Electronics Industry: Current Trends and the COVID-19 Effect
Online schools, home offices and staying at home longer than usual resulted in people becoming more online over the past year. Companies have sent their employees laptops; on the other hand, governments also provided students with electronic devices such as tablets to pursue online education. All of this resulted in a boom in the electronics industry.
Aftermath of COVID-19 in the Electronics eCommerce
Changing Consumer Habits
American adults spent 90 minutes per day online in 2018, 2.5 hours per day in 2019, and with the contributions of COVID-19, it increased to 8 hours per day. This outrageous increase also rapidly increased the demand for electronic devices.
With consumers getting used to buying goods and services online, the electronics eCommerce industry has also benefited. As a result, the electronics eCommerce industry is projected to grow over $79 million in eCommerce sales in the year 2022, which is a 7% increase from 2021.
The Winners of COVID-19
Higher demand for electronic devices resulted in the industry’s growth. The electronics industry was the biggest winner of COVID-19 according to 40% of global electronics brands. Computers and consumer electronics represent 22% of all eCommerce sales.
Best Buy, a US-based electronics retailer company, had its US sales tripling in the third quarter of 2020 due to COVID-19. Apple was one of the biggest winners of 2020, with its stock price nearly doubling. The years 2017-2019 were stable years for the company with low growth; however, in 2020, Apple had a 20% revenue growth, coming from its online store.
The electronics industry also had a lower cart abandonment rate than average (88.05%) with 85.49%. Even though consumer trust in the electronics industry has been quite a challenge, online stores that have earned it have increased their revenues due to the high demand for electronics.
The biggest winner of the electronics eCommerce businesses in the United States with their revenues are as follows:
- Amazon.com $61.3 million
- BestBuy.com $16.71 million
- Apple.com $14.2 million
- Walmart.com $10.3 million
- Target.com $4.3 million
Amazon’s success in eCommerce in other industries helped Amazon gain recognition and consumers’ trust in the electronics industry.
The boom in the electronics industry also favoured related industries such as the media and entertainment industries. Not being able to go to physical events led to consumers preferring online events and entertainment such as Netflix, Spotify and TikTok.
The Dominating Product of the Electronics Industry: Smartphones
Before COVID-19, smartphones were on the rise and already widely popular among consumers. However, the pandemic accelerated its growth substantially. Currently, smartphones are the most popular product in the electronics industry.
Many governments worked together with the smartphone industry to contact trace COVID-19. Governments created various apps to trace the COVID-19 positive people and their contacts, give information about the virus, and indicate vaccination or quarantine status. These apps were taken highly seriously and used to determine whether the person could get into government or private buildings, cafes, theatres, etc. or not.
COVID-19’s Negative Effects on the Electronics Industry
Whilst the electronics industry was mainly positively affected by the pandemic, there were also negative effects that hurt the industry.
The Rise of Counterfeit Trickling
As mentioned above, the key point for growth in the electronics eCommerce industry was establishing consumer trust. Counterfeit has risen and become a massive problem for the industry itself. It is necessary to have proper inspections for the verification of authentication and genuine electronic products.
However, this was not entirely possible due to the legal requirements to stay at home in many countries. Therefore, this resulted in counterfeit electronics obtaining a higher profit margin during the pandemic. Subsequently, counterfeit electronics also decreased the trust of other trustworthy electronics businesses and lowered their sales rates.
Labour Shortages in the Electronics Industry
A big issue created by high demands in this sector was disruptions to electronic companies’ supply chains from prolonged factory closures and labour shortages in China. Electronics giants are reliant on Chinese factories, and the closure of these factories resulted in supply issues for many companies, including Apple. Tim Cook, the CEO of Apple, stated that there was lost production; however, they were working on a backup plan.
Overall, the online electronics industry has had a profitable year with the COVID-19 impact, and even with supply shortage issues, they have remained the highest benefiting sector. And since online education and working from home has become an option even after the pandemic, the electronics industry will continue to grow.
How to Increase Customer Satisfaction in Electronics eCommerce Stores
Clean and Easy Design
Whilst shopping at an electronics website, consumers prefer their journey to be as easy as possible. Generally, consumers will know what to buy; therefore, the search button should be easily accessible. That means product pictures and names within a straightforward menu will ease the product search and decrease the buying time.
Comprehensive Product Information
Electronics products generally cost more than other eCommerce items. Therefore, buyers check the quality of the products more carefully and in more detail. So, electronics eCommerce stores need to put comprehensive product information on their web pages. This will create more trust towards the product and the website. Additionally, it is essential to put return and shipping information regarding the product.
The number of different types of products is limited in the electronics industry. However, many brands are selling mobile phones, televisions, and headphones. Therefore, product comparison pages are helpful for visitors to find the necessary and suitable product for them. Thus, product comparison pages will increase sales and decrease the time spent deciding what product to buy, creating a better user experience.
Customer Ratings and Reviews
As previously mentioned, customer trust is one of the most critical factors in users deciding to purchase electronic products. Another way to create customer trust is to have customer ratings and reviews on the page regarding every single product. This way, visitors can have a broad idea about the product and read other customers’ reviews. This method also helps visitors pick a product and create more customer satisfaction.
Using segmentation and personalisation tools on electronics eCommerce websites will help users gain a better experience while shopping. Personalised Search is one of the most valuable tools to help visitors find what they are looking for quickly. Additionally, Personalised Push Notifications are also important to inform the visitors about discounts, in-stock items, and coupon codes. Therefore, segmentation at this time is a beneficial and vital method for electronic websites.
The Foreseeable Future of the Electronics eCommerce Industry
As seen in the survey conducted by Statista, a high percentage of people’s electronics shopping habits have changed. Over the two months at the beginning of the pandemic, the increase of people buying electronics online has been growing. Currently, nearly two years after the start of the pandemic, buying electronics online has become more widespread.
With electronics websites using the aforementioned customer satisfaction methods, there is no doubt that online sales in this industry will rise even sharply.