This Year’s Hottest Tech is Here... But Do Consumer 'Like' It?
We’re living in the midst of a tech revolution that’s dominating headlines and the marketplace. Internet-enabled devices are available at lower price points than in years past, contributing to exponential IoT adoption across U.S. households.
Every year, the Consumer Technology Association’s (CTA) research team tracks which products and product categories are the most prevalent, and which ones are on the rise. The new 18th Annual Consumer Technology Ownership and Market Potential Study (April 2016) verifies that smartphones are now a household staple, with ownership trends beginning to mirror those of televisions, the most pervasive tech product in our homes. Ninety-six percent of U.S. households own TVs, and there are now almost as many TVs owned (320 million installed base) as people in the U.S. population (321 million).
Outside of TVs, this year’s top-owned tech devices in order of most to least are DVD/Blu-ray players, smartphones, laptops/notebooks and headphones. DVD/Blu-ray players continue a five-year downward trend, but they’re still owned by 77 percent of households. Smartphones on the other hand continue to rise in ownership (up two percentage points from 2015) – on average, Americans now own 2.4 smartphones per household. Laptop and notebook ownership is on par with last year, while headphones move to the number-five spot, replacing digital cameras.
At the same time, emerging tech purchases are on the rise. Household ownership of wireless audio, wearables and connected devices saw the largest household ownership gains from 2015 to 2016. But what’s driving consumers to take the leap and try out these new, connected devices?
WEARABLE FITNESS ACTIVITY TRACKERS
These days, you may be more likely to hear ‘I am getting my steps in’ than ‘I am going for a run.’ So it should come as no surprise that wearable activity trackers are among the fastest growing tech categories overall, now owned by 20 percent of U.S. households – almost double last year’s number. And another 15 percent of households plan to purchase fitness wearables in the next year.
Connected activity trackers are now available in a wide array of styles and price points, making them more accessible for households across the country. At the same time, the variety in products and how they integrate with a consumer’s smartphone and app preferences requires consumers to invest a bit of forethought ahead of purchase.
In fact, health and fitness is the only product category in which online research is more prevalent than in-store research, according to CTA’s The Virtuous Purchase Cycle white paper (April 2016), with 63 percent of fitness wearables owners conducting research online before making their purchase.
Bottom line: consumers are interested in quantifying their daily activity, and increasingly rely on online product reviews and social media to navigate the growing marketplace for wearable fitness activity trackers.
Purchase intent is greater for portable audio tech, as compared to standalone and hardwired devices, with wireless speakers and headphones also topping the list for emerging tech. Household ownership for portable wireless speakers hit 35 percent this year – up 10 percentage points from 2015 – and wireless headphones ownership is slightly higher at 37 percent household ownership – up nine percentage points from last year.
At the same time, a greater number of consumers indicate they “never intend to buy” standalone or hardwired audio devices such as a CD player, subwoofer and speaker dock that requires a plug-in connection. This trend shows more consumers are interested in purchasing audio products that can be used universally for their on-the-go lifestyles.
According to the Consumer Technology Ownership and Market Potential Study, headphones – either wired or wireless – have the highest percentage of repeat purchases, with 90 percent of U.S. adults indicating they bought a new pair again this year. This can be interpreted as consumers buying additional headphones due to a positive experience, or that they are buying replacement headphones due to a negative experience.
The Virtuous Purchase Cycle white paper highlights the importance of consumers’ past experiences with a brand, especially in the case of an upgrade or replacement of broken tech in the wireless and smartphone categories. Positive experience plays an important role in repeat purchase of the same brand or upgrade within the same brand. Similarly, a poor consumer experience can create a strong deterrent to a repeat purchase.
The bottom line is this: Portable audio products are growing in demand. To keep up with the supply, brands should pay attention to customer reviews and comments on social media to better ensure that consumers are repeat buyers – not just one-time purchasers.
Another emerging tech category is Internet-connect televisions. The market for smart TVs experienced its largest growth between 2014 and 2015, and continues to expand at a steady rate. This year, smart TVs in U.S. households jumped seven percentage points to reach to 50 percent ownership. Furthermore, wholesale revenue is expected to reach $15.8 billion in 2016.
However, purchase intent for TVs is experiencing a slight decline. A diffusion of video consumption across multiple screens may be behind the rise in households that never intend to buy TVs – up four percentage points to 22 percent in 2016.
Technology is becoming more and more integrated into everyday life, making user experience and performance expectations of prime importance. Therefore, consumers are more often communicating and sharing information about their recent tech product purchases and experiences. Social media is one outlet that can trigger interest or engage prospective buyers in seeking information from friends, family and colleagues, making them the first line of influencers.
Bottom line: For smart TVs to fill the gap of declining non-Internet connected television sales, brands should continue to educate consumers on the product benefits by boosting their social media presence and staying aware of all consumer reviews.
THE BIG PICTURE (ON THE SMALL SCREEN)
There are two key takeaways from the recent CTA research: the popularity of IoT continues to grow, and social media is more important than ever for both consumers and brands. In other words, via the Internet, we are increasingly connecting to our devices and to each other.
Overall, the growth of IoT is expected to help lead the U.S. consumer tech industry to a record-setting $287 billion in retail revenues in 2016, according CTA’s U.S. Consumer Technology Sales and Forecasts. Wearables, portable audio and smart TVs are three main Internet-connected product categories growing in popularity among U.S. households.
Additionally, the tendency to communicate and share product reviews is reflected most prominently across the audio, wireless and health and fitness product categories. After researching and deciding on a product, purchasers of these emerging tech products are quick to share their likes and dislikes with friends, family and the social media universe. Thus, it is in a brand’s best interest to not just have a social media presence, but also monitor the social conversations on product reviews.
The Consumer Technology Ownership and Market Potential Study ascertains ownership and purchase intent of consumer technology products among U.S. households across video, audio, automotive, computer, gaming, communications and emerging tech categories. The Virtuous Purchase Cycle white paper focuses on previous research conducted across four technology categories – audio, health and fitness, wireless and accessories – and also draws upon CTA’s post-purchase behavior research to capture the tech experience and overall purchase lifecycle. They are designed and formulated by CTA Market Research, the most comprehensive source of sales data, forecasts, consumer research and historical trends for the consumer technology industry.
The complete study is available for free for CTA member companies at members.CTA.tech. Non-members may purchase the study at the