NPD: Pandemic Drove Best Growth in Consumer Technology Spending in the Past 7 Years
The COVID-19 pandemic led to 17% growth in U.S. consumer technology spending in 2020, according to consumer tech spending research from NPD Group.
First quarter 2021 growth is expected to continue the rally with a 12% increase compared to the year-ago quarter. But that will be followed by a slowdown. The firm’s Future of Tech report said that despite 2021’s strong start, the year’s total — almost $110 billion — will be a 2% decline compared to 2020 growth. (The firm’ said its computations of 2020 results are based only on results through December 26.) The road will remain rocky, with a 2% decline in 2022 and flat sales during the following year.
Consumer Tech Spending
Growth in 2020 was the greatest “in at least seven years,” Stephen Baker, the firm’s vice president, industry advisor, said in a press release “It is important to recognize that despite year-over-year declines in 2021, these results when compared to 2019, pre-pandemic, represent double-digit growth,” he said. “The pandemic has renewed recognition of the critical value of technology to consumers, so while sales comparisons may stagnate, demand on an overall basis for consumer electronics will be higher for the next two years than it would have been without the events of 2020.”
The report also noted that the top tier of consumer tech category is growing. By 2023, the top five product segments based on revenue — notebooks, tablets, headphones, TVs, and smartwatches – will make up more than 55% of all consumer tech spending.
They represented only 44% of the total in 2017. All five will return to growth in 2022 and 2023, according to NPD Group. Two other categories – smart home and PC gaming – already were enjoying long term growth. That will continue, with smart home growing 9% and PC gaming growing 3% this year.
Things to look for in the second half of 2021 are a renewal of mobility spending, charging solutions for phones, thin and light PCs and 5G buildout. Trends gaining greater prominence will include in-home connectivity, home-based work and education, and an increase in total screens and video capabilities.
Clearly, a year in which people’s work and entertainment patterns were radically changed will be reflected in consumer technology spending. In May – when the radical disruption of daily life was starting to sink in – Gartner said that the pandemic would lead to a worldwide IT decline of 8% compared to last year. NPD’s assessment suggests that the predicted general shift from office to home-based spending occurred.