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All change: What’s driving sales right now

How the dynamics of enticing consumers to buy are changing – By Kelly Whitwick, GfK The GfK Point of Sale data for Tech and Durables for… View Article

RETAIL SOLUTIONS UK NEWS

All change: What’s driving sales right now

How the dynamics of enticing consumers to buy are changing – By Kelly Whitwick, GfK

The GfK Point of Sale data for Tech and Durables for 12 months from August 2022 to July 2023 reveals sales down 6% in volume and 0.4% in value. So despite the challenges, consumers are spending more than before the pandemic – but they are getting less for their money.

So far, 2023 in this category has been trend-led. We’ve spotted six key market movements that help make sense of the often confusing sell-through data and demand levels you might see at a brand level. 

  1. Increased reliance on credit: There’s a clear polarization between those who afford to buy and those who cannot. In 2018, mid-to-high earners accounted for 45% of sales; in 2023 it’s 56%, revealing how drastically lower-income shoppers have slowed their spending rate. However, if consumers want a product, our data shows that they will find a way to buy it, with many more relying on credit.
     
  2. More trading up: It’s not only inflation pushing up prices. Despite the challenges, more consumers are trading up to premium versions of existing products for added value such as new features and functions and aspirational design.
  3. Make it sustainable: GfK’s latest Sustainability Index study revealed that despite economic pressures, 66% of UK shoppers are willing to pay more for major purchases like domestic appliances and 56% would pay more for everyday products – if they are sustainable. This gives retailers the opportunity to communicate not only the positive impact on the environment, but on wallets through energy saving for instance.
  4. The low-cost home refresh: Up 3% Year-on-Year (12 months August 2022-July 2023 versus the previous year), the Home market is buoyant across many areas. Bedding, picture frames, paint and furniture have enjoyed strong growth in 2023 as consumers look for a cheap home makeover. Storage, in particular, has posted incredible sales value growth of 10% Year-on-Year, a trend reflected on Instagram with nearly 900k hashtags for #storagesolutions.
  5. Buying for right now: Short-term trends are influencing the market more than expected. Let’s take the weather. June 2023 was the hottest June on record, so UK shoppers wanted to keep cool and improve their gardens. In that one month, GfK POS data reported sales of air conditioners up nearly 300%, garden power tools up 31% and garden benches and table sets up 23% compared to June last year.However, with the wettest July, the trends shifted to indoors with game consoles up 24% and tumble dryers up 37% compared to the same period last year.This trend has developed month-to-month and retailers will be only too familiar with the importance of anticipating the next category where demand will peak. For instance, in Autumn 2022, buyers invested in products to help them through an expected incredibly challenging winter, with air fryers, heaters and electric blankets experiencing unprecedented sales.
  6. From influenced to influencer: More consumers are striving to become social media influencers. Content creation is another example of niche pockets of growth in the market, with premium items inspiring consumers to buy. For example, a UHD 4K video resolution PC Monitor has an average price of £330 compared to a standard monitor priced on average at £190. We have recorded declining sales in categories such as cameras, but premium products, like 4K Compact System Cameras, great for shooting videos, continue to grow Year-on-Year, along with ring lights and other accessories.

This year has been turbulent and challenging for retailers and consumers alike. At GfK, we’re tracking trends we haven’t seen before, some emerge and remain, and others are fleeting. What we are sure of is it has never been more important to monitor those trends to both maximise and anticipate them. Stay tuned!

 

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