For more than a year, a majority of consumers have been working from home and have been putting energy into sprucing up their home offices and other parts of their living environment. This has been great news for retail giants such as Amazon, Walmart, Target, Best Buy, and others. Amazon has seen its profits skyrocket 220% in the first three months of 2021, while Best Buy recently reported a 36% increase in its fiscal 2021. As CNBC put it, many Americans are enjoying a “stimulus-fueled shopping spree.”
The US government stimulus checks certainly played a role in the sales spike, but many consumers also needed to purchase new laptops, desktops, or tablets to set up their home offices or to equip their children who were learning remotely. In fact, according to Interpret’s New Media Measure®, from early 2020 to late 2020, purchase intent in several consumer electronics categories increased, as many products were either purchased for the first time or acquired to replace an older model.
For example, in Q1 2020, 7% of consumers had plans to purchase a new laptop or desktop computer, but by the end of the year that intent grew to 9% for laptops and 8% for desktops. It was a similar story for tablets, which grew from 8% to 10% in terms of purchase intent. It’s likely that this category was driven by kids’ schooling and entertainment needs. Wireless earbuds/headphones also grew from 11% to over 13%, as more people have been spending time together in the same house while working or learning.
Entertainment has played a huge role in the surge as well, as gaming continues to grow, consumers are buying next-gen consoles, and smart TVs and streaming devices remain hot commodities. Citing both streaming video and gaming, the Consumer Technology Association expects US electronic retail sales to grow 4.3% this year to $461 billion.
Big box retailing is coming back as more people are vaccinated, but online shopping habits have taken hold and behemoths like Amazon are capitalizing with their annual Prime Day, which just offered the largest number of deals since its inception seven years ago. The Amazon effect has been so significant that it’s become a Black Friday unto itself with many other retailers promoting products and creating their own sales events around it.