i3 | July 31, 2020

Research Shows Healthy Demand for Technology

While the health crisis has significantly weakened the U.S. economy, consumer demand for technology remains strong, new CTA research shows. Since the beginning of the COVID-19 pandemic we have maintained that demand for technology would stay intact, although the sales pattern would likely be different. This new pattern revealed itself early in the crisis with big sales gains for devices like PCs and TVs as households adjusted to a stay-at-home lifestyle and the new remote nature of just about everything. But looking ahead, has the health crisis blunted U.S. households’ plans for buying technology? Our analysis suggests not.

In fact, CTA’s 22nd Annual Consumer Technology Ownership and Market Potential study (May 2020) finds that despite the economic headwinds posed by COVID-19, two-thirds (67%) of U.S. households have the same or greater level of intent to buy technology products over the next 12 months. This result bears testimony to the importance of technology in consumers’ lives. It also suggests the technology sector will likely fare better than many, even with downward pressure on discretionary spending mostly due to record unemployment.

Further data analysis illustrates the new shape of consumer demand amid the crisis. For example, the study found purchase intentions among U.S. households over the next year grew 12% on average for 28 products. Meanwhile, purchase plans remained unchanged for 17 products and declined for 19 (an average drop of 9%). So where are we seeing demand peak? Two words: Smart home.

The Smart Home

Smart home technologies continued to gain traction in American homes in 2019, with gains in U.S. household penetration rates across all products in the category. Demand also continues to grow year-over-year for smart home devices, particularly among repeat buyers as they look to expand and enhance their connected home environments by adding more endpoint products such as doorbells and locks, and/or centralized control via a home hub or smart speaker. This observation corroborates previous CTA research noting first-time buyers of smart home products often quickly return to add more smart home tech to their abodes.

Future demand for televisions also remains robust with 24% of U.S. households intending to purchase a new set within 12 months. High consumer uptake of streaming video entertainment and video calls is clearly fostering interest in larger TV screens and advanced resolutions like 8K UHD.

Consumers Want New Tech

This is particularly true with mobile devices. Some 36% of U.S. households plan to buy a smartphone over the next 12 months, but among this group three-quarters (75%) plan to upgrade to a 5G handset. Clearly, as the rollout of 5G networks continues across America, consumers plan to be ready for 5G’s faster speeds when available in their area.

The health crisis is also giving demand for wearables a shot in the arm. Today 31% of U.S. households own at least one smartwatch, an increase of eight points from 2019’s level of 23%. Looking ahead, about one in five (21%) households plan to buy a smartwatch in the next year, with 40% being first-time buyers. And wearable activity trackers, currently owned by 30% of U.S. households, are seeing demand hold steady with 18% of households planning to buy in the next year.

As the U.S. economy reopens against the backdrop of the health crisis, CTA will continue to monitor technology and consumer trends.

For more information, visit CTA.tech/research.