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ADI Consumer Electronics Report 2020

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Technology is a conduit for new experiences at any age, income, or level of tech savviness. Each year at the Consumer Electronics Show we get a glimpse into the future, and Adobe is in a unique space to see how consumers are adopting and utilizing this technology in their day to day lives.

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ADI Consumer Electronics Report 2020

  1. 1. CONSUMER ELECTRONICS REPORT Jan 2020 1
  2. 2. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. US CONSUMER ELECTRONICS REPORT | December 2019 METHODOLOGY • Adobe Analytics measures 80% of online transactions at the largest 100 U.S. web retailers** • Report based on aggregate and anonymized consumer data, comprised of over one trillion visits to over 4,500 retailers in the United States. • Product analysis is based on more than six million orders per day on average during November and December. • Companion research based on a survey of 1.4k U.S. consumers (18+ yrs.) in Dec 2019 • For comparison purposes, some retail segments have been broken by their primary product lines **Source: Internet Retailer 2018 2 Adobe Experience Cloud Adobe Analytics Cloud • Consumer Electronics • Apparel & Footwear • Home Furnishings & Décor • Sports • Health & Pharmacy • DIY & Tools • Jewelry & Cosmetics • Automotive • Major Chains • Gifts
  3. 3. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. US CONSUMER ELECTRONICS REPORT | December 2019 Main takeaways Consumers consumer electronics buying habits: • Based on average order value, consumer electronics is by far the most expensive category tracked. • Because consumer electronics also tend to require research and comparison shopping a vast proportion of revenue comes from desktops. • That larger order value dampens both conversion of visits to orders • Consumers in urban areas spend slightly more on consumer electronics than their population suggests • Military personnel buy from retailers that help trick out their living on or near bases. • The evening of Cyber Monday represents the golden hours of shopping for consumer electronics • Prices for computers and televisions dropped 18% from the October benchmark by the holiday weekend • Most common size TV over the holiday weekend was the 50” range, at a price less than half of a month’s rent. 3
  4. 4. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. US CONSUMER ELECTRONICS REPORT | December 2019 Consumer Electronics Generate the Largest Online Orders Consumer Electronic orders are 2.6x larger than the typical ecommerce transaction ($416 vs. $159) The second closest category, Home Furnishing & Décor, is a distant second at a full $100 less per order. The large Apparel & Footwear category helps bring down the overall average. Tech Savvy* consumers prefer to purchase electronics online (48%), while the Unsavvy prefer to purchase in store (47%) 4 $77 $122 $124 $140 $163 $168 $226 $268 $268 $312 $412 Gifts Apparel & Footwear Sports Health & Pharmacy Other DIY & Tools Jewelry & Cosmetics Automotive Major Chains Home Furnshing & Décor Consumer Electronics Average Order Value 2.6x $159 Data from Nov 1 to Dec 6, 2019 and companion research. *Tech Savvy consumers indicated they were interested to strongly interested in tech and electronics Overall Average
  5. 5. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. US CONSUMER ELECTRONICS REPORT | December 2019 Voice Tech is Growing, While VR is Still yet to Hit its Stride 27% of consumers have purchase a voice controllable device in that past year, and 27% of consumers plan to purchase on in the next year Integration between devices is important, almost 40% of consumers advise that it is very important to have past and new devices integrate, 51% of tech savvy consumers advise it is very important vs 25% non tech savvy 5 3 out of 4 consumers have not tried VR, of those that have tried 77% are satisfied with their experience
  6. 6. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. US CONSUMER ELECTRONICS REPORT | December 2019 Quality Matters Most When It Comes To Electronics 6 • Quality of a product comes ahead of both Ease of Use and Price in the consumer’s mind. • Role of “influencers” (family/friends/sales) regarded as much less important. Devices that the Tech Savvy plan to purchase in 2020: 50% - Smartphone 33% - Smart TV 28% - Gaming Console 20% - Laptop 21% 34% 39% 47% 55% 56% 59% 74% 78% 78% 85% Salesperson Recommendation Environmental Friendliness Prev experience of fam/friend/colleague Brand Name Product Reviews Design Warranty Product Features Price Ease of Use Quality How important are the following, when purchasing an electronic device?
  7. 7. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. US CONSUMER ELECTRONICS REPORT | December 2019 Electronics Research Lifecycle Lengthens as Price Increases 7 • As the price of a product increases so does the time a consumer takes to research the product. Inexpensive products (less than $50) can take a few days whereas more expensive product ($500+) can take weeks. • Research for most consumers takes the form of reading online reviews (69%), and comparing competitive products (61%). 0% 10% 20% 30% 40% 50% 60% $20 - 50 $51 - 100 $101 - 250 $251 - 500 $500+ When purchasing an electronic device, how much time do you take to research? < 1 day 2 - 4 days 5 - 10 days 10+ days
  8. 8. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. 1.4% 1.7% 2.2% 2.3% 2.3% 2.9% 3.1% 3.4% 4.2% 4.6% 4.9% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% Consumer Electronics DIY & Tools Automotive Home Furnshing & Décor Major Chains Jewelry & Cosmetics Sports Other Apparel & Footwear Health & Pharmacy Gifts Conversion (Orders/Visits) US CONSUMER ELECTRONICS REPORT | December 2019 Consumer Electronics has Low Conversion Rate, As Do Other Higher Priced Categories Consumer Electronic conversion of visits into orders is half the average (1.4% vs. 3.0%) Exploration about complex, expensive choices require multiple visits driving conversion down. Looking for something with intent, Gifts, Health & Pharmacy, generates the highest conversion rates. 8 .5x 3.0% Data from Nov 1 to Dec 6, 2019 Overall Average
  9. 9. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. Jewelry & CosmeticsApparel & Footwear Consumer Electronics Home Furnishing & Decor US CONSUMER ELECTRONICS REPORT | December 2019 Smartphone Share of Success Varies By More than 2x Across Categories 9 Desktop still dominates in some categories: • Consumer Electronics has lowest share of revenue from smartphones: 18% Smartphones purchasing rules in more personal categories: • Much higher shares in Apparel & Footwear (45%) and Jewelry & Cosmetics (46%) We asked consumers what would happen if we took their phones away for a month: 35% of Millennials responded (I couldn't live without it), the highest among all age groups, followed by GenZ (29%) and GenX (28%) 18% 45% 22% 46% Data from Nov 1 to Dec 6, 2019 – other categories fall in between these examples. Desktop Smartphone
  10. 10. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. US CONSUMER ELECTRONICS REPORT | December 2019 Large Orders Dampen Smartphone Revenue; Consumer Electronics is Half the Expected Value • Consumer Electronics involves research not just hitting “buy now”, as a result little revenue comes from smartphones – much less than the more impulsive Apparel & Footwear segment • Consumer Electronics: 18% -- Overall Share is 36% -- Apparel & Footwear is 45% • For every $100 increase in AOV, the role of smartphones conversion deceases by 15% 10 10% 15% 20% 25% 30% 35% 40% 45% 50% $- $50 $100 $150 $200 $250 $300 $350 $400 $450 Smartphone Share of Revenue by AOV Consumer Electronics Apparel & Footwear -60% -40% -20% 0% 20% 40% Difference in Smartphone Share of Revenue from Average Data from Nov 1 to Dec 6, 2019
  11. 11. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. US CONSUMER ELECTRONICS REPORT | December 2019 Consumers in Urban Areas Tilt Their Spending Toward Vanity, Including Consumer Electronics 11 Urban Areas (essentially large cities) account for 68% of the population. They • spend 12% more on Apparel & Footwear than their population suggests. • and just a bit more on Consumer Electronics, Urban Development Index of 107 • spend less on more practical items such as Automotive and DIY & Tools 1.12 1.07 1.06 1.03 1.02 0.93 0.75 - 0.20 0.40 0.60 0.80 1.00 1.20 Apparel & Footwear Consumer Electronics Jewelry & Cosmetics Home & Décor Sports DIY & Tool Automotive Urban Dev Index Much less likely in Urban Counties Data: 9 months ending November 30th Urban Areas: defined as counties with 0-9% area defined as rural., all other counties grouped together. Share of Spend in Urban Counties / Share of Population in Urban Counties
  12. 12. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. US CONSUMER ELECTRONICS REPORT | December 2019 Military Base Personnel Focus On Retailers that Make Base Living Better 12 Compared to national averages, military bases produce a different shopping profile. • Over half the online revenue (55%) comes from Major Chains, Consumer Electronics, Home Furnishings & Décor, and Automotive • Much less (36% comes from retailers focused on personal adornment (Apparel & Footwear, Jewelry & Cosmetics) Data: November 1 thru December 6th Major Chains include mass merchandisers, warehouse clubs, department stores. 46% 55% 44% 36% 10% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% All Markets Military Bases Holiday Spending from Military Bases Trick out the base Personal Adornment Other
  13. 13. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. US CONSUMER ELECTRONICS REPORT | December 2019 Consumers Waited Till End of Cyber Monday to Snag Consumer Electronics Deals 13 On Cyber Monday early $3 in $10 (28%) comes between 8PM and Midnight with 9-10 PM the most active hour. For Black Friday the figure is $2 in $10 (19%) since more shopping occurred in the mid to late morning, peaking between 10 and 11 AM. 12:00 AM 1:00 AM 2:00 AM 3:00 AM 4:00 AM 5:00 AM 6:00 AM 7:00 AM 8:00 AM 9:00 AM 10:00 AM 11:00 AM 12:00 PM 1:00 PM 2:00 PM 3:00 PM 4:00 PM 5:00 PM 6:00 PM 7:00 PM 8:00 PM 9:00 PM 10:00 PM 11:00 PM Black Friday Cyber Monday
  14. 14. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. US CONSUMER ELECTRONICS REPORT | December 2019 Retailers Took Different Approach to Pricing Televisions this Year 14 Last year televisions held their price until Thanksgiving when the sales started. This year prices starting falling much earlier. Prices dropped 18% since October 1st by Black Friday In contrast, computers take a slow ride down the pricing curve. After a slight rise in mid-October, prices leveled off at the same level (down 18% by Black Friday) Black Friday Data: Adobe’s DPI where prices are anchored on October 1st
  15. 15. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. 15 50 inch range most common size and at $415 they’re less than half of US median rent for 2-bdrm apt ($1,180) 80s US CONSUMER ELECTRONICS REPORT | December 2019 Television Sales Focused on Upgrading Size 30s 40s 50s 60s 70s 47% $162 $336 $415 $775 $1,186 $2,275 2019 Percent of Unit Sales 1% 15% 26% 9% 2% Typical price in 2019 Holiday season thru Dec 12th. 30” TVs understated due to minimum price required of $150. TV features that matter most: 82% - Picture Quality 70% - Screen Size 50% - Audio Quality Consumers are willing to spend around $854 for their next TV experiences. But do they have the wall space?
  16. 16. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. 16 US CONSUMER ELECTRONICS REPORT | December 2019 From Movies to News, Content is Consumed on Smart TV’s Smart TV - 34% Smart TV - 42% Smartphone - 36% Smart TV - 32% Smart TV - 34% What type of screen is used the most to watch.. Movies TV Shows Online Videos (Facebook, YouTube) News Live Sports
  17. 17. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. US CONSUMER ELECTRONICS REPORT | December 2019 As TV Prices Go Down, Size Goes Up: 50s No Longer A Big Step Up in Price 17 The price premium to jump from the 40 inch to the 50 inch has fallen from nearly double (83%) in 2017 to a mere 26% in 2019. The change in price positioning makes the 50 inch class of TVs clearly the largest share of unit sales during the holiday season. • Last year 50s edged 40s: 35% to 30% Holiday season by year. 30” TVs understated due to minimum price required of $150. 2017 2018 2019 40 inch Class $350 $304 $330 50 inch Class $639 $468 $415 Premium 83% 54% 26% 29% 35% 47% $639 $468 $415 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 2017 2018 2019 $- $100 $200 $300 $400 $500 $600 $700 50in Class TV's Over Time Share of Units Average Price
  18. 18. © 2018 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.

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