Global Consumer electronics’ value is expected to reach $1,787 billion in 2024. E-Commerce sales in this segment currently account for 33% of the total sales. The current trends suggest that almost half (47%) of total sales revenue in this segment will come from online channels by 2023.

Consumers are shifting from offline to online shopping, especially in the consumer electronics segment. That’s why leading electronics brands and e-tailers are looking to stay on top of the new trends. The following list shows the strongest trends that are boosting e-commerce sales, including technological developments, consumer behavior shifts, and logistics innovations.

Technological developments

Artificial Intelligence

There are different paths for the implementation of AI technology. Some of the most common practices at the e-tailer level are sentiment analysis, image recognition for picture-based search, and personalized product recommendations to increase conversion rates. Alibaba Group is leading the market with its advanced AI technology. The product search results on the app and their website are highly personalized as they are based on the search terms and browsing patterns of the user. Real-time personalization is a critical factor that makes this Chinese e-commerce giant stand out. Their infinite scroll search results constantly change, depending on the user’s clicks.

Recently, Amazon has launched the #amazonbingeshopping campaign, along with the release of the popular series Jack Ryan 2 on Amazon Prime Video. AI powers an innovative image search engine that allows the audience to find and shop an exact item from the series just by taking a screenshot!

In-app Augmented Reality

Large e-tailers—such as Taobao (Alibaba), Amazon, or the e-commerce platform Shopify—are integrating in-app AR to help shoppers more accurately visualize their products, gradually closing the gap between offline and online shopping experiences. Via the mobile app, shoppers can digitally try out how products will look in their home.  For example, users can get an approximation of how well a pressure cooker would fit in their kitchen or visualize how a new lamp would create a different ambiance in their living room. AR helps e-tailers meet consumers’ demand for a real shopping experience with strong visuals, both of which contribute significantly with the decision-making process.

 

Shopify AR: testing the AR Quick Look

Voice assistants

In the beauty industry, brands leverage voice assistants to encourage repeat purchases and provide beauty tutorials. This technology is gaining traction in consumer electronics. There are now more devices with built-in voice assistants, such as cars, earbuds, WiFi routers, watches, and speakers. The spending on wearable tech is expected to increase by 27% in the next year, growing from $41 billion in 2019 to around $52 billion in 2020. Millennials are showing interest in this technology: 44% of them have used voice activation for shopping (Wunderman Commerce, 2018). In the US, UK, France, and Germany, consumer use of voice assistants to purchase products has increased from 35% in 2017 to 54% in 2019. Ownership and market share of smart speakers in the US in recent years also reflects this growth. The percentage of American adults who own smart speakers rose by 40.3% in 2018, with the number of monthly active US smart speaker voice commerce users increasing from 13.6% (2017) to 15% (2018).

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All in all, the share of voice-activated sales will continue to grow, and brands and manufacturers all need to catch that train as soon as possible.

Smart home devices used by US smart speaker owners
Voicebot.ai: Smart home devices used by US smart speaker owners

Consumer trends

Social Commerce – Instagram and Facebook

Shopping on social media is getting more popular than ever. It’s rare to find a beauty brand that doesn’t do social commerce, but not all of the consumer electronics brands are using this method to increase their sales. Social media platforms are encouraging this trend by optimizing in-app e-commerce features. Instagram has seen success from launching its in-app checkout; a feature Facebook is keen to replicate on other platforms in their network. Facebook Pay is their latest feature, which will allow users to make and receive payments across the following apps: Facebook, Messenger, Instagram, and Whatsapp.

 

Gaming brands are more likely to consider social media in their sales channels. HyperX, Razer, and Corsair have already embraced social commerce. They feature visually appealing pack shots on their Instagram, which link to mobile-optimized product pages.

Razer instashop features link to e-commerce product page
Razer instashop features link to e-commerce product pages

Shopping Ads on Youtube

Google is diversifying its advertising products. The most recent innovations are on their ever-growing video platform, YouTube. For example, YouTube Merchants can publish their ads on the YouTube homepage and sidelinks are now available on Trueview ads. Also, it is now possible for users to scroll through suggested product lists based on their search query. Influential brands are paying close attention to this trend. Skullcandy’s YouTube channel, which has 100k+ subscribers, is packed with high-quality content, such as user guides, product reviews, music tracks, and original videos. They also use the Channel Card and Shopping Card on YouTube to show the featured products in the video and link to the product page.

 

Skullcandy use Youtube Shopping card which links to e-commerce product pages.

Personalization

Millennials and Generation Z have spoken up. The need for authenticity and recognition is growing, especially among these two demographics. Research shows that 80% of customers are more likely to purchase a product or service from a brand that provides personalized experiences. Shoppers take personalization very seriously, as 63% say they would stay away from brands that offer poor customization.

All brands are aware of this and are taking different approaches, from brick-and-mortar stores to online retailers. Samsung is experimenting with a mobile-first, omnichannel shopping experience in its showrooms that uses sensors and beacons. Meanwhile, SkullCandy now personalizes the product experience with the Crusher ANC’s Personal Sound Profiling, which optimizes the audio experience to suit the individual’s ears.

Skullcandy Crusher ANC™ Personalized, Noise Canceling Wireless Headphones
Skullcandy Crusher ANC™ Personalized, Noise Canceling Wireless Headphones

Logistics

Same-day delivery

Free delivery is one of the main factors that affect the purchase decision in online shopping. Research shows that 54% of buyers expect it in their online shopping experience (Wunderman Commerce, 2018). This report also found that 22% of surveyed consumers expect same-day delivery (within 12 hours). This figure is even higher for Amazon Prime subscribers, as 59% now expect 24-hour delivery. Amazon is setting the new standard.  With an Amazon Prime subscription, consumers quickly become accustomed to speedy delivery. This has set a new standard for the entire online shopping industry, as buyers are willing to pay extra for shipping convenience, even knowing that they can find a better deal elsewhere. With the option to pay more for priority delivery, many shoppers now expect the comparatively “slow” standard delivery times to be completely free.

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Amazon Prime one day shipping commercial

F2C (Factory to Customer)

Chinese manufacturers used to be content with working on large orders for Western importers and distributors. Shipping parcels internationally used to be difficult, and factories did not have the skills in marketing and e-commerce to target Western customers. This has changed. We now see many Chinese sellers distributing their products directly on Amazon, Ebay or their own platforms. For example, AliExpress, a global online marketplace owned by Alibaba, shifted up a gear in 2019 on the occasion of Single’s Day. Many Chinese factories are now building their own brands and cutting out intermediaries to tap directly into the wallets of Western shoppers.

Some consumer electronics verticals are already affected. Western audio brands now have to compete with “Chi-Fi” brands (Chinese Hi-Fi), like Tin HiFi and KZ. By cutting out the intermediaries and various other costs (like marketing and R&D), these brands are capable of offering critically acclaimed products at unbeatable prices. In order to fight back, traditional brands will have to leverage all of their assets: proximity to the customers, the trust built up over the years, and mastery of the local language!

Custom packaging

Packaging personalization is not a new concept. Brands spend a lot of time and effort on designing packaging that speaks for their brand. Gen Y and Z consumers are asking for more. More than one-third of customers admit that packaging dramatically influences their perception of a brand. Suitable packaging should reflect a brand’s core values, be sustainable, be “Instagramable”, and even more, it should include a personal touch.

OnePlus packaging is a good example. The packaging of the OnePlus 6T paid attention to detail, meaning their core value and color codes remained unchanged. The front wrapper with the definition of OnePlus Community aligns with its marketing strategy on social media, which embraces the brand’s loyalty. There is a message from the CEO Pete Lau, inviting the buyer to join their community. Even their slogan emphasizes personalization: “Created by you, with you, for you.” In a competitive market like smartphones, this packaging adds value to consumer perception and strengthens their brand positioning.

 

 

Unboxing OnePlus 6T and review the packaging (credit to Alessandro Michelazzi)

The market is shifting toward consumer behavior. Millennials and Gen Z prefer experience over products and are more likely to purchase electronic devices online than offline. They are often branded as being more narcissistic, more idealistic, more socially conscious, and more experience-oriented than their elders. That’s a challenge for brands and manufacturers who need to be up to date with the latest trends and stay competitive.

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