Increasing understanding of technology is raising consumer expectations
- Understanding of and openness to technology among consumers have increased worldwide with the pandemic, accompanied by new and heightened expectations
- Changes to preferences courtesy of the cocooning trend and working from home are offering manufacturers and brands opportunities to set themselves apart from the competition
- Personalized digital functions are still only all too rarely realizing their full potential
During the coronavirus pandemic, consumers have significantly improved their understanding of technology. Not only are smart phones and video conferencing systems being used with increasing confidence, but, in the age of home working and lockdowns, consumer attitudes to data use have also shifted along the spectrum from skepticism toward openness. 74 percent of consumers in Germany are prepared to allow more data to be stored, as long as they can see a concrete benefit in doing so. For this reason, it’s important for manufacturers to cultivate a precise understanding of customer wishes and – where possible – to generate the appropriate digital value added. These were the findings of a global consumer survey carried out in August 2021 by strategy consultants Oliver Wyman and gfu Consumer & Home Electronics GmbH, organizer of the IFA in Berlin.
My toaster, my fridge, my tablet: In the age of coronavirus, people living in Germany have become more emotionally attached to their household appliances and consumer electronics. By their own account, 60 percent of consumers in Germany appreciate their electronic devices more as essential helpmates in their daily lives than they did pre-pandemic. Only 17 percent disagreed with this statement in a study recently conducted by strategy consultants Oliver Wyman and gfu. It’s the makers of higher-end devices who are particularly benefiting. As Wyman partner Dr. Martin Schulte comments: “During the pandemic, consumers have made a quantum leap in their understanding of and openness to technology.” The consumer goods expert attributes this essentially to the changes in lifestyle wrought by the pandemic: Even less tech-savvy consumers have suddenly had to get to grips with video telephony when working at home, QR codes to register in restaurants and digital vaccination certificates on their smart phones. “The fact that coronavirus-related applications has forced this on people will continue to have positive learning and habituation effects after the pandemic ends, which will prepare the ground for further meaningful offers,” Dr. Martin Schulte continues.
This new-found enthusiasm for technology is also leading to a change in expectations. “People are getting more adept but also continue to be very sensitive to things like the use of their data,” says Dr. Sara Warneke, gfu CEO, who goes on to add: “Anyone who, as a provider, can offer a decisive application advantage in respect of data collection can overcome consumer skepticism and profit commercially into the bargain.” Be that as it may, consumers remain cautious concerning the sharing of personal data. At the same time, 60 percent of the respondents bemoan the fact that privacy rules often make digital services more complicated. However, willingness to allow data storage has increased overall, and 74 percent now say that they will permit the storage of their data more frequently than before as long as they can see a specific advantage in doing so. Germany lies about mid-table – in China and India, however, there is almost universal consent, with 90 and 97 percent of the respondents respectively having fewer concerns than before. By way of contrast, skepticism has increased a little in the US, at 69 percent, and in France, where the figure is 66 percent. “In Germany too, consumers are basically willing to share their data. Especially during the pandemic, they have had an experience of the advantages that the right digital services can offer. We see this as a call on the policymakers and manufacturers to guarantee transparency, simplicity, and specific value added,” gfu CEO Warneke says.
Not every digital application has met with a favorable consumer response
There is a cloud on the horizon: Providers often don’t have a specific idea of what they actually want to do with the data they’ve collected. “Some device manufacturers create apps and collect data without taking full advantage of their possible operative uses – there’s still room for improvement here,” says Schulte. “If a robot vacuum cleaner collects information about its user’s home and uploads it to the cloud without offering a tangible performance advantage, the value added for consumers will be limited. When combined with product support, tips for device use and special offers, the value added is much greater, and customers will be much more willing to share their data.” Just looking at music or video streaming services makes it crystal clear just how attractive personalized digital functions can be, Schulte adds.
According to the study, notwithstanding all its dire effects, the coronavirus pandemic has resulted in progress in the development of media skills. For instance, 60 percent of the respondents in Germany feel “significantly more skilled” in the use of their smart phones than was the case before the pandemic. As many as 63 percent agreed with this statement in respect of video conferencing systems. And the readiness to enter into legally binding contracts online has also grown enormously: 63 percent agreed that they now feel more comfortable with this than they did in pre-Covid times. “When viewed in the light of discussions about consumer rights with regard to these kinds of contracts, this is an astonishingly high rate of consent,” says Oliver Wyman expert Schulte. From a global perspective, 80 percent consider themselves better versed in smart phone use – when you add the figures together. 69 percent are now using Zoom, Microsoft Teams, Slack, Skype, and the rest more as a matter of course than before. And 68 percent are more open when it comes to entering into contracts online.
Cocooning at home is creating new needs for technology
As a result of working from home, lockdowns, and curfews, the pandemic has already boosted demand over a broad front. According to figures released by gfu, 2020 saw a year-on-year increase of 11.6 percent in sales of home electronics – consumer electronics and household appliances. A growth trend that continued in the first six months of 2021. A lot of purchases were made of items that would make living and working at home more enjoyable. “We’ve already seen a big wave of investment in replacement articles,” says gfu CEO Dr. Sara Warneke. And yet, the study also reveals further potential with a view to the trend toward what has become known as cocooning – withdrawing behind one’s own four walls in as pleasant a manner as possible – which is set to continue even once the pandemic has come to an end. “Home has taken center stage in people’s lives, and home working will ensure, also in the long term, that we will spend more time there,” Warneke says. Design is consequently becoming a more important purchase criterion. 62 percent of the respondents said that they were now paying more attention to the form and appearance of technical devices than was the case pre-pandemic. “Consumers have developed a greater need to surround themselves with lovely and pleasant things,” Warneke comments. “A trend to which the manufacturers are palpably responding.”
Consumers are looking to the future
The study has also shown that a certain kind of expectation with regard to companies has developed in respect of societal issues. “People are increasingly expecting companies to take their social responsibility seriously. Three out of four consumers now consider whether a company is taking an active stance on environmental protection and social justice in their purchasing decisions. Manufacturers ignore this expectation at their peril,” says Schulte from Oliver Wyman. In Germany, these points carry weight for 78 percent of consumers. Only in India and China are the scores higher, at 89 and 91 percent respectively. “These social questions were starting to emerge even before coronavirus. And there’s no doubt that they’ve become more important during the pandemic,” says Dr. Sara Warneke from gfu.
About the study
For the study, Oliver Wyman and gfu surveyed over 2,500 consumers in Germany and five other countries (China, France, India, Russia, and the US). All the respondents are the decision-makers in their households when it comes to buying electronic devices. The aim of the August 2021 survey was to find out how consumers’ understanding of technology and preferences have changed as a result of the pandemic’s impact on lifestyles and to what extent manufacturers in the home electronics industry are managing to meet their needs.
About Oliver Wyman
Oliver Wyman is one of the foremost international strategy consultancies, with over 5,000 employees at 60 offices in 29 countries. We combine exceptional sector expertise with a high level of methodological skill in digitization, strategy development, risk management, operations, and transformation. We generate value added for our customers that exceeds their investment by many multiples. Oliver Wyman is a Marsh McLennan company (NYSE: MMC). Our financial strength is the basis for stability, growth, and innovative power. You can find further information at https://www.oliverwyman.com/index.html. Follow Oliver Wyman on LinkedIn, Twitter, Facebook, and Instagram.
gfu, originally founded as a company whose purpose was to promote consumer electronics, regularly adapts the main focus of its activities to the constantly changing markets. It now operates as a sectoral organization under the name of gfu Consumer & Home Electronics GmbH. gfu’s shareholders are leading brands in the consumer electronics and household appliances industries. It organizes the world’s leading trade show in the sector, the IFA in Berlin, thereby offering a significant platform to bring together players from industry and trade, media and consumers, and start-ups and visionaries, along with policymakers and associations. gfu provides regular information on trends and developments in the sectors and beyond. To this end it conducts studies and market research and communicates the results. It also organizes panel discussions and symposia.