Starting with the radio receiver in the early twentieth century, which constituted the very first electronics product, today the consumer electronics industry boasts a wide range of increasingly complex and innovative products, the latest of which include wearable devices like fitness trackers and smartwatches, as well as virtual reality (VR) and augmented reality (AR) devices. The most ubiquitous of these products is undoubtedly the smartphone: at more than eight billion mobile subscriptions, the world anecdotally had more smartphones than people in 2022.
The rise (and fall?) of electronics e-tailersSince the onset of the coronavirus pandemic, online retailers across sectors experienced an unprecedented rise in consumer demand. The consumer electronics industry was no exception to the massive shift to web shopping, as demonstrated by sales figures of the leading online stores in the segment. Online revenue of virtually every major electronics retailer witnessed unprecedented increases between 2019 and 2021. Such is the case of Apple Inc., whose e-commerce net sales more than doubled in that time frame, from 24 billion U.S. dollars in 2019 to a whopping 52 billion two years later.
However, this period of unfettered growth in electronics e-commerce soon came to a grinding halt as the specter of stagflation – the twin perils of inflation and economic stagnation – loomed over the horizon in 2022. Many electronics retailers already felt the impact of the global slowdown: German-based Ceconomy AG (MediaMarkt and Saturn) saw its online sales decrease from nearly seven billion euros in 2020/21 to just over five billion euros in 2021/22. Similarly, U.S.-based electronics retailer Best Buy experienced decreases in both its global revenues as well as its online-only sales figures.
A short-lived pandemic-induced e-commerce boom?The growth recorded in retail e-commerce sales seems to have reached its peak in 2020, and the pandemic-induced e-commerce frenzy is forecast to simmer down. As of February 2023, rising prices for household goods and supply chain disruptions were still the main issues plaguing the online shopping experience of consumers around the world. Declines in real income, triggered by rising prices for essentials like food and fuel, crowded out spending on less essential goods like consumer electronics. In fact, over two-thirds of consumers worldwide reported having made changes to their purchasing habits in the consumer electronics category in response to rising prices.
In addition, a wave of e-commerce layoffs heralded the painful arrival of stagflation, whose hallmark indicators are soaring prices and increasing unemployment. Despite consumer electronics having one of the lowest online shopping cart abandonment rates across industries - at 50 percent compared to around 88 percent for fashion - consumer electronics e-commerce is expected to slow down as the global recession particularly threatens discretionary sectors such as fashion, electronics, cosmetics, and other non-essential categories.