Ecommerce Powers Consumer Electronics Sales

Amid 2020’s grim retail environment, ecommerce stands out as a bright spot. By now, the story is well known: US buyers have turned to online retailers like Amazon and Walmart in record numbers, mostly to avoid shopping in crowded places or because their local stores were closed.

We forecast that retail ecommerce sales in the US will reach $709.78 billion this year, up 18.0% from 2019.

Before the pandemic, it was already popular to buy computer and consumer electronics online. That product category will represent the largest share of US retail ecommerce sales in 2020, at 22.0%.

We expect US computer and consumer electronics ecommerce sales will total $156.50 billion this year—and nearly half of the products sold in this category overall (49.5%) will be purchased online. Not surprisingly, digital ad dollars are rushing to follow consumer behavior.

By and large, the computing products and consumer electronics industry accounts for the bulk of digital ad spending by tech companies. Business-to-consumer (B2C) companies like Apple, Dell, Samsung, and Sony fall into this category, as do B2B service providers like Adobe, Cisco, IBM, Microsoft, Oracle, and other IT firms. We also include internet, cloud, and software solutions providers like Intuit, Salesforce, Shopify, and Zoom. Game console makers, shared economy apps, and mobile payment platforms belong in this category as well.

The pandemic has, for the most part, increased demand for these firms’ products and services, as it has for telecom services. Travel, auto, entertainment, and, to a lesser extent, retail have suffered steep downturns. But many computing products and consumer electronics companies have found themselves in the awkward position of booming while much of society goes bust.

This boom is good news for digital publishers, at least. We forecast computing products and consumer electronics companies will spend $11.64 billion on digital ads in 2020, up 18.0% from 2019. This represents the fastest growth in digital ad spend across all industries in 2020. By contrast, total US digital ad spend will grow just 1.7% this year.

“I think there’s more optimism here than in some of the other industries,” said Mike Menkes, senior vice president at analytics firm Analytic Partners. “During the pandemic, demand for consumer electronics and computing products, for the most part, has not really declined and, in some cases, actually increased quite a bit. It’s also an area where many purchases were already being made online, so there’s less interaction in-store. Advertising budgets have been pulled back a little bit, but not as much as in other industries.”

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