shift towards products that address specific consumer needs — whether it’s through improved performance, durability, or affordability — highlights the industry’s commitment to innovation that delivers real value.
Responding to changing purchasing behaviour
Alongside product innovation, consumer touchpoints are also evolving. With 36 percent of global consumer tech & durable sales now occurring online, digital channels have reached new thresholds post pandemic. Many consumers have overcome their previous apprehensions to purchase online. The direct-to-consumer (DTC) model is also emerging as an interesting touchpoint, enabling brands to offer tailored experiences and strengthen consumer relationships.
Platforms like TikTok are also reshaping how consumers discover and engage with products. In Western Europe alone, the projected spend via the TikTok Shop is expected to reach €3.7 billion based on the number of users on the platform and the average order value. illustrating the potential of these platforms as effective consumer touchpoints. This shift underscores the need for brands to create relevant, engaging content that resonates with digitally savvy audiences and also having share of mind to influence the share of wallet. Retailers have embraced this change by enhancing their digital presence and leveraging retail media. Personalized support, both pre- and post-purchase, is becoming increasingly important as consumers seek more interactive and informed shopping experiences. The convergence of digital and physical touchpoints allows for a more holistic approach to consumer engagement, providing multiple avenues for consumers to interact with brands.
Innovation and Touchpoints Drive Consumer Engagement
In conclusion, product innovation and evolving consumer touchpoints are essential in driving consumer engagement and loyalty in the consumer tech & durables sector. Brands must align innovation efforts with modern consumer expectations and behaviors. By focusing on convenience, personalization, and sustainability, and by leveraging digital channels effectively, they can create compelling value propositions that resonate in an increasingly competitive market landscape.
Source: https://nielseniq.com/global/en/solutions/consumer-life/
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